As an investor, you are interested in results, did the company make a profit? can it pay a dividend? and if can and does, the company is worth looking at, keeping your holding and maybe investing more money into. After the results are in, there are always other issues in how the company functions, maintains and keeps workers and will continue to make money.

In an article by Emma Goldberg of the New York Times News Service, 5 years the world reacted to COVID by shutting down and working remotely. Is it time to change to in house or hybrid or something in-between.

President Trump wants federal workers to be in the office and not work remotely. CEOs of Amazon, JPMorgan Chase and AT&T have told their employees they want them in the office 5 days a week.

Amazon moved from 3 days required since May 2023 to 5 days starting Jan 2 or as soon as space is available. CEO Andy Jassy said the office would be better allow workers to invent, collaborate and be connected to one another and the culture of Amazon.

JPMorgan Chase believes that in person would support better mentorship and brainstorming. JPMorgan will have 5 days starting March 1.

Nick Bloom an economist at Stanford University, believes sometimes a back to the office push is a way to reduce head count, because some will decide not to come back. Data from a Stanford project tracking work from home rates show that more than 1/4 of paid full days in the US are remotely working. About 3/4’s of Americans whose jobs can be done remotely continue to work from home some of the time. according to Pew Research. The main reason is the flexibility that remote working allows.

Some companies have no plans to change remote work including investment firm TIAA.

Other companies such as Yelp believe being remote helps them attract and retain employees and that is the way they are going to continue.

Linking to dividend paying stocks, while everyone can have an opinion of what works best, it is the results that investors are looking for. Ideally, you want the company you invest in to be recognized as a good company to work for because it cuts costs on both recruiting and retaining people. If the company is a good place to work for, the company can focus on making money and that is a good thing.

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

If you ever watched sporting events on TV or have participated in them, when the team wins the championship, bottles of champagne are opened and sprayed around the around. Champagne has an image and the celebration of winning goes with the image of champagne. In the movies, champagne is often used seen in weddings and opening of major marketing campaigns, champagne often goods with celebration. Think of New Year’s events and the popping of the champagne bottle as an image.

In an article from Reuters, the key markets of champagne are the US and France. It turns out French champagne shipments fell 10% as economic and political uncertainties hit consumers appetite for the sparkling wine.

Full shipments were down 9.2% from 2023 at 271.4 million bottles. Maxime Toubart, president of the Syndicat General des Vignerons and co-president of the Comite Champagne, said Champagne is a real barometer of the state of mind of consumers.

The French market made up of 118.2 million bottles, down 7.2% compared to 2023.

David Chatillon, co-president of the Champagne Committee said, we must prepare for the future, maintain our environmental standards, conquer new markets and new consumers.

Linking to dividend paying stocks, in every commodity field, the supply and demand graphs are one of the most important elements to the profitability. When prices rise, more fields produce the crop, when prices fall, the fields produce something else. There is always a demand, but at what price? and what margins? In your life did you drink champagne when you were celebrating? in not, it shows how trying to conquer new markets and consumers is a hard job to do, but it can work and for champagne producers how do you celebrate?

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

In the old days, living in the northeast meant at times thinking and sometimes going south for the warmer weather. It seems this winter, to get the warmer weather, you needed to go further south than the southern states. If you did, you would come across countries that look and do similar things to what you are doing are trying to do. In countries outside the US, there are many families trying to earn a living, grow their savings and have a reasonable safe experience. After you notice that, then you ask what companies are the people dealing with? and are there any opportunities?

In an article by Elisa Marinuzzi and Brad Haynes of Reuters, the fintech that created Latin America’s most valuable lender is called Nubank which is owned by Nu Holdings Ltd. The founder and CEO David Velez is considering expansion into the UK.

The company was started a decade ago in San Paulo, Brazil and has grown past 100 million customers in Brazil, Mexico and Columbia, making it one of the world’s largest digital challenger banks.

Under President Trump’s administration, Mr. Velez said it has signaled a likely embrace of regulation for digital services which should create a more favorable environment for Nubank to consider entering that market.

Nubank is headquartered in the Cayman Islands has 40 people working for it in Berlin, Germany. Nubank recently made a $150 million investment in a Singapore based digital bank Tyme Group which has 15 million customers in South Africa and the Philippines.

Linking to dividend paying stocks, if you examine your portfolio, you will likely have a bias toward the country you live in. There are many good reasons, you can easily follow them, there is a market for them, some of them will have exposure to other countries. It is important to remember outside the US there are companies doing the same thing companies in the US do. In this example, if you happen to go south to warmer climates, one of the things you can do is examine who the companies are that people are dealing with? When you get back, you can do your homework to see if you could invest in them. There are always multiple opportunities, sometimes it is better to have a bias toward your area and country, sometimes it is good to stretch your horizons.

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

In the world of investing, the number one rule is try not to lose money. Most investors are focused on the upside, because your wealth will increase if you are close to being correct, just a matter of how much of an increase. With the emphasis on the upside, every company no matter how big or small is focused on showing they are growing, unless there is a recession and why they would be one of the few companies making tremendous profits. After a few years in business, companies tend have assets – land, bonds, etc. that have gone up in value and to ensure reasonable stable earning they can sell some assets to ensure they meet the expectations of the street. But what happens when a company stretches the true of accounting or uses accounting tricks to show a profit when in reality they are losing money. Fortunately, for investors there are some possible solutions.

In an article from Reuters, one of the solutions since 2017 is a short seller firm called Hindenburg Research. Ideally under AI, the process will get easier, but there are companies such as Hindenburg that are skeptical of every earnings report. Some sound great, but they are built on a house of cards and can come tumbling down. However, it takes a great deal of research, then the correct conditions before everyone sees what the Research team sees.

Hindenburg Research went through a number of companies and did not believe the story being told, some were outright lies. Then the company began to short the shares of the company, it involves borrowing stock to sell it and hopefully buying the stock back at a lower price and pocketing the difference. The risk is if the price rises, the seller can be exposed to potentially unlimited losses. To short means the cost of borrowed money, plus margin, plus needing the stock to fall drastically to make money.

Over the years, Hindenburg Research shook some empires that we felt needed shaking up and nearly 100 people have been charged by regulators, said Nathan Anderson, President of Hindenburg Research.

Once reports have been written, regulators examine them, and there is time delay before verification of either fraud, accounting issues, or mismanagement.

After the short seller’s report is issued, senior management of the company will accuse the short seller of having a vested invested, use the Public Relations to explain what a sound company it runs, and the list goes on. To be a short seller, one needs a thick skin.

Linking to dividend paying stocks, ideally because a number of analysts follow the company and over the years they should understand the company as it meets expectations, no short seller should be reported on your investment. We all know companies shares go up or down or fluctuate but over the long term, many will rise in value. The issue for the larger company is that there should be no reason for fraud in the accounting books, if there is quickly find alternatives because there will be a time delay before the stock will tend to go up.

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

If you enjoy alcohol, eventually you will want to see where the alcohol is made. All spirits makers have tasting facilities and tours. If you are visiting the area, going to a distillery is a pleasant experience. If you are in the Louisville area, the Jack Daniels Whiskey plant is worth touring, along with the many other distilleries. It is easy to spend time in the area. When you are walking around the grounds, you have a sense of how they make it and the people who make the alcohol. One of the hardest things for companies to do is break traditions and cut its home-based employees in order to cut costs. While investors like to see the discipline of cutting costs, whether they are, it is tough decision for the executives, particularly when the operations are hometown.

In an article by Bruce Schreiner of the Associated Press, spirits giant Brown-Forman whose flagship brand is Jack Daniels Whiskey is reducing its workforce by 12% including closing its hometown barrel-making plant in Louisville. Brown-Forman has a workforce of 5,400 people and out of the total 210 work in the barrel-making plant.

The company will outsource the barrels from an external source and expects to receive $30 million from selling cooperage assets. The company has been making barrels since 1945 – raising barrels and honing the craft using wood to create distinct flavor characteristics to bourbon.

The reasons for the cost-cutting comes as American whiskey producers face changing consumer trends and renewed tariff threats. (when President Trump imposes tariffs on another country, they impose tariffs on American products including high profile whiskey).

According to the Kentucky Distillers’ Association, a record 14.3 million barrels of bourbon are aging which is a large inventory.

Industry wide challenges include that younger adults are drinking less alcohol and threats of a trade war. Retaliatory tariffs have cost Kentucky’s bourbon industry a half-billion dollars in exports since 2018.

Linking to dividend paying stocks, in every town and city there are plenty of bars and alcohol shops selling beer, wine and spirits. There are many companies in the industry although some of the biggest names are owned by the biggest companies. Whatever the trend of the young people who buy and consume, the larger companies buy a brand and use their abilities to market brands to sell their brands. While an individual may be attached to a certain brand, which one is popular goes up and down and sometimes companies must do the difficult thing to maintain profits.

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

Many mergers are announced and some go through, some do not, and some become political because jobs and traditions are seen in the roots of the company. Every community needs economic activity to grow and maintain services for the people in the area. The longer the company is in business, the more people are attached to it. Then a merger is announced, and people and politicians react. The biggest story in the news has been the US Steel sale to Nippon Steel.

In an article by Danielle Kaye and Laren Hirsch of the New York Times News Service, a few months ago, Cleveland-Cliffs announced a possible buyout of US Steel for $7 billion, Nippon Steel increased the offer to $15 billion.

The Board of Directors of US Steel believed the offer by Nippon Steel was the best one, then politicians had their say. President Joe Biden said no for a number of reasons, including national security. President Trump said he supports steel workers.

Lourenco Goncalves, CEO of Cleveland-Cliffs is resubmitting his possible merger.

There is always a wrinkle in the cloth, and US Steel and Nippon Steel have sued the US government.

US Steel was once the world’s largest steel producer, but the company has fallen in global rankings in recent years. Concerns about its long-term future are rooted in a failure to quickly adopt alternatives to traditional mills that are more energy-efficient and cost-effective. US Steel has argued Nippon is the only buyer that can make substantial investments in multiple steel mills and protect jobs.

It is expected that President Trump’s administration would take a less aggressive approach to merger enforcement than the Biden administration predecessors.

Linking to dividend paying stocks, when a merger is announced, investors have a wide range of interests from short-term to long-term. Politicians change every 4 years or less, but they have a voice which represents their districts and/or state. Often times investors can outlast the outside voices as long as the company is making a profit or it prudent to find alternatives and watch the action from the outside and then buy back at lower levels.

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

In the world of insurance, the idea is to collect lots of premiums and hopefully pay out little. If there is a payout, the avenues of re-insurance are there for companies to hedge their losses to a wider and potentially wealthier group of companies. The people who determine the policies, we all pay are called actuaries who have degrees in actuarial science – the discipline that applies mathematical and statistical methods to access risk. For most of us know, have low insurance rates, not collect against accidents to keep low insurance rates, but because of various law regarding use of the automobile and having a mortgage, insurance payments never go away.

Natural disaster are the worst thing for an insurance company, because it is nature everyone should be covered, if everyone is covered expenses quickly rise. The issue is what happens after the disaster has gone and rebuilt has started and life returns to normal. Changes in rates can happen.

In an article by Andy Sullivan of Reuters, the wildfires in Los Angeles affected all aspects of the city including the wealthier areas. The Pacific Palisades is one of the most expensive neighborhoods in the US, it was also one of the most affordable insurance costs in the country. Reuters examined insurance and real estate data to come to the conclusion.

The scale of the losses anticipated, changes in regulatory issues, and now that a wildfire has gone through the neighborhood – the risk of another likely will send insurance premiums upwards.

Philip Mulder, an University of Wisconsin professor noted measured against home values, insurance costs were cheaper in the Palisades than in 97% of US postal codes.

This relatively low-cost insurance was from consumer-friendly regulations in California kept a lid on prices, but the insurance companies have been scaling back the coverage they offer.

Sangmin Oh, a finance professor at Columbia School of Business and other researchers found that homeowners in more loosely regulated states effectively subsidize homeowners in states such as California where the industry is more regulated, despite the risk levels.

Homeowners in Pacific Palisades paid a median insurance premium of $5,450, according to data complied by Dr. Mulder and Dr. Keys of Wharton. The amount is less than residents paid in Glencoe, near Chicago. It was also less than those in paid in New Orlean’s Ninth Lower Ninth Ward.

In California, consumer-friendly policies led to price controls which limit price increases. The insurance companies are struggling to make a profit and 7 or the largest 12 insurance companies have paused new policies. In addition, 1.72% of policies were dropped in 2023.

The alternative is a state-run insurance which provides bare-bones policies. More than 450,000 homes were covered by the California Fair Access to Insurance Requirements plan in September, 0 40% increase from a year earlier. The fund is administered by the state but funded by insurance providers.

Linking to dividend paying stocks, some of the big insurance companies have been a wonderful investment, but as there are more natural disasters, the profitability falls. In a natural disaster happens all classes of insurance are hit, will rates increase and coverage become more barebones? can companies raise rates to ensure margins?

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

Unless you live near the ports, you likely do not think much about them. Every city on a lake or ocean has a port, most of us think about the recreational facilities first as we may use them from time to time. Whether it is a marina or walking trails or wharf businesses or ferries, but most of us do not pay attention to who runs the ports. At one time every port was run by a quasi public facility to boost the economic activity of the city. Now days it has changed.

In an article by Ana Swanson of the New York Times News Service, President Trump’s claim that China runs the Panama Canal is false. The Panama Canal is operated by an agency of the Panamanian government. The President of Panama Jose Raul Mulino said Mr. Trump’s claims are false, the government of Panama runs the Canal.

There are issues with China for the Chinese government has invested heavily in building ports throughout the world. Given that China is the world’s largest exporter, private Chinese companies play a major role in shipping and port operations, giving them significant influence over the movement of global goods and strategic positions from which to monitor other countries’ activities.

If you go onto You Tube and examine the Belt and Road Initiative, you will see China has invested in ports in Asia and Africa. The Chinese typically offer assistance to countries, but then all the work is finance and done by Chinese companies. Also on You Tube are wonderful videos of Chinese ports operating with few people.

In the last decade 2 private companies have arisen called DP World based in the UAE and CK Hutchison based in Hong Kong. CK Hutchison is a publicly listed conglomerate whose largest owner is a family of Hong Kong billionaires. One of the divisions of the company is Hutchison Ports PPC which for decades have operated seaports around the world including in Panama. The division operates in 53 ports in 24 countries including the Netherlands, Britain, Hong Kong and Australia.

A recent report by Strategy Risks, an analytics firms, said that no direct links specific to Panama had been found between CK Hutchison and the Chinese Communist Party, however it is believed the company has shared information with various Chinese state-linked entities on business projects.

Linking to dividend paying stocks, just be being successful and growing, the company will be seen as an agent with the government. However, in every business, sometimes the government is wonderful, sometimes it needs to be eliminated and most of the time they work together as their interests intersect. Businesses have their own interests and government has theirs, hopefully it is mutually beneficial than not.

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

In the world of business and politics, they are overlap and that can be a very good thing for a business. The government through its many boards and agencies can help a company but making it harder for the competition to compete. The business benefits by the increased barriers or access to lower cost of funds, maintains employment in the area and local and national politicians tend to stay elected. It can be a win-win situation for all those concerned.

Sometimes the government has its own agenda, which does not align with the business. In the case of US Steel being acquired by Nippon Steel, the government’s agenda does not align with Nippon Steel. Nippon Steel is owned by Japanese shareholders. The government has a desire to keep US Steel majority owned by US resident shareholders. The bad news is US Steel need a major capital commitment to continuing using its blast furnace steel making facilities. The government has an image of what US Steel was and would like it to rise again without the help of Nippon Steel.

In an article by Aatreyee Dasgupta and Alexandra Alper of Reuters, President Joe Biden made a decision to block the sale of US Steel to Nippon Steel and he has the ability to do it. Part of his rational has a national security issue.

US Steel’s Board of Directors and Nippon Steel still want to merge, and they are seeking a solution through the courts. They have filed a lawsuit saying the President violated the Constitution and made a bag decision using the National Security clause and the process was flawed.

The problem for Nippon Steel, courts generally give great deference to how national security is defined and implemented.

The other problem is also political, President Trump is not necessarily for the merger, but maybe.

From a financial standpoint, US Steel has $1.8 billion in cash, down from $2.9 billion in 2023. Nippon Steel has promised to invest $2.7 billion in US Steel’s Gary, Indiana and the Mon Valley Steel works near Pittsburg, Pennsylvania. Without the investment, US Steel will continue to invest in newer electric Arc furnaces at its Big River plant in Arkansas, rather than the blast furnaces.

Linking to dividend paying stocks, when a merger is announced, both parties have many vested interests in seeing the process through. In the case of US Steel, there was a competing offer from Cleveland-Cliffs at $7 billion, however it was well less than Nippon Steel $15 billion offer as well as the other issues Nippon Steel has said it will do if it succeeds. With all mergers, it is easier to say they will walk away or fold than to continue the battle to the end, because as the process goes forth, the executives who back the merger will certainly be let go if a competitor wins. Seeing who benefits and who loses is a good way to examine a merger. President Trump while at a meeting with the Japanese Prime Minister, said an investment not a takeover will happen.

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