Every company does social media as that how to reach an audience. Every company has the same idea that reaching out to people will drive demand of their products and services. Given the spending on social media, every company hopes they are successful, but what happens when they are successful? Companies want demand, but not exceptional demand.

In an article by Amelia Nierenberg of the New York Times News Service, one of the oldest breweries in the world Guinness is having a wonderful problem. There is too much demand for their dark beer. Guinness was seen as an old-timer’s beer, but it has been a Gen Z darling thanks to a savvy marketing, celebrity endorsements and a viral drinking challenge.

The viral drinking challenge is called split the G, this entails drinking enough in one chug to leave the foam scything the first letter of the branded glasses.

Guinness was the top beer in Britain by volume sales in the year to November, according to CGA by NIQ hospitality data consultancy. From July to October, sales were up 21% while beer sales nationally were flat.

If you went into a British pub and there was no Guinness you could try some Irish alternatives, but for Irish pubs or themed pubs not having Guinness means it is not an authentic Irish pub.

Linking to dividend paying stocks, every month and maybe day there are marketing campaigns to encourage people to spend money. It is wonderful if the campaign works, however if it works exceptionally well and there is a shortage of products, people look for alternatives. Once they have tried the alternatives, they may or may not go back. Every day as an investor you read about software programs using AI to help manage inventory and the supply system, there is limited reasons for shortages.

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

If you only followed the Nippon Steel company acquisition of US Steel you would see and hear politicians decry the lost of the ownership of the domestic steel industry. The cry would be that Nippon Steel should not be able to buy US Steel because ….. and both President Biden and President-elect Trump have agreed with no purchase. You may think that there is no industry that is ok for Japanese companies to buy. You would be wrong.

In an article by Anton Bridge of Reuters, Nippon Life Insurance is in the final stages of buying Resolution Life Holdings Inc. The deal is worth $8.2 billion and is the largest ever foreign acquisition by a Japanese insurer.

Nippon Life would purchase the shares it does not own from Blackstone Group LP and others and make Resolution Life a wholly owned subsidiary in the second half of 2025. The insurer would pay for the shares with cash in hand.

The desire for the deal is to buy growth as the Japanese market is shrinking and the population is aging.

This is the second purchase of an insurance company, Nippon Life paid $3.8 billion for a 20% share in Cambridge Financial.

In other insurance companies news, property and casualty insurer Tokio Marine Holdings bought specialty insurer HCC Insurance of $7.5 billion in 2015; in 2011 bought Delphi Financial and in 2008 bought Philadelphia Consolidated for $4.7 billion.

Resolution Insurance based in Bermuda is a closed-book insurer that purchases existing insurance policies from insurers in the US and other countries. Nippon Life has owned a 23% stake in the firm from 2019 with a purchase of $1.68 billion.

Linking to dividend paying stocks, in all industries there are international competition but in some markets particularly financial as long as the largest players are domestically controlled, there is plenty of acquisitions that can happen without the political input. With your investments for companies that compete globally, but based in the US how does the government help or protect the interests of the company?

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

All industries have associations both domestically and internationally, these associations examine the macro approach to the industry. Most of the time there is a positive spin because they are designed to be optimistic if certain conditions apply. However somewhere in the reports are the overall trends or outlook for the industry. It is helpful as an investor you examine the trends in the industry to keep abreast of the outlook and how often the associations update the outlooks.

In an article by Emma Farge and Joanna Plucinska of Reuters, global airlines body International Air Transport Association (IATA) forecast industry-wide 2025 revenue at more than $1 trillion and record passenger numbers. Chief of the IATA Willie Walsh said there were some difficult headwinds such as supply chain problems.

Both Boeing and Airbus are behind in delivering more fuel efficient planes. Engine makers had a series of setbacks, however the aerospace industry says it will gradually return to normal but not before the summer of 2025.

The net profit for the industry is expected to be $36.6 billion up from $31.5 billion in 2024, with a record 5.2 billion passengers flying. (in comparison the airlines lost $140 billion during the pandemic in 2020.

Which airlines will make the money is why the investor needs to do their homework.

Linking to dividend paying stocks, everyone is trying to pick the next great stock, but in the long run buying profit companies which can pay dividends but helps protect you and can make you wealthier. Start with the big picture or the macro and move down to the micro by sticking to best in breed companies.

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

Most politicians love simple slogans and with them people can form an opinion of what that means. Often the slogan is something that embraces the candidate for he or she has a track record connected to the slogan. Political slogans such as change or moving forward to the future imply the other party wants to keep things the way they are or is not looking forward to the future. And very often the implications have bearing in truth. The President-elect slogan is Make America Great Again and he seems to want to go back to a time when manufacturing jobs were unionized and there was an abundance of them in the US. The big problem his party has encouraged business not to be unionized and given the high cost of labor, the supply chains have moved operations to lower cost labor areas of the world. Similar to lower prices, there is always a lower price somewhere and somewhere in the world there are always lower labor costs. As long the infrastructure can move the goods along, those countries are competing for low wage manufacturing jobs.

In an article by Keith Bradsher of New York Times News Service, while President-elect Trump wants to impose tariffs on countries similar to China, the country of China is suggesting it will impose restrictions on products going to the US. Beijing’s decision to order a trade embargo on the export of 4 critical minerals to the US. The concern is a provision extending the ban to companies in other countries that transfer minerals to US firms after acquiring them from China. This is called the transshipment on exports.

The ban threatens to divide global supply chains by forcing companies to choose where products with certain materials and components can be supplied only to the US market or only to the Chinese market.

On December 3, the same day the Ministry of Commerce published the ban, 4 government linked trade associations directed companies to avoid buying American computer chips. 2 days later, the Ministry of Finance unveiled a draft plan to overhaul the bidding on government contracts, heavily favoring companies that product in China. (Former White House advisor on economic issues Stephen Moore said recently the US could impose tariffs at the same time as offering incentives to American companies to do more manufacturing in the US, although President-elect Trump has said nothing about the idea, he only wants tariffs)

Governments have a right to impose tariffs if they want to, however when it is your top trading partners, the other countries have a right to do something that will hurt the US in the short term. Similar to most things in life, they are not as simple as a slogan, unless the government wants to subsidize parts of the economy. Right now there are desires to cut the budget, not subsidize.

Linking to dividend paying stocks, some of these companies are the large heavy weight companies that have made and benefited from the existing supply chains. To change it may mean less profits, which means they will lobby to ensure their company is left alone to do its thing. As you examine your investments how does the supply system work?

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

Every business is regulated by an agency or department, sometimes companies love the regulations because it can keep competition out or at bay. Sometimes companies hate the regulations because it limits what they can do or want to do. However, most companies accept whoever is in power because there are limits to what they can do about it. In the financial world who the Fed Chair is important because banks loan out money hopefully at low rates and charge higher rates to customers and the difference is the spread. Ideally it is always in the banks favor.

In an article from Reuters, President-elect Trump had an interview with NBC News’ Meet the Press with Kristen Welker. It was a wide ranging interview and one of the many questions Mr. Trump was asked was will he ask Jerome Powell to step down to appoint someone else? Within the agencies and boards that report to government, there are some appointments that carry longer than 4 years, some as much as 10 years, with the idea they need to be apolitical or make the best decisions possible without political considerations. Although the results are political, the decisions are not supposed to be. In the case of Fed, no politician wants higher interest rates, they like low ones. However, in the struggle to keep the economy moving in the correct direction – interest rates go up and down.

Fighting with the Fed Chair, will score some political points, however the financial community will not like it and bondholders will not like it and they vote with their bond positions on a daily basis. In addition, Mr. Powell is a former private-executive and a registered Republican, which means Mr. Trump would be fighting against his supporters.

Linking to dividend paying stocks, there are many variables in investing and not liking someone is a short term reason, however through compound interest real money is made with the advantage of time. Sometimes you need a disrupter and sometimes you do not, it tends to be a balancing act particularly on the level of profits and ability to pay dividends. All companies are affected by government, but most want a long-term good relationship with the government.

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

Every day on the calendar is called something and most are days for a very select group of people. Their organization has petitioned the government to name a day for them and the government does because it creates goodwill. The organization is happy with the result and all is good in the world. Some days happen because of where they are in calendar year. Thanksgiving is one of the busiest times people see their families, which allows Christmas to travel less or somewhere else. After spending time together on Thursday, people went shopping on Friday for an outing. The malls always need a reason to sell merchandise helped with discounts for Christmas shopping and Black Friday was born.

In an article from Reuters, from an investor point of view, it is not whether a day is named after something or someone it is does it increase sales? It turns out yes they do. Americans spent roughly $10.8 billion online on Black Friday up 10.2% from last year. On Cyber Monday, they spent another $13.3 billion up 7.3% from 2023, according to Adobe.

According to data firm Facteus, which tracks online and instore spending in the US analyzing data from banks, credit unions, payment processors and fintech companies. Amazon increased sales 6% from a year ago. Walmart was up 3% while Target and Best Buy saw declines.

The top performers China based Temu and Shein.

Linking to dividend paying stocks, as an investor is important to have some cynicism in you – while you hope for the best, you want to see results. There are many organizations that can give you results to see how your company executed their strategies, you need to ask did they? If they did and you are relatively happy, then keep on holding the company. If things are not as good, one of the aspects is looking at alternatives.

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

If you were to ask a typical person about the auto industry, they would likely talk about Detroit and the car companies that led manufacturing for decades of Ford, GM and Chrysler. For a long time, the center of autos was Detroit. However, other countries have their versions because autos are made around the world. One city is Turin, Italy.

In an article by Eric Reguly of the Globe and Mail, Fiat’s Mirafiori factory in Turin, Italy produced over 30 million vehicles turning Fiat into a global brand.

In its heyday, the plant made over 1 million vehicles a year, and had 60,000 employees. They worked in a city within a city, think of the Rouge plant of Ford. Today, the plant employs 10,000 people.

Not so many decades ago, Mirafiori represented the industrial might and engineering savvy of Italy, which is the 2nd largest manufacturing power of Europe. The site covers 500 acres and all the features of automobile design, manufacturing operations and testing the new cars.

In 2004, then Fiat President took over a nearly bankrupt Fiat and reduced the number of platforms of vehicles from 19 to 6 by 2012. Car development times were cut in half. New models were rolled out and market share rose to 33%. Fiat was ambitious and profitable bought Chrysler.

A few years later, Fiat Chrysler merged with PSA Group of France which made the Peugeot. The parent company changed its name to Stellantis.

The company made money in the pandemic and stock prices increased. Now things are much tougher as market share has fallen in the US from 14% to 8%. What will the company do?

Linking to dividend paying stocks, for a long time Fiat was the powerhouse in Italy and all was good for everyone. Then sales fell, the company was restructured, did well and is not doing as well. For every company, you can be a fan or believer in the products but as an investor profits matter. When profits are low, as much as you like the company ensure you are viewing alternatives.

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

We all depend on food to eat and other the years some very large agriculture companies have emerged in the world of agriculture commodities world. The big four companies are ADM or Archer-Daniels Midland, Bunge (based in Paris), Glencore (based in Switzerland) and Cargill. All these companies have their roots in the grain trade and if you ever drive across the wheat belt you will see their names on elevators where farmers bring their grain to be sold around the world. The companies are vertically integrated and diversified into countries around the world.

In an article by Kate Helmore of Reuters, Cargill one of the world’s largest private companies is looking to slash costs as prices for corns and soybean hits four-year record lows. the company’s revenue dropped to $160 billion for the 2024 fiscal year, down from $177 billion in 2023. Less than 1/3 of its businesses met their earnings goal in the last fiscal year.

The focus of the layoffs is at the managerial level – to streamline the organizational structure by removing layers, expanding the scope and responsibilities of our managers and reducing duplication of work, noted Brian Sikes, Cargill’s President and CEO.

Linking to dividend paying stocks, all companies have to watch costs in their companies. It does not matter how much revenues are brought in, examining costs is a yearly expectation. In theory as a private company, it is easier to cut costs, but you are dealing with people and dealing with people you know is a tough decision. As a public company, from an outsider’s perspective it is easier to get buyin for cuts, as analysts will offer suggestions that can be done. Expect all your investments to have cuts and whether commodity prices are up or down, cutting costs is part of the business.

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

Later this month, the President elect will become President, and corporate America is looking forward to it. One of the groups particularly optimistic is the M & A industry from investment bankers to law firms to consultants. The present Biden administration has put more regulatory or guidelines before they would approve deals. The optimism is it will be easier for deals that are announced to go forward and be done.

If you are a long-term shareholder, somewhere along the line the company has made mergers, so great, some good and some terrible. Determining which is which is a hard process except when looking backwards.

In an opinion article, Robert Tattersall of the Saxon funds reviewed the new book The M & A Failure Trap: Why most mergers fail and how the few succeed. The book is written by professors Baruch Lev and Feng Gu.

Their process was to create a database of 40,000 M&A transactions from 1980 to 2022. Then they isolated 42 variables which might have an impact and did a regression analysis to which of them had any predictive value.

The authors came up with a success as defined by achieves above industry-average growth, a positive stock price return and no goodwill write-off all during the 3-year period after the date of the transaction. The authors found 75% of the transactions failed to meet expectations.

The authors started with 42 variables and brought them to 10. If you want details read the book.

The 10 are:

1. Deal size – negative and increasingly so as the size grows.
2. Buyer’s goodwill growth as a result of the transaction – less than 5% is neutral, more negative
3. Conglomerate merger – same industry is neutral, different negative
4. Hight stock percentage in acquisition payment – more than 80% is negative
5. Foreign target – domestic is neutral, foreign is negative
6. Buyer’s long term debt growth – the more debt growth, the more negative
7. Change in buyer’s return on assets over previous 3 years – could be positive or negative
8. Buyer’s market-to-book ratio – higher is better
9. S&P 500 change over previous 12 months – it is better to buy after a decline
10. Number of buyer’s acquisitions over 5 years – prior experience at integration is good

Linking to dividend paying stocks, companies that are profitable can both grow internally and externally through M&A. The ability to finance is easier when the company is profitable and sometimes shareholders hope their is a M&A to increase the value of the shares. However if 75% of M&A do not work, perhaps if your investments are involved in one, you might want to look at alternatives.

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