In every corporation people work for the company and although the corporation generally stays away from hot political issues, by there nature of employing thousands of people, some issues will come forth. Generally, corporations will say we pay your reasonably well to make your own decisions, however sometimes what the corporation will pay or not pay for in expenses means it is wading in political issues.

In some companies, sometimes these issues are lead by unions try to negotiate the benefits, other times it is companies trying to ensure it can attract people to the organization.

In an article from the Associated Press, Tesla is covering travel costs for US employees seeking out of state abortions. The company said in its 2021 Impact Report it expanded its Safety Net program and health insurance offerings.

Texas State Representative Briscoe Cain has said he will propose legislation baring local government in the state from doing business with any company that provides travel benefits for employees seeking abortions. US Senator Marco Rubio introduced a bill that would prohibit companies from claiming tax deductions for such costs.

The elephant in the room or the issue for Texas is Tesla recently moved its head quarters from California to Texas and was expanding to expand production in Texas. The majority shareholder of Tesla is Elon Musk who owns Space X which has its home base in Texas. Will those bills die on the books or become law? If you read the books on Space Barons which includes Space X or Power Play which is about Tesla, you will know the government has given billions to the companies. What will Tesla or Texas do?

Linking to dividend paying stocks, as an investor when you buy the shares you are concerned about the financial concerns of the company and expect it to be a good corporate citizen as it continues to make profits and pay dividends. To do that means the company has to attract and retain employees but as an investor what policy it has or does not have is generally not materially connected to make profits. As individuals you can make decisions about what the company should or should do but as long as they are not breaking the law, it is generally not something to be concerned unless it is affecting senior management’s time and resources.

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

In the world of unions, there are ups and downs similar to every other industry. Recently unions were excited because an Amazon facility voted to join a union. However not all warehouses are the same and people are individuals with different values and belief systems.

In an article by Doyinsola Oladipo and Jeffery Dastin of Reuters, an Amazon warehouse across the street from the Amazon warehouse which voted to join the union, voted against joining the same union. There are always reasons for and against to joining an union and many of the issues depend on whether the people think they will be at the location for an extend period of time.

Companies like to hire part time and if you are part time, likely working one or more jobs, you do not expect to stay at a location and while higher wages are desired the expectation just because you are in an union they will not come. There are multiple reasons to vote for and against a union.

However, the voting against the union means that other warehouses will see and hear about the result or the next warehouse is not a given they will vote for the union.

Linking to dividend paying stocks, when you own shares your concern is not how much the company pays its employees although you liked to believe they are paid a reasonable wage given the labor conditions in the town and city the locations are in. The reason you buy shares to hold on to for a long time is the company makes a profit and can pay a dividend. The other things are hopeful and part of the reason why consumers buy their products and services.

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

Every generation has investment managers gurus and some manage to be multigenerational. If you consider multigenerational, you consider changes which happen in the economy. An interesting exercise is to look at the Forbes 400 list from 1980, 2000 and 2020, over the the 40 years the names have changed. If you wish you can go back further and consider if you were a buy and hold investor some companies were great performers then something changed and did they adapt or used the same formula but people changed? The point is something changed and did the investment manager change?

Warren Buffett is in his 90’s and he has more winners than losers through a variety of economic cycles which makes Berkshire Hathaway Inc annual meetings something to pay attention to. What is Warren’s philosophy towards investing and how does he choose to spend billions of dollars to invest? In an article by Jonathan Stempel and Carolina Mandl of Reuters, the annual meeting of Berkshire was held and the question and answer session was 5 hours. (if you want you can watch some of the clips on You Tube).

Berkshire’s operating profit was $7.1 billion and within the orbit of companies Berkshire controls supply chains were managed. Berkshire held plenty of cash and some of it was used to by more shares in Chevron and he although he does not often buy shares after a company has announced it is buying another, Berkshire has bought shares in Activision Blizzard ( a gaming company) which Microsoft has announced a bid to buy its shares.

A shareholder asked why he bought 14.6% of Occidental Petroleum and insurer Alleghany Corp? Mr. Buffett said he bought Oxy Pete because he read an analyst report and for Alleghany, the chief executive of Alleghany who once worked for Berkshire’s General Re business wrote to him.

Berkshire used $51 billion to buy equities and its cash stake went down $40 billion to $106 billion.

One thing Berkshire will not be doing is buying bitcoin and sometimes it is important to know what investment managers are not buying.

Linking to dividend paying stocks, Mr. Buffett loves dividend paying stocks particularly if they have moats or moat like conditions. Some of his biggest holdings are in Coca cola, BNSF railroad (they are not making any more railroads), General RE Insurance and Geico Insurance (they produce cash), Apple, Chevron and Occidental Petroleum and a host of other companies. Often times it is good to ask a guru what he or she does not like and then you can decide on what they like.

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

Countries around the world do not like each other and although the world is global or many businesses are global there are still local disagreements. Some of the disagreements you may personally like, for example sanctions on Russia for invading Ukraine. Some you may not like, but governments of the day in the country can choose to make up and change the rules. When this happens businesses that operated well within the rules ask for clarity on what the rules mean and do not mean to normal business activity.

In an article by Kate Abnett and Francesco Guarascio of Reuters, companies involved with Russia are asking for clarity. Russia has massive amounts of oil and gas and is closer to Europe than another other producer and Russia has strong historical ties to Europe. It made very good sense to move Russian oil and gas to Europe to replace coal. The companies that import the oil and gas are companies based in various countries of Europe and in Germany about half the gas comes from Russia. This was good until Russia invade Ukraine and the world imposed sanctions on Russia.

Since then, the Russia President said he wants the bills to be paid in Russian rubles as opposed to Euros or American dollars. What does a business do? The European Union loves making policies, but as yet has not done so. If the company pays in rubles, does that violate the contract with the other currency? in the oil and gas world, contracts are signed for decades, for example Austria’s OMV has a contract till 2040 for Russian gas. What happens?

Linking to dividend paying stocks, often times investors want to buy utilities because they have the ability to pass on increased costs to consumers every year while still allowing for profits to be made and rewarding shareholders as well as pay capital costs. Something similar to sanctions throws a non expected event or black swan event. It happens to all companies and hopefully the war will be over sooner than later and business can resume to what they do best.

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

The most popular or best selling truck in America is the Ford F-150. It is the bread and butter of Ford Motor Company and similar to companies in the auto world, they look at Tesla and wonder how could they duplicate them and have the stock price of the company. In terms of duplication Ford announced it would change a plan in the Detroit area to make 40,000 electric F-150. It was a wonderful surprise and delight to receive 200,000 customers make reservations for the truck.

In an article by Joseph White of Reuters, Ford announced it had produced its first electric truck and expects to produce over 150,000 this year. One of the selling points of the truck is the electric battery can power a home or construction site. One can imagine for people living in areas where hurricanes are a common weather concern, having a Ford truck means the recovery is a little easier to rebuild. Perhaps in the future, some homes will need less electricity from the utility company or you will be able to sell excess capacity to the utility company from the vehicle. Another selling point is under the hood is luggage space or trunk size capacity.

In an interview with Jim Farley, the CEO of Ford he expects sales to increase and the market share for EVs is presently 75% of EVs are sold by Tesla. Mr. Farley also said the Ford F-150 is second to Apple iphone in revenue generation.

Linking to dividend paying stocks, all companies have or are judged by relatively simple metrics, later in the year you can ask does Tesla still have a 75% share or did it fall. Is the Ford F-150 still generating the type of revenues it did in 2021? Then you can find out out metrics which allows you to be comfortable in this case is Ford delivering on its execution of manufacturing? All companies have metrics, do you know your investment’s metrics to know if you are comfortable or do you need to look at alternatives?

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

Many industries have a supply and demand issues, the companies wish to supply enough supply to keep prices high and demand high, but too much supply will drive down prices. Too little demand with decrease prices, too high demand will push prices higher or there is a balancing act every quarter.

In an article by Jane Lanhee Lee, Chavi Mehta and Noel Randwich of Reuters, in the world of graphic chips the supply and demand issue has been a factor in the global supply shortages. More and more items have electronic components and every year the electronics do a little more. To do a little more, there is a high demand for graphic processing units or GPUs.

According to news site 3DCenter which tracks graphic-chip prices in Europe, the price of AMD’s Radeon RX6000 and Navidia’s GeForce RTX30 which are used in gaming fell to less than 20% of the Manufacturers Suggested Retail Price from over 80% at the start of the year.

Softening demand from PC and smartphone markets is resulting in price drops of other chips such as leading edge processors, including CPUs and some memory chips according to Summit Insights Group analyst Kinnagi Chan.

Chip makers including Intel and TSMC are planning multibillion dollar expansions.

Linking to dividend paying stocks, many products have a supply and demand curve linked to them and if there is too much supply prices fall, too much demand prices go up. It is easy to see in commodity prices, but manufacturing and retail fit it as well. For your investments try to understand what the supply and demand is.

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

If you consider Netflix and Disney+, over the past couple of years the number of people who were subscribers jumped Kobland the stock increased. Streaming services need lots of people to pay the annual subscription and wonderful shows and movies for people to watch. The more people who subscribe makes every other organization in the business want to copy them.

In the entertainment business, you see copies all the time, if a particular type of movie makes a lot of money, the first. instance is not we need more quality movies similar to the first but we need more movies of the same theme and we need it now. Movie goes are used to A, B, C quality movies.

In an article by John Koblin, Michael M Grynbaum and Benjamin Mullin of the New York Times News Service , the people who run CNN watched Netflix and Disney+ and given the fact that AT&T owned the company called WarnerMedia, there was excessive cash to copy and have big plans. The head of CNN was Jeff Zucker and he wanted CNN to do something similar. The financials of people paying a subscription, because everyone in the industry wants subscription services where fees start relatively low and then can be raised every year or two. CNN+ was launched and CNN put in $300 million.

Time went on, AT&T decided to sell WarnerMedia to Discovery, the head of Discovery is David Zaslav. After buying WarnerMedia Mr. Zaslav was listening to the reports on all the media assets he had bought and learnt CNN+ had 10,000 viewers. What to do?

CNN+ had a large budget for advertising, it was projected to spend $1 billion over 4 years and Mr. Zucker left CNN and was replaced by Andrew Morse, CNN’s chief digital officer. Plans were made and CNN+ was allowed to continue and soon Mr. Morse had secured 150,000 paying subscribers through connection into the Discovery Warner assets.

Mr. Zaslav and his team were not convinced CNN+ would make money and put the plug.

Linking to dividend paying stocks, it is not unusual for new divisions to fail. Just because the company has great assets, it does not mean the new services will be a success. What is important is the great assets have wonderful margins and the company can make profits. Often times it is important to see what failures were made and how did the company deal with them. The answer of no to capital allocation is sometimes equally important to spending money. What is the line that more money is not the answer?

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

When you buy shares in a company expecting dividends and hopefully capital gains, you do not really expect the company to wade into politics of the day. However, all companies appeal to a wide range of people and from a strict marketing point of view, companies have a very good idea how many of their consumers are in every segmented range. The segments are both income and family status and companies will tailor their marketing strategies to fit the various demographics of people, particularly if they are in the consumer or retail side of business. It is the reason -if you want to take a Disney cruise do your want Mickey Mouse or Star Wars or Marvel action characters?

In Florida, the Governor Rod DeSantis who is a Republican is passing various bills that make some of the public feel at unease and as a big consumer company, Disney was under pressure to say something. Disney said all people are important, the Governor disagree and a bill was presented to take away the self governing area of Reddy Creek Improvement Area.

According to books about Walt Disney, when Walt Disney had the dream of a new Disney World but unlike the relatively small area around in Anaheim, California where outside of the Disneyland , the company does not control the real estate, Walt wanted greater control. He essentially bought over 25,000 acres of swamp land and made an agreement with the Florida representatives to control that piece of land as any town or city would control their land. The agreement was the Reddy Creek Improvement Area, the local counties would benefit, if Disney was successful, but they would pay no money for services such as road, water and sewers or infrastructure inside Disney lands. Disney was responsible for infrastructure and buildings. It was wonderful when the park opened there were miles of people trying to get in and Disney World has been successful ever since opening day.

The Reddy Creek Improvement Area has allowed Disney to grow over the years and all the development inside was financed and paid for by Disney and its guests. The counties had to enlarge the airport as Disney World became the number one tourist spot in Florida bringing in 20 million visitors a year. The park employs 77,000 people which makes it Florida’s largest employer. It seems from the outside, both Florida and Disney benefited from the Reddy Creek Improvement Area.

The Florida legislature decided to punish Disney by disbanding the Reddy Creek Improvement Area in June 2023, however there are consequences which apparently the Republicans did not think about or are not concerned about. Reddy Creek Improvement Area has over a $1 billion dollars worth of development planned financed by bonds. When the Improvement Area is dismantled, the liabilities will be transferred to the two local counties, and the Florida assembly passed a law which says all taxpayers must be taxed equally. Disney saves tax money ($163 million a year) and the liabilities will be transferred to municipal tax payers. The Orange County Treasurer estimates that means a 25% increase in taxes for every homeowner in Orange County.

In terms of logistics for Disney, it will mean going through the 2 counties to improve the park which voters will have a say over budgets. Will Disney slow down its expansions? It is hard to believe they would move, but they could look for other locations – the Governor of Colorado has offered Disney land in the state. The other wrinkle in the works, is according to the agreement and Reddy Creek Improvement Area, to change the structure, the state has to pay off any debts of Reddy Creek, will Florida put up $1 billion?

Linking to dividend paying stocks, as an investor you have your opinions about the issues of the day and that is good and the way it should be. When you company has opinions, whether they are right or wrong according to you, as a shareholder you may want to either buy more shares or sell them. What should be the corporate viewpoint outside of trying to be a reasonable good citizen while making a profit and paying you dividends?

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

In every market there are 2 types of stocks – value and growth and then a mixture of the others. If you buy a growth stock, your expectations is the stock price will increase in the short and long run. If you buy a value stock, your expectations is the stock price will increase in the long run and it helps if the company pays dividends along the way. Sometimes the market loves one or the other and then it switches due to other reasons including expected higher interest rates. At the moment, the stock market likes value stocks and in particular companies that make profits. Companies that do not make profits, the market is looking for a reason to sell or send the price down.

In an article by Nicole Spring of the New York Times News Service, one of the many metrics Wall Spring was using to judge Netflix is subscriber growth. When offices were closed down, more people stayed home and watched more TV and often subscribed to a TV and movie channel. Netflix also aired some the best shows on TV, but Wall Street was more interested in subscriber numbers. The company reported the company lost 200,000 subscribers in the quarter. Total subscribers stand at 221.64 million compared with 221.84 in the last quarter. The analysts were expect an increase to 2.5 million. There were practical reasons why subscriber growth was down – a slowdown in the adoption of broadband and smart TVs; password sharing among households; increased competition among other streaming services; and Russia’s invasion of the Ukraine which resulted in Netflix shutting down in Russia or 700,000 subscribers.

Netflix is losing subscribers in the US but is growing outside the US which means the company will be putting more resources in its international production capabilities.

The company will be around for many a year, however as a growth stock, it may not be the best choice anymore. The company has to move towards being valued as a value stock because it did make $1.6 billion in profit on sales of $7.8 billion in first quarter sales an increase of 10% compared with the same period of last year.

Linking to dividend paying stocks, the excitement in the newspaper headlines about stocks refers to the growth stocks, however as a dividend investor you do not want to see excitement in your portfolio. You want to see the companies continuing to produce profits to pay dividends and as the other side sees the tremendous value, pushing up the multiple which means over the long term both the stock prices and dividends raise.