One of the rules in investing is to be cynical. Every company and government has a public relations facility and they all use them. Often times they will be at competing sides, and each side has a different narrative. When a government talks about waste, they often mean, those that do not agree with us. In a democracy, there are supposed to be competing sides and generally something in the middle is taken because there both sides can be correct, but both sides can exist for the benefit of government regulations.

In an article by Douglas Gillison of Reuters, the Trump administration has stopped the work of the Consumer Financial Protection Bureau (CFPB). If you go in person to a bank, you will see the signs on the door. The CFPB is funded through member banks, trust, credit unions, etc. The idea is if someone believes the bank is doing them harm, they can go to an agency which can investigate to see if harm is done. Many times, if harm is being done to one, then it is being done to many. The CFPB also battles those around the banks including financial institutions which are predators, scammers and crooks. We all know, when the solid, dependable financial institutions start acting like predators, it is relatively easy to juice up a quarter or improve bonuses. This is when the CFPB sets in and it has won judgements of nearly $20 billion in financial relief for US consumers. (seemingly also everyone has been sued and paid fines). Some of the smallest independent financial banks have been rarely fined.

It is the exception for financial services companies not to be have been fined, they have a tendency to wish the CFPB to go away. If it does consumers will lose, because many companies pay fines, say they will change and then see in their database – we have X amount of customers, if we could receive 2% more in fees we will easily meet financial expectations and they add a fee to get the 2%.

Linking to dividend paying stocks, the theory is because they have been in business for a long period on time and can pay dividends, they need to cheat the system less. If you look through the lawsuits which have been filed, invariably most companies have lawsuits filed against them. Ideally the dividend paying companies learn from the lesson and move forward in their service to customers. When you read the press releases, be aware there are 2 sides with different views.

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

Wherever you live, you live near a border. If it is country, there is another country on the other side. In the region you live, you will vote in a particular area, those lines change with population changes and it has to do where you live. If you are near one of the borders, it is entirely possible you cross it and feel connected to another area because it is where you work, you shop, do recreation, but you do something outside where you live. The connection allows you have some sort of roots and you do not necessarily wish to change. In many ways, President Trump’s proposed tariffs are the same thing.

On of the good things about tariffs is it gives a very good understanding of how the economic flows of the country work or do not work, according to your viewpoint.

In an article by Niall McGee, Emma Graney, Nicholas Van Praet and Brent Jang of the Globe and Mail, they examined how Canada views the tariffs and what changes could they make, if they had to.

Canada is dependent of US markets – 95% of Canadian crude oil goes to the US; also 56% of minerals are shipped to the US to be refined and manufactured into value added products.

Canada’s iron and ore industry is the single biggest part of the Canada’s minerals and metals export trade accounting for $20 billion in 2023. 99% of Canada’s steel exports go to the US.

Canada’s aluminum producers send 90% of their product to the US, but the majority is sold in ingots. In theory, because the EU has a demand for ingots, more ingots could be sold to the EU.

The nickel industry sends the nickel to smelters in the US, but they could send more to the EU because they are a net importer of the metal.

Potash and uranium are some of the critical minerals Canada supplies, the alternatives are China and Russia.

The oil industry is dependent on selling to the US, mainly to refineries near Chicago and Houston area. For a variety of reasons which has never been changed, Canadian oil is discounted when sold to the US. Canada has pipelines but they do not go from coast to coast. Many years ago, a decision was made to stop the western oil pipelines in Ontario. The province of Quebec and east received the bulk of their oil from the US and the Middle East. The reason was financial, pipelines are expensive and come at a political cost and imported oil was less expensive.

In the US, President Trump was suggested building the Keystone Pipeline is back on the drawing board. The Keystone Pipeline is designed to bring Alberta tar sands oil to a Houston area refinery. The crude is similar to which comes from Venezuela’ s oil sands.

In border towns and cities, each depend on the other country’s citizens going across on a regular basis. If it is relatively easy to cross the border as a visitor, people will go across for recreation, tourism, hospitality, shopping and the list goes on. If the border crossing becomes very difficult, it is easy to find similar activities in your own backyard, just not the same.

Linking to dividend paying stocks, when there is a crisis in any industry, the media shines a light on the economic activities of the industry. You can learn a great deal, and if you want to know more on the why, there are books on the subject. There is always a risk in depending on a single user group for your services and products. Sometimes it is wonderful, and you can build great relations; sometimes it is not. Diversification is often a very good thing to really have.

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

President Trump has been in power for a couple of months and as an investor, the first thing you know is he has a bias towards higher stock markets, which suggests successful business will be able to grow bigger. As long as the company is within the laws, the government will get them leeway to do what they need to do. Under the previous administration, while the stock markets went up, there was always stricter regulations in the background to even the playing field for consumers. Sometimes what is good for the consumer is not necessarily great for the business.

In January, the President decided he loves tariffs and wanted to impose cross the board tariffs on its 2 neighbors and biggest trading partners. Given 4 years ago, the President had renegotiated the NAFTA agreement (signed when President Reagan was is office) to the USMCA and now was asking who negotiated USMCA anyways? (it was him). The President has the authority to implement tariffs, but I guess he forgot the other countries have a right to tariff the US. Given the complexities of the how trade works, to take advantage of every country’s economic advantage, there were going to be negative reactions to the American economy.

On February 3, the day before the tariffs were to take place, the stock market through all the institutional money ran their models and determined a trade war would cause all 3 countries to move into recession territory. Why the tariffs were going to be imposed, it was hard to rationalize and many new Secretary in the Cabinet tried to. What was the end game? Why did it need a blunt instrument to negotiate with your friends and biggest trading partners? Many other questions were unanswered, but the result was going to be higher prices, lower demand and recession in all 3 countries.

The stock market went down and after speaking with the President of Mexico and the Prime Minister of Canada, President Trump paused the tariffs, and his stated reasons were going to be addressed by the countries.

The real point of this column is doing his term, President Trump will do actions that will cause the collective actions of the stock market to go down, then the markets will bounce back quickly, when the real issues are understood. If this is going to be the pattern it is important to keep cash or cash equivalents, particularly from dividend regularly received. The pattern of stock market reacting falling and bouncing back means there is opportunity to buy stocks, from your homework, that are at lower prices. The stocks bouncing back and can pay a dividend means the total return is greater just by understanding the pattern of the President.

Linking to dividend paying stocks, when you receive the dividends, there is opportunity to do something with the money, It can be to reinvest, as long as you believe in the long-term future of the company, it can be to diversify your portfolio (which is a good idea when the market fell, how did your portfolio do, besides down, but how much down and what went up?) Dividends are a good thing to look forward to.

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

Headlines often talk about companies disrupting industries but that is only part of the story. The other part of the story is what the big companies did or did not do. What were the assumptions or rational behind the little company that grew to become a disrupter. The good news is what we saw in DeepSeek happens in the business community on a regular basis. Large companies grow become monopoly like, seemingly having it all and then slowly something changes to level the playing field. Once that happens, the large company has to allocate more resources to maintain its position.

In an article by Cade Metz and Mike Isaac of the New York Times News Service, when DeepSeek revealed in had created an AI system that could match the big players from the US in AI, Silicon Valley was shocked. They were surprised because Silicon Valley’s belief system was to do AI would cost billions and billions of dollars, which means that only a few could compete.

At Meta, the experts inside the company did a reverse engineering of how DeepSeek works and they discovered it was related to something Meta did a few years ago. Before 2023, Meta was working on its version of AI called Llama, in 2023 it gave it away or open sourced it. This means developers from around the world could use it, to build on it, to make it better and move things forward. Meta saw this as a good thing.

DeepSeek used parts of that technology as well as other AI tools widely available on the internet through a software development method called open source. The reason Meta released Llama on open source is because it makes its money selling online ads, not AI software.

Meta has created several war rooms where employees are reverse engineering DeepSeek’s technology. The purpose is to find ways to lower the cost of trainings its software and apply it to Meta’s own AI. Remember Meta owns Facebook, Instagram and WhatsApp.

Yann LeCun, who is Meta’s chief AI scientist says the correct way to look at what has happened is Open source models are surpassing proprietary ones.

If Mr. LeCun is correct, the raising of billions of dollars to fund the expensive way is that good?

Linking to dividend paying stocks, all companies have a mixture of internal and external systems. but only larger profitable companies have the resources necessary to analyze all the successes of the competition. What is the competition doing? how is it executing? how does that affect us and why are we worried? There are many things to be concerned with for every country, but the competition has the same issues. Why does the strategy of the company you invested in continue to work? Sometimes the answers can be summed up in a 90 second clip and often times that is good to allow you to continue to hold your investments.

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

Ever since the internet, many companies have been disrupted from the long standing ways of doing things and as long as does not affect you personally most of it we can live with. Some industries were seen as harder to disrupt and narratives of why they are more stable lead to investments of billions of dollars. One of these groups was the AI use of computer chips to generate AI. The leader was Nvidia chips which have a high margin and Chat GPT which cost at least $100 million. Then something changed.

In an article by Meaghan Tobin, Paul Mozur and Alexandra Stevenson of the New York Times News Service, the change was a Chinese company with an AI app called DeepSeek.

DeepSeek’s origins are in finance, not technology for technology’s sake. Its parent is a Chinese hedge fund called High Flyer. It was using AI to make bets in the Chinese stock market.

In the Chinese stock market, if retail investors are jumping in and out of stocks, the Chinese government will mandate speculation is to be kept at a minimum for the long-term viability of the market. High Flyer decided to align itself better with the Chinese government priorities: advance AI.

High Flyer CEO Lu Zhengzhe said we want to do things with greater value and things that go beyond the investment industry. High Flyer started a startup called DeepSeek.

DeepSeek’s latest model for AI is believed to be nearly as powerful as American rivals but far more efficient. Its success is despite Washington efforts to limit Chinese access to the advanced chips needed for AI.

DeepSeek’s revenue model did not rely on making consumer-facing AI products for revenue, and only this month released its first chatbot, which allows anyone to generate text and photos with simple commands. High Flyer has been subsidizing DeepSeek with profits from AI trading.

The research and development approach allowed DeepSeek to side-step stringent regulations the Chinese government has placed on AI use by the public.

DeepSeek is run by its CEO Liang Wenfeng, an engineer who studied at Zhejiang University at Hangzhou.

Unlike many Chinese companies, which tend to focus on hiring programmers. Mr. Liang has given a reputation for employing people from outside of computing. Poets and humanities majors from top Chinese universities train the model to write classical Chinese poetry and ace questions from the country’s difficult college entrance examination. Most of the staff graduated from top universities in China – they are very smart and very young.

DeepSeek uses 10,000 advanced Nvidia A100 chips.

The DeepSeek model allows developers to build applications using its model and at the moment it was one of the least expensive models to work with. (Think of the Apple ecosystem – Apple is the foundation and developers build apps from the foundation).

Linking to dividend paying stocks, it seems every industry has the ability to be disrupted. You may believe that your SWOT analysis means few threats, but the lesson is for now. Things can change.

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

One of the biggest trends of the world of computing is Artificial Intelligence or AI and one of the keys to AI is faster and faster processing computer chips. To be faster and faster takes a great deal of electrical power. Companies that are building data centers examined the country to find out where there is surplus power generation and locate data centres near those sites. This is a good thing for both the company and the company producing the electricity.

In an article by Marc Levy of the Associated Press, what is good for the company and the company producing the power may not be good for the rest of the users. The story is if you live in a home, you turn on a light, the electricity comes from the grid which is a mixture of wires to your home, which come from the wires from the transmission towers which connects to the wires from the plant which makes the electricity. The deals between the power plant and data center directly avoids the potentially longer and more expensive process of hooking into electrical grid that serves everyone else.

In the article, the example is Amazon Web Service or AWS has signed a deal with Talen Energy which owns the Susquehanna nuclear power plant in eastern Pennsylvania. There are advantages to both companies.

2 eclectic utility owners – Chicago based Exelon Corp and Columbus based American Electric Power says the deal would allow AWS to avoid a $140 million a year for grid payments it would otherwise owe. Or if AWS does not pay, someone else has to pay for the maintenance of the grid.

The Federal Energy Regulatory Commission or FERC is the agency which must make the decision.

Linking to dividend paying stocks, for a long-time investor-owned utility companies have been a wonderful investment. They operate a monopoly like operation with the consent of the government and the regulator typically allows rates to increase every year. As long as the economic environment for the area is reasonably stable, the utility should be able to produce profits and implement capital spending plans that stay on budget which allows for stable growth and consistent profits including dividend payments. However, with every industry that can be changes and regulations can change.

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

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If you read a newspaper either online or turning the pages, invariably stories about the media will be in the newspaper. Similar to all organizations, there is a bias towards one sector or another, the news is bias towards the media business – it is their jobs. This is the reason it is good to read the magazines that are focused on your industry or the industry you work in.

When CNN started it was the age of regional broadcasting and CNN was part of Turner Communications which launched super stations on cable TV. Then the broadcasting world became easier to do and today we have podcasts, that allow people to do their own thing. It is good for the consumer, but how does a broadcaster adapt to the changing way people consume media news?

In an article by Benjamin Mullin of the New York Times News Service, Mark Thompson, CNN’s CEO says CNN must abide by the words of Ted Turner – give people news when and where they want it. Mr. Thompson says if we do not follow the audiences to the new platforms with real conviction and scale, our future prospects will not be good.

Mr. Thompson was previously the CEO at the New York Times and director general at the BBC, and for the past year and half. At one time most households in the US had cable TV, but changes have many people no longer relying on cable TV. They do many things including receiving news on the smartphone and streaming services. The solution for CNN is do the same thing.

CNN is expanding the number of data scientists and product engineers and will release a new subscription product later this year. The $70 million venture will be funded by parent company Warner Bros Discovery.

One of the priorities has been vertical videos which can be easily viewed on smartphones. CNN plans to release 50 to 100 videos a day. One of the keys to releasing videos is fact checking the information, and ensure it is up to legal standards. CNN has a new unit called CNN Fact Check that works closely with editors and producers.

Linking to dividend paying stocks, most people consume the news, and it is important as investors to read good information because you may make decisions on the information. Ideally many of your investments you can take your time with because the critical information includes are they profitable? and can they pay your dividend? If the answer is yes, then you can wait till the next earnings season before making decisions. Consume the news and to verify opinions, but make financial decisions based on facts.

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

In dealing with inflation, President Trump said the US will drill baby drill, and somehow inflation would drop because of lower energy prices. It might work in a different era, but it is not likely to happen. There are a number of reasons including: unlike the era around Rockefeller, drilling for oil is very expensive. The oil world is dominated by large multinational companies including Chevron which recently signed a $50 billion deal with Kazakhstan; Exxon has monster oil field in Guyana; and as well in the US, the production level reached a new high in 2024 and the list goes on.

In an article by Shelia Dang and Valerie Volcovici of Reuters, US oil and gas companies are unlikely to expand development in Alaska and the Arctic.

US oil production is already at record levels owing largely to increase production in Texas and New Mexico and companies have limited spending on new projects to focus on returning cash to shareholders in either/or buyback of stock or dividends.

Analysts say drillers may not be in a hurry to take advantage of drilling in Alaska.

The first risk is since many of the areas which are opened by President Trump have been closed for years, it would take a lot of time and effort to get to a position to drill. The risk is the next administration may stop the drilling. According to the American Petroleum Institue, drilling in Alaska is a high-risk venture involving decades of work and billions of dollars in investments. (once the oil is discovered in commercial quantities, it needs a pipeline to transport to the coastal holding tanks to ship the oil to the Houston area refineries.

Energy consultancy Rystad said Mr. Trump mantra of drill baby drill, overestimates the industry’s willingness to prioritize growth over generating shareholder returns.

Linking to dividend paying stocks, some of the major oil companies have been paying dividends for generations and with the thought of peak oil coming, it will be hard to convince shareholders growth is better than shareholder returns. At Exxon, the CEO discusses the disciplined approach they have to managing their capital spending and expected returns for the money. It is hard to imagine they would change course to drill more.

One other comment is when Trump says drill baby drill, it generally only applies to small and medium sized companies. The large companies already have their capital budgets and expectations of returns. If one thinks about penny stock promoters, the President sounds like them.

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

When President Trump was running for President, one of the many things he said was he wanted to reduce prices. People liked that, although he did not talk about raising individual incomes, but the price of things. In reality, prices are determined by a wide variety of factors, including what the happens at the White House.

In an article by Jessica Dinapoli and Ananya Mariam Rajesh of Reuters, Proctor & Gamble or P&G will again look at raising prices on its household basics such as Tide detergent, if the US imposes new tariffs.

P&G CFO Andre Schulten said, we will deal with what the administration does, first they will try to offset tariffs with cutting costs. What we cannot offset with productivity, it might result in incremental price increases.

P&G is a powerhouse in consumer products and buys inputs such chemicals, razor blades and small electronics from around the world and manufactures the final product closer to consumers in local factories.

P&G has increased prices over several years as it faced escalating costs of fuel and labor.

One of its many products is Gillette, over the past 4 years P&G has overhauled its razor blade supply chain, a move that could cushion its margins under new tariffs.

In 2024, P&G locked its pricing in for Chinese chemical supply for its sunscreens.

P&G also has formulation flexibility, meaning it can adjust the ingredients in is products if they become too expensive or unavailable owing to tariffs.

After COVID hit the world, P&G invested $6 billion in US manufacturing in the past 6 years.

Linking to dividend paying stocks, P&G is a dividend favorite because it has close to 20 brands that generate well over $1 billion. If you look in your house, you will likely see some P&G brands. Those kind of products and marketing abilities ensures P&G continues to generate profits and pay dividends. When you examine the companies you earn, have they adjusted their supply systems to ensure.

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