Most people know about Apple’s iPhone. It is designed in the US, made in China and is the number one seller in the 2 of the biggest markets in the world – the US and China. Apple is moving production from China to India because the economy of the country is growing and soon it will be the number 3 market in the world. Meanwhile Apple has to deal with the Trump administration.

In an article by Tripp Mickle of the New York Times News Service, the present tensions between China and the US is making life difficult for Apple.

The next generation of iPhone will include AI features, that is a given. In recent months, the White House has been scrutinizing Apple’s plan to strike a deal with Alibaba Group to make the Chinese company AI on iPhones in China. They are concerned that the deal would help a Chinese company improve its AI abilities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple’s exposure to Beijing laws over censorship and data sharing.

3 years ago, the US government succeeded in pressuring the company to abandon a deal to buy memory chips from a Chinese supplier Yangtze Memory Technologies Corp or YMTC.

Walking away from an Alibaba deal would have far greater consequences for Apple’s business in China, which accounts 1/5 of the company’s sales. The partnership with the Chinese tech company is critical to bringing AI features to iPhones in one of the world’s most highly regulated and competitive markets. the rivals are Huawei and Xiaomi.

Officials at the White House and the House Select Committee on China have raised the deal directly with Apple executives.

The concern with AI is will it become a crucial military tool for the Chinese?

Linking to dividend paying stocks, most of us focus on the great aspects that AI can and will allow consumers, but AI can also help the military infrastructure, after the internet was partly funded with military dollars. From Apple’s perspective, because economies such as China developed on the cell phone, they are integrated into people’s banking and personal lives. There is an enormous amount of data to capture and sell to people. Sometimes the largest companies have shared common interests with the home government and sometimes the interests are less intertwined.

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

Investing involves risk. Risk means there are things you know and things you do not know. For most of us, the risk is manageable, but what if your task involved the macro level? Fortunately, we have books and articles written on the subject, and one book is called Averting Catastrophe by Cass R Sunstein, published by New York University Press, NY, 2021.

Mr. Sunstein is a professor at Harvard, and for a few years worked in the White House to develop a social cost of carbon. Mr. Sunstein focuses on public policy and regulation, and he believes in the maximin principle which calls for choosing the approach that eliminates the worst of the worst-case scenarios

For certain regulatory problems, many people accept the Precautionary Principle. The central idea is that regulators should take aggressive action to avoid certain risks, even if they do not know that those risks will come to fruition.

People tend to be loss averse, which means that they view a loss from a status quo as more undesirable that they view an equivalent gain as desirable. When we anticipate a loss of what we not have, we can become genuinely unhappy or afraid in a way that greatly exceeds our feeling of pleasure when we anticipate some addition to what we have.

Loss aversion is closely associated with another cognitive finding: people are far more willing to tolerate familiar risks than unfamiliar ones, even if they are statistically equivalent.

John Maynard Keynes wrote you are dealing with “uncertain knowledge”, there is always information while it is possible to consider what is probable, there is no scientific basis on which to from any calculable probability whatever. We simply do not know.

The Principle of Insufficient Reason holds that when people lack information about probabilities, they should act as if each probability is equally likely.

Linking to dividend paying stocks, investing is about risk and the more you understand the principles and psychology of risks, ideally the more you can deal with it. There are a number of different principles, and your investing style will determine which ones you fit into. When you buy dividend paying stocks, there are two ways to control the risks – buying a profit company and receiving a cash payment on a regular basis. Profitable companies tend to trade at higher multiples and receiving a payment allows choices – buy more, diversify, and the list goes on.

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

All companies have a statement of values and for customers and potential customers it is very hard to disagree with them. The companies say their intended purposes and because we agree with them, as an investor you can feel good investing in the company. But do the companies actually live up to it?

In an article by Anne D’Innocenzio of the Associated Press, one company that lives up to its statement of values is Walmart. The company is the biggest retailer in the US and it makes low prices a priority. If you have ever shopped there, you will see price drop and the slogan all over the store.

Executives at the $750 billion company told industry analysts, they were doing everything in their power to absorb the higher costs from tariffs as ordered by President Trump. However, given the magnitude of the tariffs, higher prices are unavoidable.

For all those companies importing from China, President Trump increased tariffs across the board to 50%, then 90% then 145% and has come down to 30% for 90 days.

In the retail world, companies order 6 months in advance to have inventory for the season because during the winter, not many people buy shorts. They buy jeans, heavier pants because it is cold out or there is a time lag with retail.

CFO John David Rainey said even though the quarter had good sales, we are wired to keep prices low, but there is a limit we can bear, or any retailer for that matter.

Mr. Rainey said the retailer did not pause shipments from China as a result of the tariffs, because it did not want to hurt its suppliers and wanted to keep merchandise flowing. 2/3’s of Walmart’s merchandise is sourced in the US, with groceries accounting for 60% of Walmart’s US business.

China represents a big chunk of volume for certain categories such as electronics and toys.

Walmart is asking suppliers to swap input materials for components if possible.

CEO Doug McMillon said for some goods simply cannot shift production or produce easily in the US and that will not change for the foreseeable future.

Walmart earned $4.45 billion or 56 cents a share for the quarter. Revenue rose 2.5% to $165.61 billion.

After the earnings call, Treasury Secretary Scott Bessent called CEO McMillon and tried to explain to the public that Walmart benefited from lower gas prices, and that when companies talk about the possibilities, they have a shareholder’s duty to talk about the worst-case scenario. Secretary Bessent was hoping that will not happen, but prices do rise.

Linking to dividend paying stocks, companies report every quarter and the bigger companies often come into the financial press. If you own a smaller company, then industry specific publications will report the results as well as the company’s website under investors always has information for investors. The industry publications help you see trends and what is coming next and you can evaluate if your company is still hitting your targets.

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

If you remember back to April when spring was slowing coming in, the weather started to be warmer and there was much to look forward to. Then President Trump announced Liberation Day and the stock markets went down because this was a drastic change to global supply chains.

In an article by Jamie McGeever of Reuters, he asks the basic question, what was the point of all that Liberation Day chaos and confusion?

President Trump is the self-styled Tariff Man, although it took till mid-May before he realized the companies that import the items will charge higher prices to consumers. One can argue the economic merits of his agenda, but was the strategy and implementation?

3 days after Liberation Day was announced, $6 trillion in stock value was wiped out. It has taken a month and half to come back, but only because tariffs were changed to lower or semi-manageable.

According to the Yale Budget Lab, the tariffs are forecast to raise $2.7 trillion in federal revenue over the 2026-35 decade. This is up from an estimated $2.4 trillion. For the extra amount, the Yale Budget Lab believes the US economy will be 0.4% smaller.

Meanwhile, for an economy that runs on consumer spending, US consumer and business spending has slumped to its lowest levels on record and expectations of higher inflation is the highest in decades. At the moment, until people determine some sense of stability, spending is on hold.

Faith in America as a reliable partner has clearly diminished. As HSBC currency analysts reminded their readers: trust takes years to build, seconds to break and forever to remake.

Linking to dividend paying stocks, in the chaos that went through the stock market, we saw institutions selling, but retail investors holding. Partly because if the government made the mess, it could do better and fix some of the mess, which allowed stocks to return to their previous levels. The issue was the time delay. When you invest in the stock market, the record shows overtime the assets perform well, but during the time they also fluctuate in values. When to sell is very hard to know, but overtime the values tend to go up. If you buy a company that makes profits, it values bounce back faster than those that do not make profits.

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

We all play a role in the economy and some are near the top and some are near the bottom all for a multiple reasons that can be rationalized. The ideal for the average person is to be in the middle with enough assets to go through the cycles of the economy and still be okay. At the top, there are very wealthy people and one way they achieved the wealth is hedge funds and private equity. There are many different paths, but any path which allows for money to be made is legal will draw many people to see if they can capitalize on the opportunities. There are risks and rewards in doing so, and for a glimpse of what it is like there are books to be read. One such book is called Private Equity, a Memoir by Carrie Sun, published by Penguin Press, NY, 2024.

The author’s job was to be the assistant to the firm’s billionaire founder. Working for a profitable firm is both stressful and full of perks and reasonably high pay. The events in the book are true, but the names are fictional. The author liked working for the firm, but the stress of maintaining expectations and always been ready to ensure her bosses had the necessary documents for meetings was relenting.

Similar to sports, the key is investing is not to win once but consistently overtime and that is easier said than done. The reason is once you are successful, every other firm will examine what did you do and how did you do it? what is the secret sauce? Conferences often have successful sport coaches talking about how they remained consistent for their careers.

The secret is simple. The first is compounding. Stay in the market as much as possible. Have it invested it. Wait out any panic and let it ride. let it grow. It is easier to do the richer you are.

In a crisis, the wealthy have the ability to keep buying or buy assets when they are inexpensive. Then wait till the world returns to a new normal and the asset prices rise. (When President Trump imposed tariffs on the world and stock markets went down, did you sell? hold? or buy? It took a month before some form of normalcy came back, but it did come back, and the stock market rose in value).

Access. If you have money, people will want a piece of it and bring all kinds of deals to you. The ability to say no is very important, but somewhere in all those deals can be the next big thing. Somewhere in the normal life cycle of companies will be the high growth phase, the hedge funds have tapped into this economic lifecycle. Once the companies have proven themselves, then they go public for the insiders to cash out some of their holdings, but at higher prices. Retail investors can get in, but companies used to go public at lower prices or what was known as penny stocks, now not so much.

Linking to dividend paying stocks, investing in profitable stocks which pay a dividend is using compounding and over time both the dividend payments and profitable companies tend to trade at higher multiples than non-profitable companies, means you will be richer. It all depends on how fast you wish to get there. As your assets grow, you will have options what to do with the money and having those types of options is a very good thing to have.

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

We live in a world where there are instant communications including news cycles. This tends to mean people think that things can get done quickly. Although it is possible, timelines are falling thanks to AI and technology, but there tends to be a time delay. President Trump communicates on a social media platform and has a press conference just about every day, even when there is not much to say or was done. This means reporters ask for details and they can refer to officials who often say we will get back to you.

In an article by Jill Lawless and Rajesh Roy of the Associated Press, Britain and India announced after more than 3 years of negotiating, a free trade agreement was signed. On the British side, the government had changed which lead to some delays.

PM Starmer said this is the biggest trade deal that we in the UK have done since we left the UK and the most ambitious trade deal that India has ever done. Understanding that prior to India’s independence, the UK essentially ran India. When the industrial revolution happened in Britain, it forced India’s clothing mills closed so the population could only buy British textiles.

The deal which must be ratified by both countries, comes as the US wishes to strike deals in 90 days. This deal took 3 years for both countries to be satisfied with the outcome.

Linking to dividend paying stocks, one of the reasons to buy these stocks is the time horizon. Ideally you are going to buy and hold as long as the company makes a profit to pay dividends. This means you need to ensure they can make a profit, but the amount of homework you need to do on a regular basis allows you to focus on other activities of your life.

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

In the 1960’s there was a song on the radios sung by the Byrds called Turn! Turn! Turn! and its lyrics had the phrase To everything, turn, turn, turn There is a season, turn, turn, turn And a time to every purpose, under heaven. If you drop the turn. To everything there is a season.

That phrase is very purposeful for the world in general. Typically, there is more rain in the springtime which is good time to plant things. In the summer it is warmer, and hopefully the seeds became crops. When they grow, it will be time to harvest in the fall and when it is cold to let the land fallow or do something else. The phrase to everything there is a season is very important for the retail world.

The retail world depends on supply chains. How does something get on the shelf? It means to work backwards, hopefully using AI to help plan. The idea is what were the sales last year and how long does it take when a shopkeeper orders the goods to when it arrives from whoever manufacturers it. In the retail world there are seasons, people rarely buy winter coats in the summer, they buy shorts and t shirts. That means the supply system tends to work 3 to 6 months in advance. If you know anyone in the advertising business, they are working on Christmas campaigns in the summer and Summer campaigns in the wintertime. It is always possible to short time lines, but it is generally they way it works.

In an article by Daisuke Wakabayashi of the New York Times News Service, President Trump imposed tariffs across the board to countries around the world. As President, technically under the certain conditions he can do that, unless someone sues to determine the national crisis is not a national crisis and wins. Then the President has to work with Congress to approve the policy. In the meantime, it is what the law is.

Tariffs mean the importer pays a higher price. Whether the importer decreases their margins or passes it on the customer is debatable, but generally it means higher prices to the consumer. Partly because the companies which are the alternatives tend to raise prices, because the public accepts higher prices will be a result of the policies.

Factories in China produce nearly 80% of all the toys and 90% of the Christmas goods sold in the US. The production of toys, Christmas trees and decorations usually ramps up in the springtime. It takes about 4 to 5 months to manufacture, package and ship products to the US. Then they have to be distributed to the stores across the country.

President Trump imposed a 145% tariff or doubling of all prices. No retailer is going to eat the tariffs, they will pass on higher prices. How much will people buy is the issue?

Greg Ahearn, CEO of the Toy Association of US representing 850 toy manufacturers said if the production does not start very soon, there is a high probability of shortages by Christmas. Largely to logistics.

One of the primary reasons the toys are made in China is because Chinese manufacturing is unmatched in its production and capability. Toy makers change large portions of the product line every year to adapt to changing preferences of children. From materials to machinery, China’s factories are one stop-shops for importers. (the designers are typically in the US).

Kara Dyer, founder of Storytime Toys, a maker of children’s books with playset numbers, usually places an order in April to have inventory by mid-July. The Christmas holidays account for 2/3’s of her revenue. Kara placed a small order of $30,000, under a 145% tariff, the tariffs will be $45,000. The price of toys has automatically gone up 20%.

In a Toy Association survey of 410 toy manufacturers with an annual sales of less than $100 million, more than 60% had cancelled orders. If the tariffs remain, 50% expect to go out of business.

Some companies have rerouted their inventory to Mexico or Canada in the hope the tariffs will be lowered. This is a partial solution as manufacturers have to start paying fees for storage and the longer the item stays in storage the bill becomes due, with no sales. When the item comes in the US, the tariff is on the originating country.

Linking to dividend paying stocks, often times somewhere in the music you listen is the story. Although you have to do plenty of backstory to fill in the gaps. With all goods, there are logistics involved and understanding how the logistics works helps you be a better investor as you decide to hold or find alternatives.

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

Most of the world is excited by some form of technology or other. We are attracted to the shiny, the new, the possibility, and we can either participate or watch from the sidelines. In the world of technology there are always egos involved because the technology changes the established way of doing things. To be an early adapter, you need to take a risk and with all risk sometimes it works out wonderfully and sometimes money is lost.

In an article by Gus Carlson of the Globe and Mail, the two richest people on the planet are Jeff Bezos and Elon Musk. There sources of income are different – Mr. Bezos with Amazon and Mr. Musk with Tesla, but they compete in space. Their high-profile space race is taking passengers into space but their real competition is deploying satellites.

With Amazon, the need for connectivity is everywhere and one method to achieve it is through satellites. Project Kuiper is slated to deploy 3,000 low-Earth orbit satellites. This means soon where ever you go in earth, you should be able to get a signal. The cost to do this is $17 billion. Mr. Bezos was using a rocket going up on Florida’s Space Coast or Cape Canaveral.

Mr. Musk through Space X owns Star Link which has thousands of satellites in operation with over 5 million customers. The quality and reliability of the Starlink service is remarkably good. Mr. Musk uses the Brownsville, Texas location where he has launched numerous rockets and brought them back safely (there are some interesting You Tube videos about the rockets coming back).

Linking to dividend paying stocks, often with technology the race is to be the first out of the gate while achieving quality and reliability. The customers come and similar to many customers, once signed up, it takes a large effort to move to another provider. Often times it more profitable to invest in the company which is first to market, than in the second company, because the normal rules of business of revenues – expenses equals profit or loss.

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

Most of us live in areas where we grow up and expect services to operate and for the most part they do. When we wake up, we turn on a light to see and the electricity is there to operate the light and life goes on. Everyday that action happens, our expectations grow that it will continue into the future. When it does not, we are somewhere between surprised and outraged that the service is not there.

In an article by Jose Bautista, Jenny Gross and John Yoon of the New York Times News Service, in the countries of Spain and Portugal, the electricity went off for 18 hours. No one really knows what happened, but many investigates are going on.

Sara Aagesen, one of Spain’s Vice Presidents said we are collecting thousands of data points from the energy system to shed light on what happened.

President of Spain met with the National Security Council officials and the Council of Ministers to discuss the outages.

The Spanish government had not ruled out a cyberattack on the transmission grid, even though Red Electrica, Spain’s grid operator said there was no evidence of one.

The National Cryptologic Center which oversees cyberthreats was also investigating and a judge ordered reports within 10 days from Red Electrica, the intelligence services and the police.

The International Energy Agency in Paris noted there have been relatively few instances of disruption due to cyberattack, the issues are often related to equipment failures, operational errors and effects of storms.

After power was restored, Spain’s Interior Ministry downgraded the threat level from extreme to medium to normal.

Prime Minister Luis Montenegro of Portugal said after an emergency government meeting, it appears there was an abrupt increase in voltage in the Spanish grid which caused safety mechanism to kick it that led to the blackout.

Linking to dividend paying stocks, one of the things as investors you believe is there are systems in place when something goes wrong. It may be nothing illegal but there are multiple groups of knowledgeable people who can review the data and make a determination and hopefully it does not happen again. One of the ways you can determine this is how did the company react to threats that are made public. Was the problem solved? how long did it take? and how much did it cost the company?

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