Everyone has a view about how the economy is doing, and when you are aware that 67% of the American economy is based on shopping, there are many with terrific insights. At a different level, the economic development or booster agencies will look at number of construction cranes in a city or housing development. Invariably people need a place to live and the property development sector offers mortgages and rents or both demand and outlook concerns. The property industry often goes through boom and busts cycles because it is a lagging indicator, when housing prices go up, people want in and developers are usually happy to supply, until there is oversupply and then a bust or slowdown happens. When this happens the banks which financed the mortgages slow down and seemingly the economy slows. In China the bust is happening.

In an article by Clare Jim of Reuters, the government of China will guarantee new onshore bond issues by a few select private developers to support the property sector. China has used the property industry to build apartments across China but some cities are ghost cities because few people live there. The jobs are elsewhere.

In China, some developers had defaults on their bonds as home sales slumped. State planners are trying to implement policies that will boosting economic demand in a strong, reasonable and moderate demand. This would allow property developers to keep developing but not bust.

Linking to dividend paying stocks, after you own your home, you hope that the value increases if you need to sell, but if you do not need to sell the property market fluctuations mean less to you as long as prices are moderate or slowly growing. In similar fashion, when you buy a stock you hope it goes higher, but if you are receiving dividends you can wait until you need to sell. There are many similarities to why you buy and hold to other sectors and somewhere along the way if you are wealthier in the end, you have made good decisions.

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

If you have ever read the history or some of the history of Disney, you will know over the years particularly after Walt Disney passed away, the stock in the company dropped and there was a fight to control the company. The new Board installed Michael Eisner and he helped turn around the company, ensure the company assets were productive and grew the company. It was a good story for the franchise and shareholders. The company over the years has gone through many changes and some things it does very well, however similar to all companies changes could be made.

For most of us, when we buy shares, we hope the company does well and over time if the shares do well we will continue to hold the shares. For some shareholders, their timeframes are shorter and when you add the control of greater assets, they tend to have more public influence. One would imagine, if you were investing close to $1 billion in the shares you would also have talked to senior management. If you were investing a few thousand, it may be possible to talk to senior management but likely it would be on conference call with other shareholders.

In an article by Svea Berbst-Bayliss and Dawn Chmielewski of Reuters, a hedge fund called Third Point which is run by Daniel Loeb has bought close to $1 billion in shares. Mr. Loeb and his hedge fund would like Disney to make some changes such as spinning off media assets (sell parts to the public), buyback shares, pay down debt and other ventures in order to increase the value of the shares. For the billion dollars in buying shares, Third Point owns 0.4% of the shares.

In early September, seeing the interest in ESPN, Mr. Loeb says Disney should keep the asset. Mr. Loeb on closer examination found that ESPN is a major asset for Disney.

Linking to dividend paying stocks, in every company shareholders come in for a reason and generally making money over the long term will keep most people contented, however there will always be some who believe more can be done. Sometimes the markets like more debt, sometimes less debt, sometimes the market likes companies to be streamlined, sometimes the markets like the companies to have significant fingers in many pies. In depends on the strategic plan and if the company is making money. If the company is making money and is profitable, many shareholders will be content to let management execute on their strategic plan. When they do not, everyone is a critic and as a shareholder must be listened to (think about sports fans – when the team is losing everyone has an opinion).

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

Yesterday post was about Saudi Aramco making billions of dollars as both demand and oil prices increased, as investors it is not hard to like that combination. With every industry and within every industry there are different sides of the prospective. It is good or bad, it depends.

A view of the other side is Rachel Maddow author of the book Blowout published by Crown, New York, 2019.

The oil and gas industry because it is based on a commodity that has high front end costs, but if oil is struck can and will pay out for years brings along many different characters. Some are outstanding citizens, some ensure the oil is drilled and connected to a pipeline which is connected to some device to allow everyday citizens to use the product whether it be gasoline or natural gas. In the oil and gas world, it is relative easy to see those who receive more than their share and do not share with others, there is a whole gambit of people.

John D Rockefller built his company on turning out the finest product on the market, at the lowest price to the consumer. Along the way he also monopolized the pipelines and refining, but the consumer had a inexpensive product to power gasoline engine vehicles. One of the companies that was in the Standard Oil orbit has become ExxonMobil, the largest oil and gas producer in the US. In the book, the author writes Rex Tillerson graduated from University of Texas in 1975 with a degree in civil engineering. Over the years at Exxon, he is a fully realized creature of the corporation’s business, intellectual and ethical culture. Tillerson believed deeply in Exxon’s overriding mission, which was to maximize shareholder profits. He also believed deeply in Exxon’s secondary mission which was to bring the world’s most vital commodity to market at a low cost. He maintained a vigilant watch for any forces that could threaten either endeavor.

For Rachel Maddow writes all US producers including ExxonMobil continue to enjoy subsidies and tax incentives that had been in the tax codes for almost a century. This helps keeps its annual tax bills low, now matter how high the profits. Ms. Maddow also writes about fracking both pro and con, including what happens when the oil industry does not like the results of reports.

Linking to dividend paying stocks, there are other companies profiled in Ms. Maddow’s book and on the surface of energy dependence there were and are reasons for the bias towards the energy companies. Some of the biases one wonders are they too much, but if you were an investor you like the status quo. In most industries, if you examine the reality, there are good people and bad people operating. One hopes the end result is more positive than negative, as an investor you have bias towards making profits to paying dividends.

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

The most profitable company in the world is an oil company, but it is not headquartered in the US, its office are in Saudi Arabia – the company is called Saudi Aramco.

In an article by Aya Batrawy of the Associated Press, the company went public with 5% of its shares traded on the Saudi stock market. Profits jumped 90% in the 2nd quarter when compared to the same time last year. Similar to all oil companies, the company had a down year in 2020, but higher commodity prices allows for profits to flow. The company reported half year earnings of $87.9 billion.

The company will pay a dividend of $18.8 billion for the 2nd quarter shareholders as its has promised to do since its debut on the stock market. The Saudi government is the main shareholder of Saudi Aramco.

Aramco President and CEO Amin Nasser expects oil demand to continue to grow for the rest of the decade. OPEC expects world oil demand to rise to 3 million barrels a day to average a 100 million barrels a day.

Linking to dividend paying stocks, in the case of Saudi Arabia, it continues to own vast oil reserves which are among the least expensive to produce in the world. Every time the oil price goes up or is stable, the company will make money. It is almost impossible not to make money. As an investor you like those numbers and owning shares can be a very long term hold.

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

One of the biggest contributor to the export sales figure in the US manufacturing number is the production and sale of airplanes. The industry is dominated by 2 companies – Boeing and Airbus. If you went into the airport and saw planes take off and land, they were highly likely one of the 2 companies. Boeing has many planes but the new ones or the latest in the showroom are Max and Dreamliner. The Max 737 is for domestic flights, for international flights the Dreamliner because it holds more people. For decades the production plants in Washington State and South Carolina hummed with activity until Max 737 crashes in 2018. When COVID shut down very few people flew and now lots of people are flying. Boeing is behind and unlike car model recalls, it takes a long time to fix the issues and equally important have the safety regulators approve the fix.

In an article from Reuters, Boeing delivered its first Dreamliner since May 2021 to American Airlines. This is the first for American Airlines CEO Robert Isom expects to receive 9 more this year.

Boeing says it has 120 787’s waiting delivery, while American Airlines has 42 planes on order.

In July, the FAA (Federal Aviation Administration) approved Boeing’s inspection and retrofit plan to meet certification standards.

Linking to dividend paying stocks, all companies say they are safety orientated, but most will default on the side of getting the order out of the door, this is why very few companies pass 100% on their health and safety procedures. Some companies have them as plausible deniability built in, in case they are inspected someone can point to the official procedures. Then real life happens and the company has to do something. Generally profit making companies have better safety records than non profit making companies because they have the flexibility of time. If you are aware that the items sell as long as people believe they are safe, then safety is equally important. If the item is get on the shelf or it will come back and be going to landfill, then the attitude is something else. In your investments try to have more of your companies both trying and doing safety first.

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

For generations, the Rhine River in Germany has bringing in goods to the German cities along the route (the closest American example is the Mississippi River). Cities grew up along the river and river transportation has a competitive advantage over trucking and railways. The economic lifecycle depends on the Rhine River. If you have seen European weather coverage this year there are droughts and wildfires.

In an article by Daniel Niemann and Frank Jordans of Associated Press, the water levels are reaching critically low points which means the larger cargo ships can not make the journey, smaller cargo ships are needed. In the world of economics, smaller ships costs more for shipping, for example normally a 2,200 metric tonnes of cargo could be transported, the lower levels means transporting 600 tonnes.

In Germany, unlike other European countries, transporting goods by inland waterways in more important, which means headaches for German factories and power plants.

Linking to dividend paying stocks, all of us are dependent on nature to be reasonable stable and when it is we typically do many things taking nature for granted. Adjustments can be made, but they often take time and money.

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

Apple smartphones are designed in the US, the advertising campaign is headquartered in the US but the phones are manufactured in Taiwan. One method to understand how well sales in the cellphone market are is to hear from the company which manufacturers the cellphone.

In an article by Yimou Lee and Sarah Wu of Reuters, Foxcomm gave a cautious outlook for the current quarter after posting results that exceeded expectations.

At present due to the loyal and relatively affluent customer base, Foxcomm believes rising prices will only have a limited impact on the mid-to high-end smartphone demand in the rest of the year.

Chairman Liu Young-way said on the whole, we are slightly more cautious but we could see growth. Both Foxcomm’s net profit and revenue for April-June quarter rose 12%. Mr. Lui said our customers, and ourselves, we are all large global technology companies and have relatively strong supply chain management abilities. This advantage allows us to minimize the impact of any materials shortage.

Linking to dividend paying stocks, the strengths of Foxcomm selling iphones is the loyal and relatively affluent customer base along with being a global player. If you can find companies which have the same strengths, there are worth looking into.

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

Prior to Russia invading Ukraine, the analysts who examine the countries finances likely did not have a hard job, Ukraine is a large producer of grains among other aspects in the economy and the grains had a ready market across Europe and Africa. The the war happened and is still going on, the finances coming into the country’s coffers has gone down drastically and expenses to fight the war have gone up.

In an article by Jorgelina Do Rosario and Karen Stochecker of Reuters, Ukraine’s Finance Minister has asked bondholders to defer payments on the international bonds for 24 months.

The war is costing Ukraine $5 billion a month and on September 1 a US $1 billion bond is due.

Ukraine’s Finance Minister Sergii Marchenko said the country had explicit indications of support from some of the world’s biggest investment funds including BlackRock, Fidelity, Amia Capital and Gemsstock.

Luiz Peixoto, emerging markets economist at BNP Paribas said we do not know what kind of shape the Ukrainian economy will be but investors are preparing for a debt restructuring.

Some of the dollar denominated bonds trade at deeply distressed prices, some as low as 17 cents on the dollar.

Linking to dividend paying stocks, there are many companies where the expectation is they will continue to do well no matter what happens in the economy. The companies tend to have reasonably well diversified products and services which people need and that is what investors expect. Sometimes a curve ball happens, and you need to decide to do nothing or seek alternatives, which is why it is important to do your homework to determine what alternatives are attractive to you.

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

In August, the Senate and House passed a bill to fight climate change and one of the many features will be ideas to generate more green energy. There will be plenty of ideas proposed and some of them will be financed, but the ones that are financed hopefully will enhance existing systems in the environment. An example is in Switzerland.

In an article by Denis Balibouse of Reuters, if you think about Switzerland one of the images you could have is the Swiss Alps or Mountains. In the canton (county) of Valais, a new underground hydro plant came on line with costs in the area of $2.9 billion.

The 6 turbines are in a cavern 600 meters below ground between 2 existing reservoirs – Emosson and Vieux and has a capacity of 900 megawatts. During peak demand, Nant de Drance produces electricity from hydropower. But when output from sources exceed demand, the plant stores surplus electricity by pumping water into the higher Vieux Emosson reservoir. Alain Sauthier, a director at the facility said the yield is very good or 80% efficiency. It takes about 5 minutes to switch from full pumping mode to full power generation.

Linking to dividend paying stocks, typically hydro utilities are a wonderful dividend stocks because after the initial capital investment to build the facility, only some maintenance is required and the rest of the time electricity is generated to be sold into the grid. Hydro dams have a long life cycle, think about the Hoover Dam in Nevada. The issue on the new Climate government money is there will be more proposals than are financially feasible and doable, saying no is a good thing to hear.

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