The Bully of Bentonville is the largest retailer in the world – Wal-Mart and is from the book of the same name written by Anthony Bianco, Doubleday, NY, 2006. Wal-Mart has changed the face of retailing for good or bad, depending on your point of view. From an investment point of view, Wal-Mart has produced outstanding returns, continues to produce those returns and has made the Walton family billionaires many times over. Wal-Mart is headquartered in Bentonville, Arkansas and its retailing focus from the time it started was on smaller towns and cities where there is plenty of money to be made. Companies such as Sears made their focus on the suburbs of American cities and left the downtowns and smaller cities to other competitors. Retailing by its nature is a very competitive area to be in. People make stuff and it needs to be sold somewhere, and the economy of the US is very dependent on people wanting to buy stuff. Wal-Mart has developed some of the best information systems to go along with its ability to deliver everyday low prices on a base of goods needed by the average household. Once somebody gets into the store, they find other items which have higher mark ups. In the global economy, there is always someone willing to deliver goods at a lower cost to the retailer, which is why many of the goods come from China or elsewhere. That is good news if your income is not dependent of providing increasingly lower prices, which is why many manufacturers have left the US. If you income is not dependant, then Wal-Mart saves you money.

Similar to many companies, Wal-Mart which is one of the largest private sector employers has been the active user of municipal, state and federal dollars to build new stores, for training purposes, but starts its employees at minimum wages or slightly average. There maybe opportunities to move upwards, buy shares in the company and other features but given the high turnover of staff, in the book it was running at greater than 50%, most employees see benefits in leaving before the year is done. Perhaps it is because of the retailing work hours and environment, perhaps it is to other companies paying more, whatever it is, the number is expensive given the size of the company.

Linking to dividend paying stocks, since 2003 Wal-Mart has paid a dividend and has consistently raised the dividend and expectation is to do so for the future. As an investor, Wal-Mart is a company worth owning the shares. Wal-Mart has the best distribution network, analysis on consumer wants and needs, and stable market share in the retail world and is a very tough competitor in a very competitive landscape. As a leader in the retail environment besides everyday low-prices, Wal-Mart has the ability if wanted to change how retailing is done from production, packaging to point of sale, understanding in the consumer economy the greatest competition is to be found in the retail world.

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

The title refers to one of the final four remaining teams in the playoffs of the NFL and similar to most sport franchise there are teams that seem to make it into the playoffs with a legitimate chance to win the cup every year. The team the author likes made it to the playoffs but was defeated. In the case of New England, what is remarkable is they were in the final four even though some of their top performers have been or are injured and not playing. When the coach eventually retires he will go into the Hall of Fame with an outstanding win/loss ratio. It could be easily argued that Bill Belichick is a great coach because his teams that made it to the final four, and into the championship game, player personal changed considerably from year to year. One would think a need for a quality core number of people who worked together to form a great team and new people to the team would see from the example the veterans bring to the team and the new people would fit in. In football there are 53 people that suit up for a game, in New England’s case this year 25 of those players that were not on the team last year including 15 first year players. In theory, all the other teams had a opportunity to look at the those players, but when they arrived in New England, they performed better than expected. Perhaps it is the flexibility of the system New England uses, whatever Coach Belichick does, the system he uses elevates all the players as soon as they play for the team. (New England lost to Denver but you can be assured they will be back again next year).

Linking to dividend paying stocks, in the face of the increasing competition where more and more people and companies have access to similar information to be a consistent winner is something to celebrate. Although each team is different, in terms of culture and expectations, the consistency of having a winning season such as New England is a joy to watch and learn from. When you find a stock which is consistently paying dividends or making profits for its shareholders that is something to celebrate. Both for the management and the employees who every year start fresh and produce consistently good returns.

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

When you enter you home the first thing you see is the front hallway, in the author’s case the colour has not changed in a number of years. There was no particular reason to change, except once a year there is a desire to paint something. If you were to paint your hallway – there is a great deal of choices in terms of paint colours and one time I brought a picture and asked for a colour. To narrow down the colour will take some time and consideration – depending on the size of your job the paint stores have software where you can preview your colours just to make sure. Having decided the colour – the next aspect is the preparation to paint – stuff has to be removed from the walls, floor boards need to be taken off to be painted (perhaps a different colour), the wall may need sanding to smooth it over, the green tape has to be put on the wall to keep the paint in between the lines and the newspapers are put on the floor. None of this is hard, but if you do not do it, the telltale sales are easily found. The colour of the paint is put on the wall and it feels good. You wanted a change and produced a change and now you need to live with it unless a desire to paint a different colour.

Linking to dividend paying stocks, the new colour which you wanted gives you a satisfaction each time you enter the house, similar each time a dividend paying stock pays the dividend there is satisfaction in your bank account or brokerage account. Over the years the colour continues to give you satisfaction and depending on the colour it could even be considered fashionable to have. However before you put paint on the brush, you did homework, similar before you bought the stock you did your homework and as your choose well, the results over the long term will be an increase in your net worth.

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

The title refers to a book about small towns within a couple of hours drive from where the author lives. Over the years many of the towns have been visited and it was good to read about their early years. All the towns grew up in a similar fashion with people either having a land grant or someone buying the land and the need to improve it. Over the years the towns made the tranformation from rural needs to a service economy with government services providing the stablizing base.

Linking to dividend providing stocks the same consistently sustaining activities which keep small towns viable are necessary to look for with stocks. Many towns have made changes over the years often times there was a fire, economic changes, people change and the town keeps going. With your stock there will be changes, but if there is consistent sustainability it is worth the investment.

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

If you like a good mystery book – The Inquisitor’s Key by Jon Jefferson and Dr. Bill Bass, HarperCollins, NY, 2012 is a good read. The book’s main character is a forensic anthropologist who helps both the police and others identify people. The book is set in Avignon, France and to give reference to what they are doing many descriptions are given. It is important to note Avignon, was the Pope’s Palaces before they lived moved to Rome. Thus the book has religious inquiries, the art world, and secrets that some want to discover and others really do not want to be let out.

Linking to dividend paying stocks, similar to a mystery novel in order to find out who did it? research needs to be done or homework. Homework to be able to connect the dots and lead you to a variety of different paths and one path will have the best answer. Similarly in investing there are many methods to invest in, one tried and true method which is easier to do and consistently gives good returns is buying dividend paying stocks. If you start with the best dividend paying stocks, it helps make the selection of equals even easier. If you start with dividend paying stocks that have raised their dividends and have paid for greater than 10 years, whether the markets go up (even though that is what we want) or down, the dividends ensure a continuing payout and when markets do rise, dividend stock prices go up faster.

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

An old Star Wars movie was on TV over the holidays and the title of the book caught my eye. Fly Fishing with Darth Vader by Matt Labash, Simon and Schuster, NY, 2010 is about outsized and outrageous characters who dominate the airwaves. Mr. Labash finds comedy, humanity and some of the reasons we the general public half care about these characters. If you are a regular watcher of the show 60 Minutes many have been profiled because they are both different and interesting. Some of the people have run for either governor or President of the US and while they have a viewpoint, they do not have much electorate success, however it is important in the democratic system we have that they do run. The profiles of the people make us both cynical and thankful about the political results that often occur – most of the people who do get elected actually try to do a good job. It is generally not to hard to find those that enrich themselves even as they pretend to be involved with politics. The other stories in the book are stories about great American cities which have declined – Detroit and New Orleans, at least New Orleans had a better reason – the Hurricane, but in reality the city in general has been declining for years. Detroit is more interesting because people and jobs have moved to the suburbs, the infrastructure of the city still needs to be taken care. Detroit likely has the highest abandonment of homes, even before the fall in housing prices. The city has a problem – when a house is abandoned the city can not tear it down, so squatters move in, invariably a fire happens and then the house can be torn down. The process places a great deal of pressure of both fire and police departments.

Linking to dividend paying stocks, while reading Mr. Labash’s book it is very easy to cheer for and want to support the underdog. Some of the people have great public relations so we want to seemingly care for the underdog. The reality is the road to success is very long, the rewards are great but 99% will not succeed to the final elected position. The odds are both Detroit and New Orleans, as much as something should be done, it is a very long term solution. A short term solution is to go with proven winners, who have an easier time to succeed and chances are higher they will. In terms of your investing, over the long term if you stay with proven winners or stocks which pay dividends, year over year you will do better than investing in the underdogs. If you want to invest in the underdogs, ensure the bulk of your investments are with companies that pay dividends, and a small percentage goes to underdogs. The ride is sometimes more exciting but it is often results in owning shares that cost you more than the market value. For the reverse situation let the dividend help you own shares with greater market value than the cost of buying.

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

Alpha Dogs is a book written by Donna Fenm published by Collins, New York, 2005. If you know the publication Inc, the magazine for small and medium sizes business, Ms. Fenn writes at the magazine. The chapter headings are Seduce your customers; Convert your employees into true believers; Transform with technology; Stake a hometown claim; Innovate the mundane; Market your brand; Build a village; and Embrace reinvention. You will need to do all of them.

Embrace Reinvention – in some businesses, it seems the products sell themselves and you seemingly just have to open the doors and the business walks in. Over time something will change, the people, the environment, the reason why people originally rushed into the doors. This is an opportunity to reinvent the business, for there are still people desiring the product and things can change. The example in the book is Mike’s Famous Harley Davidson located in New Castle, Delaware. The product is Harley Davidson motorcycles which were very popular, then the brand went down, the company had to be sold and reinvented, now is doing very well. To ride the new wave, Mike Schwartz saw what could happen and bought the dealership and changed it. First he had a dream of adding things that would attract families such as a restaurant and motorcycle museum to have people drop into the site, and some may or may not buy a motorcycle. Fortunately he learned about selling motorcycles and including the famous as famous service. It took a number of months to years to learn what was important and what was not. The restaurant had focused on what Mike likes, it was changed to a good basic roadhouse menu which make money. Mike saw the trend but to capitalize on the trend took good managers who could complement Mike and give discipline to the business.

In summary, to be successful in business is hard work. Sometimes it seems easy for the business needs to be responsive, dynamic, take nothing for granted. The business has to be resilient and sustainable and refuses to accept that size is limiting. A lot can go wrong, but more things can go right if you stick to your core values of why you are in business in the first place.

Linking to dividend paying stocks, to continually make profits is a very good thing. Unless there is monopoly, and there are fewer and fewer of them, it takes good solid management to continue to make money. It takes good employees, training systems and a host of other things to keep customers coming back to your products and services. When you see good ones embrace them, learn from them and more importantly invest in them.

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

Alpha Dogs is a book written by Donna Fenm published by Collins, New York, 2005. If you know the publication Inc, the magazine for small and medium sizes business, Ms. Fenn writes at the magazine. The chapter headings are Seduce your customers; Convert your employees into true believers; Transform with technology; Stake a hometown claim; Innovate the mundane; Market your brand; Build a village; and Embrace reinvention. You will need to do all of them.

Market your brand – the reality is the smaller your company, the easier it is to market your brand. However as people deal with you and wish to continue, your brand will grow and at some point there will be a discussion about you and your brand integrity. The reason is as a small company you dealt with specialty stores and that appealed to a group of customers, as you grow you move up to the bigger box stores, you are now the big guy. The only method to stay authentic is to constantly remind yourself of your core values and make decisions within that context. It may take longer, it maybe harder to pull off, but remaining true to what your core values are, means the people who are attracted to your brand continue to buy and those who wish to work for you will stay with the company will stay longer. The example in the book is a bakery company called Dancing Deer. They started with the speciality stores, customers loved their cookies. People at the chain stores said, we would like to sell some items here. Dancing Deer found a solution that works – an exclusive product for the chain store. When they expanded, they could have gone to a nondescript factory in the suburbs but choose to stay within the roots in the city – they stayed in downtown Boston and moved to a renovated old fish processing plant. The owner, Trish Karter, noted a number of times it would have been easy to cut corners, but that would have compromised brand integrity and the company’s ability to differentiate itself in the future.

Build a Village – no one exists in business alone. It is easier if you have a large support system or network to help, encourage, send ideas, gain new business, work on projects, meet people. Every business belongs to more than one group – your industry group, the local business association – whether it is Chamber of Commerce or Board of Trade. Some of the times you belong to gain ideas, other times it is to find out who is a good person to do something which you are not particularly good at. During the recession many companies cut back on the number of people in the office, but work still needed to be done – it was contracted out. How do you get on the lists? fill out the request for proposals (RFP)? and everything else that needs to be done when you win the RFP? Your network helps you. The easiest and hardest method is choose your network carefully, set rules and be prepared to drop someone, even if you like them, if they break the rules (this is generally the hard part). In the book the example was a public relations group called PRConsultants Inc – an alliance of 34 independent public relations firms. They do there own thing on a regional basis, but when a client wants a bigger reach up to national or international, the firms work together to satisfy the clients. The tips include make sure everyone knows the rules of engagement from the outset. When dealing with a client one point of contact per vendor – the network co-ordinates.

Linking to dividend paying stocks, at this level it should be easy to see what kind of network the company has and how well it markets it brand. In North America with the cold temperatures, many dividend paying power companies had customers lose power. What did they do? what was their responses? No one planned for outages but good companies are good companies no matter the circumstances. If they performed badly, people will be looking for alternatives and there is always something in the marketplace.

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

Alpha Dogs is a book written by Donna Fenm published by Collins, New York, 2005. If you know the publication Inc, the magazine for small and medium sizes business, Ms. Fenn writes at the magazine. The chapter headings are Seduce your customers; Convert your employees into true believers; Transform with technology; Stake a hometown claim; Innovate the mundane; Market your brand; Build a village; and Embrace reinvention. You will need to do all of them – the first two chapters were outlined in part one.

The next chapters – Transform with technology includes using what is there for your advantages. At one time, this blog was written on a desktop, then a laptop and now can be done on a smart phone. The comfort maybe with the big screens, but to embrace technology is to see where it can lead you. One of the examples in the book is Auction Systems Auctioneers & Appraisers – the owner Deb Weidenhamer grew her business though technology which helped everyone – more bidders, possibly higher prices. Deb used ebay and videos before anyone else was doing it. It took time, some hurdles along the way, but she could she where technology could help and she tried. The important aspect with technology is to try a number of different things to engage your customers, to increase the number of customers and watch the early adapters.

The Stake a Hometown Claim is best if you believe local is better. In theory products come from around the globe, but you are local. Why someone wants to deal with you rather than someone else is part local – you live there. As a local you need to embrace what the locals do, and although everyone does similar things, there are variances in the local community.

Innovate the Mundane is a great example because Thor-lo makes sport socks. The reason the company is in the sports sock market because small businesses can not compete with the large companies in the commodity game. In all markets there are niche markets, they are small but the margins can be terrific. To do well you must serve it very well. The danger is everything can be commoditized within two years, which means you need to stay ahead of the copycats and not treat failure as a sin, but a learning experience. Innovations need to come from everyone – management, staff, customers – the trick is to try, if it works scale up and run with it. If it does not work, try something else.

Linking to dividend paying stocks, gaining ideas from Inc and the small and medium sized businesses is the place to go because they have to. Dividend paying companies try to stay in high margin, low risk ventures. The problem is nothing is static as it used to be, which means industries change, new ones emerge but there is a lag time and that is where dividend paying companies are vulnerable. The American economy is doing better, but it has taken 6 years to recover from 2008. As the economy recovers and gets better more ideas will be tried and work which makes the ability to continue to make profits easier. During the lag times, dividend paying companies learnt good lessons, they need to keep it up.

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