We are undergoing a shift in how the world buys a vehicle. When the horseless carriage was invented there were a number of ways it could have gone. People tried steam, they tried battery or electric, but the technology at the time was the internal combustion engine. The horseless carriage replaced the horse and carriage for a number of reasons including thousands of horses walking around cities meant the streets were full of manure. A car meant cleaner streets and the choices that were made influenced how the normal family lived and worked. Years later, the public discovered a downside of a car meant pollution from automobiles and there has been efforts to change that. One effort is electric cars, but the profit per vehicle is less than the internal combustion engine or until costs to produce electric fall to the internal combustion model, automakers are hesitant to change. China which did not have many vehicles until recently, the government went all investments in electric vehicles. At present, because many of the investments in the infrastructure to build electric was done by the government, the producers who put the cars together have relatively low costs. In America, the government prefers the industry to put in the investments. The fact of the low costs means both European Countries or the European Union and the US want to impose tariffs on Chinese made electric cars to push the price.

In an article by Eric Reguly of the Globe and Mail, in the recent election in the US many politicians talked about manufacturing jobs. It is the same in Europe and the country of Hungary welcome Chinese investments. The second largest city in Hungary is Debrecen and a new $7.3 billion CATL battery plant is being built. CATL stands for Contemporary Amperex Technology Co. Ltd and the plant of 9,000 workers will supply batteries for more than 1 million electric vehicles.

Hungary is led by Prime Minister Victor Orban and his government courts both Chinese and Russian investments as well as being active in NATO which is helping Ukraine fight Russia.

The US imposed a 100% tariff on imported Chinese EVs, effectively eliminating the low-cost models from the market. (in China it is possible to buy an EV for $10,000 as a commuter vehicle).

In Hungary, the government welcomes investments from EV manufacturing including CATL, Eve Energy, Sunwoda, Samsung SDI, and SK Innovation.

Originally, VW, BMW and Mercedes welcomed the Hungarian battery plants and Mercedes will be the largest customer of the CATL batteries.

BYD, which overtook Tesla to be the largest maker of EVs, measured by unit sales, announced it will build a plant in Szeged located in southern Hungary. It will be the European Union’s (EU) first Chinese=owned EV assembly plant and its products will be sold tariff-free across the EU’s 27 member countries.

For Hungary, foreign investment was over $15 billion. For the auto industry in Europe, question marks are high. Prime Minister Orban wishes to be in the world’s top 5 battery makers.

For Chinese EV companies, the land in Hungary is relatively cheap, as is labor and energy. In addition, Hungary offered subsidies of $2.5 billion.

Linking to dividend paying stocks, sometimes countries use tariffs to protect the companies within its borders and that can be a good thing, in the past and likely in the future using tariffs have been election issues. However, when the foreign company builds a factory in the country to get around the tariffs, is that good politically? economically? will the local politicians now try to protect the foreign company and its domestic workers. Often times, profitable companies have and can have longer term horizons, politicians tend to have short term horizons and longer term tends to win out in the end.

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

Most people look at the weather forecast whether it is their app on the phone, watching the Weather Network, listening to the weather forecast when they wake up on the radio or TV, knowing the weather forecast is important. For the insurance industry, when the forecaster says it will nice that is music to the ears of the insurance company. Ideally in the insurance world you want few claims and many people paying their insurance. If the law or the bank requires you buy insurance, the insurance company feels that much better.

In an article by Emily Flitter of the New York Times News Service, the cost of hurricane season weighs heavily on the insurance industry. Things were going well, hurricane season was manageable, then Hurricanes Helene and Milton came calling.

Sridhar Manyem, an analyst for insurance ratings agency AM Best, noted while it is early, estimates of Hurricane damage costs will be in the $200 billion range. In the early stage of a storm, analysts look to past hurricanes and add onto what is seen and expected costs to get a number.

If the storm is too expensive for insurers, it will have a knock-on for customers. It will give the insurance companies a reason to either raise rates or stop selling policies in the certain areas. If a house has damage, the insurance companies are very picky on what caused the damage. If it was wind, then likely to be covered. If it was water, then likely not to be covered.

If the damage is flooding, then the number one insurer is a creature of the government called National Flood Insurance Program, which provides 2/3’s of all flood insurance coverage in the US.

The program is plagued with problems and owes $20 billion to the US Treasury. In normal circumstances this means insurance rates need to be increased. However, that would make insurance unaffordable to the people who need to buy flood insurance in order to keep their mortgages.

Similar to every industry in the marketplace, small insurers that are poorly managed or have concentrated business too narrowly, they could collapse under the weight of claims from storms. It was noted, since 2021, nine property and casualty insurers have gone bankrupt in Florida.

Linking to dividend paying stocks, while the overall economy is dominated by small and medium sized business, there are many large businesses that are profitable and can pay dividends on a yearly basis. Sometimes being large means a diversification of cash flows which helps the company through all the crisis which occur. Companies till have to well managed and execute on their business plan, but size can help. In private business, the rule of thumb is the company can have the customer it wants or does not want, in government, the organization is expected to appeal to everyone, not participating in an area is good for the company. If you were a consumer, you might have a different opinion, but the health of the company is why you invest and you like nice days.

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

There is a term called hiding in plain site and it refers to people have a desire both to private and public, social media has made it much easier to be public. But many people while they do not wish to share all their lives on social media, often show highlights particularly if they travel. This is a good thing, but depending on their positions can lead investors to try to determine what is the next step.

In an article by Debra Kamin, Steve Eder and Ben Protess of the News York Times News Service, the Trump organization has been actively seeking to license hotel properties in Israel with the Trump name.

The organization through Eric Trump examined two sites that are high profile and excellent location. The first property is not far from the Israeli Supreme Court and Prime Minister’s office being a former site of Israel’s Ministry of Foreign Affairs. The Trump Organization was looking at a luxury hotel. The other site was near the headquarters of the Israeli military and will have the most rooms in the country when construction is completed.

The sites are owned by the Nitsba Group and the Trump organization would join a partnership with the Group to lease the hotel. The Nitsba’s hotel includes the Haleom Hotel in Jerusalem with 400 guest rooms and in Tel Aviv, the Sarona Hotel with 880 rooms.

While the hotel in Washington was sold, the Trump organization has put its name on a new tower in Jeddah, Saudi Arabia and was hoping to establish a hotel in Dubai, UAE.

Eric Trump’s visit to Israel has reported in Israeli publications. As well he was interviewed for a New York based magazine aimed at the Jewish community.

In addition, there are posts on social media. Eric Trump stayed at the Dan Tel Aviv Hotel. He met executives from the Nitsba Group and toured at least 4 hotel properties owned by the firm. Then he went to Eliat, a Red Sea beach town and toured the Princess hotel and posed for pictures with the Mayor and the owners of Lockwood real estate. Ultimately Eric passed on the Princess deal.

Linking to dividend paying stocks, in all deals there is a connection of the dots. Sometimes social media makes it easier, although if you were negotiating you would likely think about being more private. However, people are social and they like to get out and tell the world they are still here which means you can see hints in social media which are sitting in the open. Likely in the months to come, AI will make it easier to do research, but being able to connect the dots will still involve doing your homework.

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

In cities across America, it is not unusual for a building to come down as a higher and better use takes its place. Often times the building is a few stories, but sometimes larger and many cities like to keep part of the old as a facade to allow for those on the street level to adapt to the new building. However in some cities, particularly in Las Vegas, they turn an implosion into a spectacle.

In an article by Rio Yamat of the Associated Press, the hotel known as the Tropicana Las Vegas was demolished complete with a fireworks display.

The last hotel to be imploded was the Riveira was levelled for a convention center expansion. This time, the Tropicana was imploded for space for the new Oakland A’s major league baseball team to build a stadium as it relocates to Las Vegas. The baseball stadium is expected to cost $1.5 billion.

If you have ever watched movies starring Frank Sinatra who was the one of the most popular singers in America, he was friends with Dean Martin, Sammy Davis Jr., Peter Lawford and Joey Bishop and the group was known as the Rat Pack. They often performed in Las Vegas including the Tropicana. Part of the history of Las Vegas is after Fidel Castro took over Cuba, the mob needed a place to wash its money, and the laws of Nevada allowed gambling. The mob and Teamsters poured money into the strip including the Flamingo and Tropicana. The Tropicana was once known as the Tiffany of the Strip including having a million-dollar green-and-amber stained-glass ceiling.

Times have changed and now most of the large hotels are owned by companies you can buy shares in. Las Vegas is a tourist town, and if you watch sports, people travel to various cities to watch their team perform. Watching the highlights of a NFL game between the Steelers and Raiders game in Vegas, there were lots of yellow towels in the audience or likely Steelers fans who made the easy trip to Vegas.

Linking to dividend paying stocks, things change, sometimes slowly but things do change. While it is important to remember the past, learn from it, and move forward. While the basic interaction of people does not change, how they do and where they do it can. People use different tools and when the tools change, how money is made, changes. Companies which adapt to change are ones you want to hold for a long time.

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

Every government in the world loves to encourage value added enterprises to enhance the economy. All countries have something that allows for people to maintain a livelihood, the next step is some sort of manufacturing process and people in general can move from subsistence to middle income living. That is a good thing and governments around the world encourage it with incentives. Often a company says we agree with the government and launches an ability to match the government incentive.

In an article from Reuters, governments around the world have recognized the weather is changing and something needs to be done to change the forecasts. Many governments have encouraged electric vehicles which use less fossil fuels, one of the governments which agreed was Sweden.

In Sweden there is a company called Northvolt Group which is in the battery business and they agreed with the government. The production of batteries was a natural extension for the company and they set up the Northvolt Expansion AB unit to build batteries at its gigafactory in northern Sweden. The company raised money from VW, Goldman Sachs and BlackRock and all was good until it was not.

The company said the Northvolt Expansion AB has filed for bankruptcy owing between $264 to $396 million dollars or between 2 and 3 billion Swedish krona.

Europe was disappointed as Northvolt Expansion AB was Europe’s best shot at a homegrown electric-vehicle battery champion. The company cited production problems, sluggish demand and competition from China.

Linking to dividend paying stocks, sometimes the most profitable companies because they are profitable have a connection to governments and the government suggests they should expand and do what the government would like. Government subsidies and encouragement are offered and accepted to lower the risk to the company, but the wonderful supply and demand charts of introduction to economics still apply. No demand, company loses money. Just because they are homegrown, does anyone want to pay more? Moving into markets with government assistance can be worthwhile it can also be expensive to shareholders.

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

For the average person, the prices they pay tend to be retail which means cost of product plus margin added in and if it makes sense, they look to lower the cost by buying wholesale or when things are in sale (although most of the time it just means the margin for the store is lowered to make room for the new items at higher margins). The average person would love to get the costs the big chains receive, for the big chains will be offer volume discounts and a host of other things. It is also expected, the big chains will have a better understanding of the market, because they have people monitoring it to ensure their negotiations reflect where the market is going.

In an article from Reuters, a store with over 39,000 stores and one of the biggest sellers of meat is suing the large meat processing and packing companies for allegedly conspiring for years to limit beef supplies and making the company pay higher prices.

If you follow the large meat processing and packing companies, you will aware that over the years there are fewer companies and the ones that exist are very large. The companies include JBS, Tyson Foods, Cargill and National Beef.

One would think large companies dealing with large companies, they would benefit perhaps small and medium sized companies would be at a disadvantage. However, McDonald’s wrote in their brief: only colluding meat packers would expect to benefit by reducing their prices and purchases of slaughtered cattle because they would know that their conspiracy would shield them from the dynamics of a competitive marketplace.

The meat packers have denied any wrongdoing in related cases that have consolidated in Minnesota federal court. McDonald’s filed in the Brooklyn federal court.

Cattle producers who said they sold animals directly to the meat packers for slaughter said they lost billions in the alleged scheme.

McDonald’s is seeking unspecified monetary damages and a court to order an end to the alleged price-fixing conspiracy.

Linking to dividend paying stocks, it is not unusual for companies to be sued, it is unusual for a relatively small number of companies that control the market to be sued by someone else than the government. McDonald’s wants money and lower prices to ensure it keeps its margins. Should it win, it would receive compensation, but courts move slowly so do not expect the money quickly coming to the company or potentially lower prices at McDonald’s. One thing the Donald Trump lawsuits have taught everyone, if there is an ability to cause delay, delays will happen. It is generally not a great idea to invest based on lawsuits.

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

After every natural disaster, the first concern should be the people and making they are safe and relatively secure. Then the next task is clean up and then submitting claims to the insurance companies.

If you live by a creek or river, you are aware that there are high and low points for the water on a normal basis. You are reasonably aware of the worst case in recent years, then there are the 1,000-year possibilities. If you live by a creek, you are not expecting the 1,000-year possibility and likely will not have flood insurance. You will likely have the regular non flood insurance. What happens if you live by a creek, water levels rise, trees and debris block a bridge or dam and the water detours onto your property and you have water damage? What happens if you live in an area that has seen many floods due to hurricanes?

In an article by Sally Ho of the Associated Press, likely tree and roof damage are normally covered. The big issue is water damage. Water damage is typically not covered by home insurance and many insurance do not carry flood insurance. At the moment, the primary company is the government through the National Flood Insurance Program run by the Federal Emergency Managment Agency or FEMA. Congress created the program 50 years ago when private insurance companies stopped covering flood damage.

North Carolina has 129,933 policies in place, but likely that is on the coast and in Florida, there are 1.7 million flood policies.

Charlotte Hicks, a flood-insurance expert in North Carolina who has led flood risk training and educational outreach for the state’s Department of Insurance said the reality is that many Helene survivors will never be made whole. Most people will be left to fend for themselves or starting over. Some will go into foreclosure or bankruptcies. Entire neighborhoods will not be rebuilt.

For private insurance companies, although the numbers are large, they are manageable, according to Mark Friedlander, spokesman for the Insurance Information Institute, an industry group. The losses are expected to be in the $5 to $8 billion range. (Hurricane Ian, a category 4 hurricane caused about $50 billion in damages).

Only 6% of homeowners carry flood insurance and most live on the coast.

Even if a homeowner does have flood insurance, the maximum FEMA pays out is $250,000 per house and $100,000 for contents.

Linking to dividend paying stocks, every industry has manageable costs, those which are high but not too high to keep the company selling products and services to make a profit to pay dividends. In the private sector, it is good business not to do something or cut unprofitable areas of customers. The insurance companies do this very well to keep their investors holding their stock and bonds. While often we think insurance companies are here for you, there are many exceptions, and the less you need them, the better they like it. For your investments, what is a manageable costs and what is the risks it will go over that number?

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

Every place in the world has value and some are much easier than others. In the developed world, most of those places of value have been tapped, which means there is value somewhere else. In many countries there is natural value, but to unleash the value infrastructure is needed to be built. At some point in time, prices rise for the product and even with the infrastructure costs, value is found.

In an article by Oliver Griffin, Lucinda Elliott, and Fabio Teixeira of Reuters, Latin America’s wealth of hydroelectricity and other renewable energy resources could make the region a major producer of clean hydrogen as the world seeks alternatives to fossil fuels.

Similar to the Mountains that are found on the west coast of the US, the mountain range runs all the way to the tip of South America. Mountain ranges means there are potential rivers to be tapped to generate hydro electricity or relatively low costing energy. Low cost energy means other manufacturing needs can be built. If they are built, less migrants to the US.

Government leaders expect a major boon for the region from clean hydrogen, also known as green hydrogen, produced using electricity from renewable sources that do not emit carbon.

Billons of dollars are on offer from multilateral lenders.

The problem is pricing. Clean hydrogen is currently about $10 kilogram. Gray hydrogen generated from fossil fuels is between $1 and $3 a kilogram.

A World Economic Forum report published in August recorded $6.1 billion as earmarked for renewable investments including hydrogen by multilateral lenders and funds. In addition, Uruguay is examining a feasible study for a $4 billion clean hydrogen plant.

The Inter-America Development Bank (IAB) believes the investments should be $100 billion to $300 billion by 2030.

Linking to dividend paying stocks, similar to most things in life, costs of raw materials is a driver of investments. Some investments are for now, some need government backings as the needs are recognized but it is in the future. When costs rise for the existing methods, alternatives are quickly found and pushed. When investing, it is wonderful to think about a perfect future, however research the actual costs before making large commitments.

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

Around October 1st. Hurricane Helene surprised everyone by making landfall as expected and then shifting the eye to the East Tennesse area. As expected, it dropped a month’s rain plus in many places across the Southeast of the US causing flooding, trees down, loss of cell service and a host of other concerns. Some of them could be fixed within a few days, in East Tennesse areas the water that flows downhill increased in size by 20 feet causing the rivers to widen and take whatever was in their way. In most areas of the country, the roads follow the rivers, and when rivers become large the roads are no match for the river and roads need to be replaced. While the first concern for any disaster is the people, after they have a sense of stability, there are other concerns.

In an article from the Associated Press, 2 North Carolina facilities that manufacture the high-purity quartz used for making semi-conductors, solar panels and fiber-optic cables have been shut down and there is no reopening in sight.

Sibelco and Quartz Corp both have operations in Spruce Pine. The town is located in North Carolina across from the border of East Tennesse. The town is located northeast of Asheville and used I 26 for transportation.

Outside of Spruce Pine are some of the world’s highest quality quartz. Last year, Sibelco announced it was investing $200 million to double capacity at Spruce Pine. Both Sibelco and Quartz said they were concerned with the people first and operations a distant second.

Vince Beiser, author of the World in a Grain, described the process as to make silicon chips, you need to first melt down a highly purified material called polysilicon. That can only be done in crucibles that are themselves made of a material it will not react chemically with the polysilicon and is able to withstand enormous heat. The best material for those crucibles is ultrapure quartz. Spruce Pine is the source of the purest natural quartz ever found on Earth.

An estimated 70-90% of the crucibles used worldwide are made from Spruce Pine quartz.

Wayne Peight who is a member of Spruce Pine’s town council said around 75% of the people in the Spruce Pine has a direct connection to the mine.

Linking to dividend paying stocks, every downside has the opportunity to learn something and it is possible to take a position in the companies when they are out of favor. In the above case, the companies have a market share of 70-90%, with that number you can do research about who owns the company and what happened to the price. How resilient is the company, after the unexpected events. When should operations start again to retain their market share? Answering a few questions, can lead to new investments.

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