The Big Score was written by Jacquie McNish, Doubleday, Toronto, 1998 and the names involved were Robert Friedland, Inco and the Voisey Bay nickel find . The basis of the book is a penny stock promoter who has a wonderful ability to hype the possibility of a big score, but under normal circumstances is nowhere close to getting it, however by luck is involved with the biggest nickel discovery in the world. The other cast of characters include major nickel mine operators one has held the number one spot for generations Inco and the other is the number two company (Falconbridge). There is an old Avis rent-a-care slogan called we are # 2, we try harder. Rightfully or over time, the type of individual who gets involved with different companies includes their personalities linking to the companies. The market leader, in this case, Inco, tends to be a very distinct image of who gets to be the President and what associations or clubs they tend to go to. From an outsider viewpoint, this typically means the market leader has greater access to decision makers or is seemingly very stable in their earnings – the question is not if they are profitable, but how much? The second company, in this case, Falconbridge, are seemingly nicer people, but to get the same respect as the first one, they have to be more profitable or have greater production or seemingly take on greater risk to match the number one company. The stock promoter has a function but is generally seen as the running into the grey areas of the law on a regular basis.

Linking to dividend paying stocks, while the stock promoter offers the greatest upside potential, the more likelihood of losing money, unless you are an insider, should be consider normal. From an investor point of view, the styles of management of the first and second company will be different, however both will tend to be profitable and it depends on how you like senior management of the companies. Every profitable companies go through cycles, in the case of these two mining companies, they both owned low cost mines, but Falconbridge owned more around the world and Inco’s costs were beginning to increase. When the reality set in with management of the top company, cheques books are open for business and acquisitions, till they settle into the normal habits of the top company.

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

The Big Score is about the discovery of a very large commercial mine in Newfoundland. Canada. The story is also about a penny stock promoter who founded the mine or staked the grounds where the ore was and is been mined. The other part of the story is the large profitable operator of mines, because finding a mine and operating a mine are two different things and no penny stock promoter wants to operate. The Big Score was written by Jacquie McNish, Doubleday, Toronto, 1998 and the names involved were Robert Friedland, Inco and Voisey Bay. At present Mr. Friedland is still involved with trying to find mines, Inco is owned by Vale and the ore at Voisey Bay is being mined.

The Big Score has many lessons for investors – one is it is very rare, but every once in a while the penny stock promoters are correct. The reason is although the large mining companies have every advantage, you never quite know what is under the earth until you drill. How the earth was formed is still a mystery and many theories are needed to discover what’s under the earth and if there are minerals in existence that justifies a mine. In most cases the answer is no. There maybe gold in many hills but not enough to mine unless your costs are very low or almost nothing. What is good for an individual is not that good for large companies.

Another lesson for dividend providing companies is in the case of Inco, they were operating under many myths. At one time Inco held over 90% of the market for nickel, they were a low cost provider and were very profitable. The profitability was decreasing as was their market share, the only thing increasing was their costs. One of their strategies was to buy and sell including taking delivery on the commodities market or being the middle man and still making money. The good thing was as when their customers demanded more nickel, the company took more deliveries, when their customers wanted less, Inco took fewer deliveries. To the casual viewer from the outside, Inco looked like it was still a market leader, when it reality it was quickly losing market share. It is important to separate myth from reality when buying your investments. Whatever the reasons why you wanted to own the company besides it pays a dividend, are the beginning of the questions you will want to ask to ensure what you believe is actually true.

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

What happened after WW II is an interesting book by Tom Bower called the Paperclip Conspiracy, published by Michael Joseph Ltd. London, UK, 1987. The war is over and as in tradition, the winners divide the riches of the defeated land. Fortunately in our society most of the wars are economic and it is companies getting bought and sold. Everyday it happens, although many times they are friendly takeovers, there are many unfriendly but usually no one dies. Companies get restructured, buy outs happen, the cost of the takeover goes up, communities are affected but generally no one dies. After WW II, the leaders of Russia, US and England had a great desire to ensure the new Germany would not be as powerful as it was before the war. Before the war, Germany had a  strong infrastructure, access to raw materials and a history of craftsmanship. Their schools, training, and precision engineering were all better than the rest of world. You likely have read or heard ads about their cars – BMW, Audi, VW, other countries make cars but German cars engineering is consider the best. When the war ended, Germany was bombed, there were a million things to do to bring life back to what is considered normal, within what was going on, including ensuring millions of people had something to eat, live and have clothing. At the same time countries moved manufacturing machines, files and scientists and their families to U, Russia, France and England. Each country had strengths in different industries and wanted to strengthen their industry and keep Germany’s industries in a weakened state. In Mr. Bower’s book he describes rocket engineering, tanks and fighter planes. Three critical components of fighting a war and the Germans were years ahead of the other countries in their technology. Russian MIGs planes were better than Americans for years, until the Americans caught up, the MiG were based on German engineering which the Russians took from the Germany when the war was over.

Linking to dividend paying stocks, to the victors goes the spoils, but what spoils are important? In the case of the breakup of Germany, Russia took a great deal because the other sides did not realize how good Germany was and were not that interested as they were focused on the other million things. Russia took control over a piece of land which contained many factories, the other countries wanted the resources to pay the debts, because of the war.The leaders in war, were not the best leaders in peace time. The transition from war to market economy was not something the leaders adapted to well. All dividend paying companies need to have people trying to determine how to gain resources from those companies that are the competition. All companies go through cycles and when companies have to much debt, good assets are available if you know what you are looking for. Dividend paying companies have the ability to look to the future, to weather the cycles and still be profitable and are in a position to pick up desirable assets at low prices from the competition. To do so takes homework, planning and patience.

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

What happened after WW II is an interesting book by Tom Bower called the Paperclip Conspiracy, published by Michael Joseph Ltd. London, UK, 1987. The war is over and as in tradition, the winners divide the riches of the defeated land. For generations, the rulers would go to war against a opponent who had gold in the hills, to pay for the debts back at home and to expand the empire. WW II was a little different in that the method to the war, was who had the better machines? If you are a movie fan and think about Braveheart – Mel Gibson’s movie about Scotland, the people were motivated by passion for their lands, once they withstood the arrows (new improvement at that time) much of the battle was hand to hand. At the end of the “working” day everyone went back to camp, pick up the dead and wounded to try again the next day till someone lost. If you think about the Terminator movies – there is a line in the movie where one of the scientist says to the effect ” we found the arm of the terminator and learned vast amounts from it, so technology could do more for man.”  According to Mr. Bower, Germany had spent and was spending vast money on research and development and all their tanks, planes and rockets were years ahead of the British and US. For a other reasons, Germany lost the war, but had it gone longer, maybe a different result would have been the outcome. The vast amounts of research and development by Germany’s scientists was a treasure trove of information. Not surprising, after the War was ended, the leaders of US, Russia and England being focused on winning the war, were not that interested in the research and development; but there were agencies and private companies that could see how advanced the Germans were. The Paperclip Conspiracy is about those that did see and moved the files, the machines. and the people out of Germany to work in the agency and companies in US, England, France  and Russia.

One of the ethical concerns about war is the scientists, some maybe ardent supporters of the government in charge; some are just looking for ways to improve things, some are aware of conditions around them, some are not. How do you tell? if the development is further ahead than your own scientists have given you, much of the information is in the person’s brain, therefore you need the person even though before the end of the war they were the opposition. Given the scientists wish to continue to develop their ideas, do you want them on your side? In the book there are examples of after WW II, one of the reasons for the rise of Russia and the Cold War was the decision by the Russian government to spend great amounts of money on arming their country using German technology which they acquired. In addition, some of the key people who helped the US put a man on the moon were Germans scientists.

Linking to dividend paying stocks, as a profitable company, the company has the ability to do takeovers to improve its position in the market as well as to expand and diversity its reach to continue to be profitable. More and more takeovers are about gaining brain power or ideas, people come with baggage? some you can live with, some you do not want but want their ideas? what should the company do? 99% of large companies have skeletons in their closet, it is extremely hard not to. Every large organization can do a great deal of good, as well as some of its products are used for harm, it is part and parcel of the organization. How the company handles it, is called its public reputation.

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

Donald Rumsfeld has a wide variety of senior level jobs in his life time including elected government official, CEO of a couple of US Corporations, and Secretary of Defense. For most of his life he has been keeping rules or lists of leadership lessons in business, politics, war and life. Over the years because of his positions, many people have read the lists and it made into a book called Rumsfeld’s Rules by Donald Rumsfeld published by Broadside Books, NY, 2013. Many of the sayings you will likely have heard or read before, but the examples are from Mr. Rumsfeld and another one of the very good chapters is Lessons from the World’s Most Successful Leadership Organizations.

Everyone for many organizations people go and do their work, which Is great, but the focus is on the leadership of the organization. If the leadership is doing its job, the people below with make it work. Recently a tech company changed its leadership, which it needed to do, the focus on the business press was the one person, not the thousands he had let go to try to refocus the business. We focus on one person because it is the nature of the beast. The lessons to be learned include – in the armed forces thousands of people flow through the organization, the way the armed forces continue is the role of the chiefs in the Navy or the sergeants in the military. These people do not have senior rank, have long service, know the informal and formal rules of the road. If the organization respects them, the organization benefits.

In the military in terms of feedback, they have 360-degree-feedback – which means bosses continually giving feedback on the performance both positive and things to learn the next time. By doing it on a regular basis, good leadership skills are developed and engaged in future similar situations.

Nothing is static. For every offense there is a defense. For every defense there is an offense. Everyone is engage in competition, what is the competition doing? What do they do right? wrong? and how can the organization learn from them?

When your enemy is making mistakes, do not stop him in the middle. Studying your competition can mean the difference between success and failure by providing advance clues of their potential innovations that could disrupt your efforts. Studying your competition can also suggest new techniques that could benefit your company. Mr. Rumsfeld was on the Board of Sears, they saw and studied Wal-Mart, however the Board decided not to act as they did not see the threat or need to change.

Linking to dividend producing stocks, by there existence of providing a dividend, these stocks are the profitable ones. There is and should be competition among the space, the long term dividend paying companies either have a very entrenched monopoly or are aware of the competition and within the organization continually trying to innovate. note the entrenched monopoly is fading fast for all organizations who do not watch, learn and act from the competition. A dividend producing company can take baby steps, make mistakes and still continue on making a profit? is it?

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

Donald Rumsfeld has a wide variety of senior level jobs in his life time including elected government official, CEO of a couple of US Corporations, and Secretary of Defense. For most of his life he has been keeping rules or lists of leadership lessons in business, politics, war and life. Over the years because of his positions, many people have read the lists and it made into a book called Rumsfeld’s Rules by Donald Rumsfeld published by Broadside Books, NY, 2013. Many of the sayings you will likely have heard or read before, but the examples are from Mr. Rumsfeld and one of the more interesting for this blog is about Think Strategically.

In many instances if you can get the strategy correct, you have accomplish more than 50% of the work for the tactics will fall into place naturally.

Step 1 is Set the Goals. Remember when you set goals, you have decided what you are not going to do, which is every bit as important as deciding what you will do. What do you say no to? The next thing to do is set your priorities and ask why?

Step 2 is Identify your Key Assumptions – note if a key assumption turns out to be wrong, it will require a major change in strategy. A question to ask is what do you expect the competition to do?

Step 3 is to Determine the Best Course of Action understanding there are always other alternatives – some better, some worse but there are alternatives. There are multiple ways to do this.

Step 4 is to Monitor Progress through Metrics – because what you measure improves. A great rule of thumb is you get what you inspect, not what you expect. One way to see how things are moving remember the adage the middle income  people vote with their feet or if they have a bad experience they will go to some where else. Upper income will voice their opinion more.

Linking to dividend paying stocks, every company has a strategy plan for public companies they are in the Annual Reports. As you have invested in the company, you can determine if their strategic plan is the correct one, given the things you know. What does the company say they are doing? and equally not doing? if they are not doing something do you like it? do you like the direction the company is going in?

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

If you wish to read a good book, the books of John Grishman’s books are well written and easy to read, the latest one read was The Racketeer published by Doulbeday, 2012. Without revealing the entire plot, if you ever seen the movie the Sting with Paul Newman and Rob Redford, you will have an idea of what is going on. Suffice to say, with every sting, you need seemingly credible  people, you need seed money, and institutional help. In order to look credible. In addition, there is something interesting which we all tend to forget – just about anything can be leased or rented for a short time. Part of the sting is to give the illusion of more wealth than actually exists which allows  for the person to let their normal guard down.

Linking to dividend stocks, if a company has paid dividends for a number of years there is little chance of a sting operation going on, for sting operations tend to be short term in nature. Additionally, through various sources you can determine if the dividend is sustainable or the company’s business plan makes sense to you and a host of others. Sticking to dividend producing companies means the companies are profitable, have low debt and can continue to pay their dividends for multiple years or the risk factor for you is low and the rewards are high. Leave the stings to fiction novels and movies and in real life enjoy the benefits of dividend producing companies.

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

A few days ago was Remembrance Day and for every country in the world, sooner or later some of its citizens will die in armed conflict. It is worth shutting down the markets for the day, because some things are more important than making money. As a North American, my bias in remembering WW I and II is for the Allied forces partly because relatives enlisted in the armed forces and some lost their lives. It is very important to remember the same words at the Remembrance Day ceremonies are said for the other side’s Remembrance Day ceremony. That part seems to be missing while attending the ceremony. The leaders of the countries all made decisions which to them were the right thing to do and to achieve their ends used the propaganda machine to achieve the good will of the people they represent.

The propaganda machine is used on both sides, the latest and most outrageous one was the weapon of mass destruction, whatever that was suppose to be, but from a message selling point of view – it meant whatever you wanted it to be and was truly an effective message. In business war words are often used but the results do not kill people for they are customers and are needed. Wars represented different problems – if you are a manufacturer you want to diversify your portfolio and ship to all the countries who desire your product. Some of the countries at one time or another are not friends of your host country. Do you ship? do you continue with the profitable business? if you have no particular concern with the country, do you find ways around it? at what stage do you go back into the country? seemingly easy answers become hard ones.

Linking to dividend providing stocks, unless the company has a monopoly or monopoly like position in a region, you will want to ensure there is consistent and profitable diversification where the company earns its money. Diversification has many good roles to play, as you move across country borders, there are simple questions to ask about friends and enemies and how the roles sometimes switch for little good reasons and the best methods to act in those situations.

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

We all love music in one form or another and maybe you have read a book about your favourite singer. If you focus on the instruments invariably a piano is used . An interesting book about the history and the companies which made pianos is called The Piano Makers by David Wainwright, Hutchinson of London, UK, 1975. The book focuses on piano making in England and part of the book is how to sell the merchandise. For a long time the institution user included the church and if you drive into the countryside you will see many churches. In the area where the author lives, the church was given land or the cost was zero. Given the rural nature, when the church was built the neighbours came together to build the church for free and then the church was the social hub of the community, some also came for the religious services. In each church there is an organ or music and this is the natural customer base for piano makers. As time goes on, people entertained in their homes and at even now days at most parties there is some music being played, whether live or on the radio. The music always sounds better if someone can play live. Given the above what choice of piano do people make? The same as it is today, the influence makers helped make decisions. The influence makers were the gifted musicians who toured, but what the audience may not have known was the piano was donated for the tour by the manufacturer. The manufacturer also built concert halls which featured their instruments being played translating into the captive audience would hear and see their piano and be influenced to buy one. If you do not know how to play, the manufacturers teamed up with educators or someone to teach you to play for to play the piano. In order to play the piano, you must practice and it is easier to practice if you own a piano. Many of the branding and marketing methods you see in a variety of consumer goods you can see  with the piano.

Linking to dividend paying stocks, most piano companies have over the years stayed in private hands, the business end is in the public and needs goodwill of the public to continue. The cycle of taking lessons, buying the piano, going to concert halls and maybe updating in the future are linked to the continue prosperity of the manufacturer. The other activities pay dividends to the manufacturer and for all industries a cycle is needed to ensure each generation continues to use their product. Over each generation many challenges will happen, whether they are dealing with wars, natural disasters, conflict between partners or craftsmen and the general economic cycle to name a few. The art of staying profitable, staying in business and continuing in business is something to celebrate and that is why receiving a dividend is a great tune.

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