One of the accounting terms is goodwill which is an intangible asset over and above the cost of the assets. When a company buys another, to ensure balanced books, goodwill is used. Since there is nothing to grasp onto, it can change. Goodwill is used because all companies operate on the faith of their customers and suppliers. It is an expectation the value people see will continue and grow. The interesting part of goodwill is if a company acts negatively or begins to loose money, the goodwill quickly diminishes.

Every organization starts off with goodwill, because it general we all want to see people and organizations succeed. It is a good thing. In terms of the Presidency, every new President starts off with goodwill or a honeymoon period, the person was voted in and in general people are willing to wait to see how they perform for the good of the country. You will likely not agree with everything, but at the start of the period, the person has more goodwill than later on. President Trump was excused for being a little off beat in relationship to the normal systems which operate, he said he want to change and he has.  One of the measures the President has received the most press from is his “ban” on some countries in terms of people coming to the US. The President does have the ability to determine immigration and who comes in, however the affect of the “ban” has lost the US goodwill. It lost goodwill because similar to most systems there are lots of parts and it took Homeland Security 5 days to figure who was included and who was not included. It took some time to ask, for the countries involved, what is the existing process and how would it change? To have a “ban” in order to put extreme vetting in place, when extreme vetting is already in place, makes one wonder about the purpose was. There were other questions including: does having a “ban” make it harder or easier to fit the enemy when to fight the enemy you need the goodwill and resources of some of the countries included in the “ban”? If the government was a company, one would say the customers and suppliers have been alienated and they will look for alternatives. You would also look for people to be moving positions.

Linking to dividend paying stocks, these companies tend to be large and somewhat bureaucratic for the good reasons. They are large because they are successful; they are bureaucratic to not to upset your customers and suppliers. For every government policy, some companies like it, some do not, successful ones have to adapt, which is good thing. As you look at your holdings, does the company have the flexibility to adapt? and still generate healthy margins to ensure profits?

There are more questions than answers, till the next time – to raising questions.