As an equity investor you need to invest in the stock market and along the way some of the best investment dealers will offer you advice of what to buy. They would love a continuing big piece of your investment dollars and for you to trade on a regular basis. This is where if you are a trader or long-term investor comes into being. If you are a trader, the more trades you make and the larger you pool of capital is, the better Wall Street likes you. If you are a long-term investor and tend to hold, Wall Street needs to nudge you to do more. While often we think of Madison Avenue advertising firms selling you consumer goods, the same people help sell investments. For many good reasons we have seen the rise of ETFs and that is a good thing for investors.

In an article by Suzanne McGee of Reuters, the marketing geniuses of Wall Street are working overtime to create exchange-traded funds (ETF) focused on artificial intelligence as asset managers offer new ways to tap in to the market enthusiasm for AI.

According to data from Morningstar, more than 1/3 of the 2 dozen ETFs that include artificial intelligence or AI in their name have been launched in 2024.

The AI ETF group now has assets of $4.5 billion; nuclear power ETFs have $5.5 billion and cannabis has $1.37 billion.

Linking to dividend paying stocks, as an investor you have to remember that Wall Street offers good returns for your investments, it is also one of the best marketing machines in the business world. There tends to be the ying-yang of Wall Street. At some point you will decide what you want to be a long-term investor or trader, there will always be room for both.

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

If you think about the 20th Century, for the longest period of time, the nation with the most power has been the United States. With the rise of China first as a manufacturing center and now as a service economy, power dynamics in the world are changing. In the past, the United States government could highly influence the direction of the world, and it would be foolish for any country not to think it still can. But other countries are moving up and challenging the US and some are successful, and some are not. The changing power dynamics means occasionally what seems to be a simple decision is more complex because the other country can take measures on their own.

In an article by Keith Bradsher of the New York Times News Service, to make advance computer chips some rare earth minerals are required. Some of them are found in China or controlled by Chinese companies. For example Shenghe Resources biggest shareholder is the Ministry of Land Resources.

The Chinese government has imposed restrictions on rare earth minerals that are either mined or refined in China. If you think about food grown by producer and traced to your table, the Chinese government passed a regulation that all exporters must provide authorities with detail, step-by-step tracings of how shipments of rare earth are used in Western supply chains. This gives China authority over which overseas companies receive scarce supplies.

China is taking greater corporate ownership over the mining and production of metals. 3 state-owned companies are taking over all the mining and production of rare earth minerals.

China has moved to control the supply chain of obscure chemical elements that are needed by semi-conductor manufacturers. The country restricted exports of antimony, gallium and germanium.

National security officials have tightened the flow of information about rare earth. They have labelled rare earth mining and refining as state secrets. The Ministry of State Security has arrested and sentenced people to leaking information to foreigners.

The White House released a statement that China had cornered the market for processing and refining of key critical minerals, leaving the US and our allies and partners vulnerable to supply chain shocks and undermining economic and national security.

The statement refers to the demand for Artificial Intelligence chips and who gets them and who does not.

Linking to dividend paying stocks, details are important. Politicians love to saw things that seem simple, but the reality is much more complex. If you invest in a profitable company, then it should be working with the government. The government will have its agenda, but often it fits nicely with the corporate agenda and as an investor you like that for seemingly the government has the company’s back. If that happens politics is working for you and the company.

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

If you live in an urban area, the reality is most people do not really think about how their food came to the place it is. Whether that is a restaurant or supermarket, if it is a restaurant we look at the menu and decide what we want to eat. If it a supermarket, we pick a variety of foods and put some of them together to eat. How they got there and why they are there is less of a concern that if is good to eat or do we want to eat it? A book called Food Routes by Robyn S Metcalf published by The MIT Press, Cambridge, Mas, 2019 does. The book examines the logistics of eating.

Ms. Metcalf works with a nonprofit called foodandcity.org to really search where and how our food arrives at our plate. In the food industry there are 4 very important ingredients – reliability, trust, adaptability and technology.

Reliability is requisite because consumers expect some degree of consistency in products they consume. A reliable supply chain allows for consistent pricing and quality.

Trust comes from experience. Food suppliers rely on the transit of assets and funds in exchange for products human consume.

Adaptability because failure to deliver food happens. Most of us use the global supply system, even if we do not know it, and there are friction points that cause the supply chain to halt, break, leak or misdirect our food. The most glaring example is Hurricane Helene in western North Carolina. How does the system adapt?

Technology includes AI to make it easier for consumers to track their food to ensure they trust it. Technology is the big ingredient that will drive our food system forward. This includes more greenhouse growing closer to the consumer.

Interesting facts

Shipping containers were invented by Malcom McLean in the 1950′ and 1960’s. There are 20 million shipping containers in the world and about 6 million are on cargo ships. Shipping containers transport 70% of what we eat every year and account for half of all seaborne cargo.

For war time logistics, the pentagon does it best – ensuring military personnel are fed on time and on budget. That includes mobile kitchens and tracking food shipments. The US military and the Colonels who run have been in the thick of logistics planning for decades. (the old saying armies run on supply chains, target the supply chains and the front lines do not get fed).

In any disaster in the US, FEMA depends on private and public assistance. On the private side, Wal-Mart and the big food companies have plans to ensure food and water are available as they use their incredible distribution networks. An example is Sysco partners with the Red Cross to plan food distribution through the Red Cross network. Sysco also sends in its mobile kitchens once the US Weather Service declares a hurricane watch.

Big data is used and in demand by every food company.

Linking to dividend paying stocks, behind the scenes in the food industry there are billions of dollars in the logistics to ensure the consumer buys again. Most of the time, the consumer does not worry about how the product came to the store, but it is at the right price for their budget. As an investor you should have an understanding of the logistics of the company to determine how well it works. If it works well, other things being equal the results will come in. Often times, one of the few areas the company can control costs is on the logistics side.

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

When you are investor, the ideal thing to invest in is a company which is profitable and growing. A company you can hold on for a number of years, if it does a stock split so much the better and overtime the value of the holding becomes larger or your wealth increases. That is the ideal but if you examine the top companies 30 years ago or 20 years ago or 10 years ago things will change. The change is the hard part because if you bought a profitable company and made money you will have an attachment to it – your read the financial reports, you read stories about the industry and you are thinking you have a winner in that group. However, names change over the years and some companies while still profitable are less profitable and you hope they can turn it around. We all do it, but the lesson is what did you miss over the years, before you bought an alternative.

In an article by Steve Lohr and Don Clark of the New York Times News Service, one of the names for the past 30 years was Intel. The computer chips that powered many computers was Intel and one of their advertising slogans was Intel inside.

In 2005, long before the Artificial Intelligence or AI was considered an investable technology, Intel’s Board of Directors was presented with a proposal to buy Nvidia. The price was about $20 billion. The proposal was eventually turned down because Intel had a poor job of absorbing companies and it would have been Intel’s most expensive acquisition.

Today Nvidia is worth over $3 trillion and Intel is worth about $100 billion. Will somebody buy Intel?

The story of how Intel got left behind in the AI is representative of the broader challenges the company now faces. There were opportunities missed, wayward decisions and poor execution. The trail of missteps was a byproduct of a corporate culture born of decades of success and high profits when Intel’s chips and Microsoft’s software were the twin engines of the fast-growing personal computer industry.

The culture was hard-driving and focused on its franchise in personal computers and later in data centers.

It was a corporate ethos that worked against the company as Intel tried and failed, repeatedly, to become a leader in chips for AI. Projects were created, pursued for years and shut down because Intel’s leadership lost patience or the technology fell short. Investments in newer chip designs invariably took a back seat to protecting and expanding the company’s money-spinning mainstay – generations of chips based on X86 architecture.

In terms of profits, it was a very good course of action, profits roll in.

Going back to Nvidia, Intel’s microprocessors chips excelled in rapidly executing calculations one after another, Nvidia’s chips delivered superior performance in graphics by breaking tasks up and spreading them across hundreds or thousands of processing working in parallel – an approach that would pay off in AI computing.

After the Board decided not to buy Nvidia, Intel worked on a project called Larrabee effort. They spent millions of dollars to be better at graphics than Nvidia. Larrabee was a hybrid, combining graphics with Intel’s PC-style chip design. The chip was not that good and did not meet expectations, after spending millions and every quarter falling behind, the project was cancelled in 2009. Nvidia became a leader in graphics and now the AI revolution.

Linking to dividend paying stocks, profits are wonderful to an investor. Profits in one area will eventually lead to a decline. If you think about a company similar to P&G, they have multiple brands making billions of dollars or are diversified. If the company you invest in is making most of its profits in one area, enjoy it, but be aware that at some point there will be a change and they will make less or grow less.

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

All CEOs report to the Board of Directors and ideally the CEO and Board of Directors work together to implement the plans of the CEO. The Board is to provide direction on policy and discuss who the next leaders are because even though it seems some companies go run on autopilot, they do not. When a company makes a profit and things are going well, the Board of Directors are not in the limelight, however when the company loses money who is on the Board is very important. Are members of the Board providing good governance? are they asking questions? or are they seemingly going along with the CEO and picking up their compensation packages? When there is a boardroom fight the issues come to light.

In an article by Dawn Chmielewski of Reuters, Disney announced the James Gorman with become Chair of the Board. Mr. Gorman was formerly the CEO of Wall Street investment firm Morgan Stanley and did a terrific job. (my bias is I own share in the company). Recently he changed the structure of the company through acquisitions to become a wealth-management powerhouse as well as investment bank. Often times when a new CEO comes into being, some of those who were considered successors leave the company to take leadership positions at other companies. Morgan Stanley has kept the 3 names that were considered as leading candidates, which is a rare thing.

The past history of Disney is Bob Iger was CEO for a decade and transformed the company to a media powerhouse through acquisitions such as Pixar, Marvel and Star Wars franchises. He became Chair and his successor did not perform as expected and was let go and Mr. Iger took over as CEO planning on staying for 2 years but that has been stretched out to 2026.

Mr. Gorman’s task as Chair of the Board will be to find a replacement for Mr. Iger. The skills Mr. Gorman learned and used at Morgan Stanley to find a new CEO and retain talented people in the organization should be transferable. Reuters reported the 4 top contenders to be new CEO are: Disney Entertainment co-Chair Dana Walden; Disney Experiences Chair Josh D’Amaro; ESPN Chair Jimmy Pitario and Disney Entertainment Co-Chair Alan Bergman.

Linking to dividend paying stocks, if you like sports you will notice there are many teams that play the game but not all of them challenge for the Championship. They all have talented players, they play in the same arenas, what is the difference? Why should not all of them challenge for the cup? Sometimes it is the people and team or culture of the organization. Sometimes it is the execution of the game plan. Sometimes it is something else. For your investments are the independent directors ensuring the company is on the right track?

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

In the past election, politicians often painted the economy in 2 different ways – one was reasonably good, the other was not good. It seems both were correct, it dependent on where you were in the income spectrum.

In an article by Christopher Rugaber of the Associated Press, why? despite higher prices, have Americans kept spending at retail stores and restaurants at a robust pace?

One of the key reasons is wealthier consumers boosted by strong gains in income, home equity and the stock market have been spending more of their money.

The Federal Reserve suggests if that consumer spending, the primary driver of the American economy, could help sustain healthy growth this year and next.

Lower-income families have been disproportionately squeezed by higher rent, groceries and other necessities leaving them with less disposable income than before the pandemic.

The Federal Reserve noted inflation-adjusted-spending rose 3% in 2022 and 2.5% in 2023. For the quarter between April and June, spending was up 2.8%.

The Federal Reserve reported the value of housing increased 70% from the first quarter of 2020 to the second quarter of 2024 to $17.6 trillion. Stock market and mutual funds increased 86% to $37 trillion.

One sign of struggles for the lower-income consumers is the proportion of borrowers who are behind on credit cards or auto loans have risen in the past 2 years to the highest level in a decade.

Linking to dividend paying stocks, anyone who owns some will have more disposable income that is very good position to be in. In the economy, it is always very good to have choices and for monetary choices they often come over the long term. Investing allows compound interest to take care of the gains and as your wealth increased, hopefully you had managed your spending expectations. Many financial planners will tell clients at some point you can spend if you want to, rather than not spend, there are many ways to spend, but it is harder to earn. In all economies there are conflicting stories and with dividends you can decided to reinvest, buy something else or take the money out of the market to spend elsewhere and those are good choices to have.

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

In general terms, you will read or hear, stay away from investments in the publishing world because of the continuing changes from physical to digital assets. However, in every industry it seems someone is figuring it out better than others. That is the good and your homework involves determining which company is figuring it out.

In an article by Benjamin Mullin and Lareen Hirsch of the New York Times News Service, Axel Springer, the owner of Politico, Business Insider and a portfolio of German newspapers with split into 2 companies. Mathias Dopfner and Friede Springer will assume control of the media properties. Axel Springer biggest outside investors KKR and CPP Investments will take control of the company’s classified advertising business.

The deal values all of Axel Springer at $15 billion and the company’s publishing assets worth $4 billion.

Mr. Dopfner has ambition to turn Axel Springer from an influential German newspaper publisher to a global media conglomerate. With the split, he can move towards more acquisitions.

The advertising properties include Stepstone, an online jobs board and Aviv, a digital real estate company.

Linking to dividend paying stocks, in investing people often treat industries with the same brush stroke, but that is not necessarily true. It makes good sound bites, but by doing your homework you can find out what companies actually are profit generators that can pay dividends. They are doing something others are not and finding them will help generate wealth for you.

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

In the real estate market, the tag line of location, location and location is often seen because it is true. Where you are matters. In many communities some areas tend to be more stable than others, it the city, because of government buildings, there tends to be more stability than in areas with few government buildings. The same thing it is for work. Most of us believe that education is a path towards higher incomes and often times higher incomes are paid in larger cities, which means moving to larger cities to try to access those larger incomes. Then COVID happened and companies changed procedures to allow people to work from home. But where is home? could it be anywhere that stable internet is found? in some cases yes.

In an article by Emma Goldberg of the New York Times News Service, business leaders and local officials in Tulsa, Oklahoma puzzled for years how to fill the openings as people left Tulsa to go to either coastal cities? What would keep professionals in Tulsa?

The short answer is money. A local foundation the George Kaiser Family Foundation offered $10,000 to remote workers willing to move to Tulsa for at least a year. It has been paid to 3,300 people. This has led to other cities such as Topeka, Kansas; Savannah, Georgia; and West Virginia and northwest Arkansas to duplicate the efforts.

A study was done to find out if it was a good investment for Tulsa? A survey of 1,248 people found that the average person saved $25,000 on annual housing costs (cheaper rent or can buy a bigger house for rent in the big cities); the state brought in more annual income tax revenue and more sales tax revenue.

Why is this a good thing. In Tulsa, there are a number of colleges and universities including University of Tusla; Oklahoma State University (OSU) Tulsa; Oral Roberts University. but over 1,000 people that were college-educated were leaving the area than staying.

Remote workers has jumped from 4% of the country’s workers to 43% in the spring of 2020. The good news for Tulsa is that nearly 3/4’s of the people have stayed longer than one year. Some of them have been thinking Tulsa will be home for a long time. (The foundation has said it will continue to fund Tulsa Remote for the foreseeable future)

Linking to dividend paying stocks, initially many decisions are tied to money. Can you keep more of it and make more? then other factors will influence other decisions and all things equal, money while important is not the sole reason. You can think it is great to invest in a company to make money, but if you could make the same money and be within your values what is the better investment? only you will know the answer.

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

For every industry, there are benchmarks because they give you a reasonable snapshot of what is going on. The benchmarks allow you to formulate a theory and other data allows you to determine if the theory is good. If the theory is good, you can make decisions to do something or nothing and sometimes doing nothing is a good thing. A benchmark in the countries which consumers led the economy is how are luxury sales doing?

In an article by Mimosa Spencer and Dominique Patton of Reuters, French luxury giant LVMH reported a 3% fall in 3rd quarter sales.

The world’s largest luxury group generated $28.6 billion in revenue for the 3 months ending in September, a 3% fall on organic growth. The consensus was 2% growth cited by Barclays.

Fashion and leather goods comprise about half of LVMH revenue and 3/4’s of its recurring profit. The group is home to brands such as Louis Vuitton and Dior reported a sales decline of 5%.

In Asia, excluding Japan, of which China is the main market, the sales decline was a 16% slide from a 14% drop in the prior quarter. In Japan, growth slowed to 20% from a 57% jump the previous quarter.

Linking to dividend paying stocks, those that tend to shop for luxury goods tend to have the highest disposable income, if they are shopping less, then either the economy is not doing as well or they are preserving the income for something else because they expect the economy not to do as well in the future. This is why benchmarks are wonderful snippets, but they need further information to determine if the theory is correct, doing your homework is required.

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