Most of us are bias towards the industry that supplies our income, for many it may not start that way because people look for a job to use their skills. An opportunity arises or someone wants to hire you is the industry and you find there are many opportunities and challenges with it. In a few years you begin to think and believe you can make a career in the industry, maybe not where you started but somewhere in the industry. If you look for a job your first area is the industry where you were employed with. It is normal, most of us have done it. One method to learn about other industries are labor strikes, what is the impact of the industry on the economy?

In an article by Doyinsola Oladipo and David Shepardson of Reuters, in October, the US dockworkers went on strike. On YouTube there are videos of Chinese docks and much of its mechanized, if you were the owner of the dock, you would look to China for the future. If you are a dockworker, you would want to negotiate long term employment contracts and what to do with you if and when the company replicates China’s ports.

The International Longshoremen’s Association union represents about 45,000 port works and their opposite side is the US Maritime Alliance representing the owners of the ports. The union wanted a 6 year deal and hourly rates to raise from $39 a hour to $60 a hour.

As this is Presidential election season, both candidates said they were in favor of the unions, although President Biden is likely more committed.

The walkout affected 36 ports on the east coast and JP Morgan Chase estimated the walkout would cost the US economy $5 billion a day.

Retailers accounting for about half of all container shipping volumes had expected a strike and were busy implementing plans to minimize the impact of a strike. Many of the big players rushed in Halloween and Christmas merchandise early to avoid disruptions but had to pay extra costs to ship and store the goods.

Both Walmart and Costco say they are doing everything they can to mitigate any impact.

French shipping group CMA CGM, the world’s 3rd largest container shipper, said it may charge additional shipping fees for delayed vessels.

The National Retail Federation called on the President to use its federal authority to halt the strike saying the walkout will have devastating consequences for the economy.

Linking to dividend paying stocks, all large profitable companies should have plans A.B, and C when something goes wrong. Whether it is strikes or weather-related events or another scenario, how well they react and adjust tells you whether you wish to continue to hold the investment. It is not the good times, it is the possible negative times that tell you the most about the industry and your possible investment.

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

If you have read Charles Dickens’ A Christmas Story then you would have heard the phrase of getting a lump of coal for Christmas. If you have read Sherlock Holmes, some of the words were about the air because all homes were heated by coal and coal produces smog. If you thought about England for the past 200 years, using coal was part of the fabric of the country.

In an article by Paul Waldie of the Globe and Mail, England’s last coal-fired power station shut down for good at the end of September. This means no coal is used to generate electricity in England. The last coal plant was Ratcliff-on-the-Soar Power Station which has been open since 1967. Its coal-boilers could produce 2,000 megawatts of electricity or enough electricity for 2 million homes. At its peak 3,000 workers worked there, the last days 170 remained.

Coal has been a critical part of the British life since the 1700’s and helped drive the Industrial Revolution. In 1882, the Edison Electric Light Company opened the world’s first coal-fired power station in London.

Up until the 1960’s nearly all of Britain’s energy production relied on coal sourced by hundreds of mines across the country. These mines led to construction of canals and ports to ship the coal from the north to the south of the country.

Last year coal’s share of overall production was 1% of total needs. Wind was producing 30%. Nuclear power was 15% and natural gas at 3%.

Carbon Brief, a Britain-based climate research organization, estimated that from 1882 to the present time, 4.6 billion tonnes of coal were burned, and more than 10.4 billion tonnes of carbon dioxide was released.

Coal had been declining in usage and former Prime Minister Margaret Thatcher shut down hundreds of mines causing widespread hardship for thousands of miners, which the economic impact still exists today, but it was the right thing to do for the country.

Linking to dividend paying stocks, when a company or service is operated for a long time, people expect it to continue to operate for a long time. However, for many industries things change and once profitable companies are no longer profitable. For your investments, while the stocks remain profitable there is limited work to be done except to collect the dividends, but twice a year you should ask how does the company make profits and what needs to change for the company not to make a profit?

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

In the old economic texts, students are taught the choice of producing guns or butter. It seem to be one or the other, not both could be produced at the same time. That line of thinking – either black or white; one or another; my way or the highway; and the list goes on. Sometimes it possible to consider both.

In an article by Virginia Furness and Marc Jones of Reuter, at least 5 African countries are working on what could be the world’s first joint debt for nature swap to protect a coral-rich swath of the Indian Ocean.

Debt for nature deals is becoming popular for poorer countries to pay for conservation. Bonds or loans are bought and replaced with cheaper debt, with savings used for environmental protection. The African initiative would be the first to involve multiple countries sharing a distinct eco-system.

The countries involved are Kenya, Madagascar, Mauritius, Mozambique, Seychelles, Somalia, South Africa, Tanzania and the Comoros. The US and British governments aim to protect and restore 2 million hectares of ocean ecosystem by 2030, benefiting some 70 million people in coastal communities.

Key details such as how much of each country’s debt is bought up and who decides and monitors how and when the conservation money is spent, will require lengthy negotiations.

The International Union for Conservation of Nature (IUCN) is hoping for $2 billion with $500 million of concessional funding and $1.5 billion of bond swap money.

Linking to dividend paying stocks, in most of our lives we often live in the grey area – for example do you drive exactly the speed limit or do you go beyond it? Often times we are given a choice of one or the other and they should not meet in the middle. It is good that there are choices in financing.

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

In every industry, there are seemingly simple solutions and they are tossed out as the way forward. Then reality and regulations work their way into the solutions and the solution becomes complex. A wonderful example is data centers and nuclear power.

In an article by Laila Kearney and Timothy Gardner of Reuters, two large companies Microsoft and Constellation Energy have announced a plan to restate the nuclear plant known as 3 Mile Island in Pennsylvania. The energy produced would be used by Microsoft to power data centers as they need a great deal of power to operate.

The simple solution is once nuclear plants are operational the cost to generate electricity falls as the output rises. The downside of nuclear is what to do with the wastes.

US data center power use is expected to triple between 2023 and 2030 and will require about 47 gigawatts of new generation capacity, according to Goldman Sachs estimates. While wind, solar and natural gas are very helpful, nuclear would be a good option.

The 3 Mile Island plant made global headlines in 1979 with a partial meltdown in 1979, at the time the worst nuclear incident in US history. The reopening would cost $1.6 billion to offset Microsoft’s data-center consumption in the region.

Key permits to reopen the facility have not been filed yet.

Edwin Lyman, a nuclear safety expert at the Union of Concerned Scientists noted resuming the use of equipment and infrastructure that has been dormant for 5 years, could be tricky. Constellation Energy should expect to encounter problems that will be costly and time-consuming to fix.

Linking to dividend paying stocks, there are many ideas in the world – some are simple, some complex but most follow somewhere in the middle and execution is very important. It is easier to do if there are larger credit facilities to draw upon, but money is not everything, the ideas are. For profit making companies, they have a reasonable idea of what works and what does not and having the ability to say no is a good thing. What ideas have the companies you invested in said no to?

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

Every company in the marketplace loves to reduce its costs and maintain high margins to make profits. There generally is a balance and a generally accepted method in the management of the supply chain. In some industries, it is easier to see conflicting values.

In an article by Keith Bradsher of the New York Times News Service, PVH Corp is a fashion retailer that owns the Calvin Klein and Tommy Hilfiger brands. Not surprisingly in the fashion industry, much of the clothing is made in Southeast Asia with a base in China.

China is a large country and in the west are Muslims which the Chinese would like to replace with non Muslims. The Chinese have done many things in the western part of the country, which consumers in the developed countries would prefer not to be done. One method to raise awareness of the actions is through economic means or boycott items made in western China. However, in China and elsewhere the supply chains often gravitate in some areas to the lowest cost and event though the garment maybe made in eastern China, the cotton production comes from eastern China. 90% of the cotton grown in China comes from Xinjiang Province.

The country of China similar to many countries around the world would prefer that others take care of their backyards first. One of the things that China is doing is taken discriminatory measures against companies that focus on the consumer rather than the producer.

PVH, which is based in New York, called its public relations firms and release a statement saying that it was in communication with Chinese officials in the China Ministry of Commerce. PVH maintains strict compliance with all relevant laws and regulations in all countries it operates in,

China is not only a large consumer market but also the world’s largest manufacturer. Many companies depend on factories in China and could be vulnerable if Bejing decided to impose sanctions on their subsidiaries or suppliers.

The US the Ughur Forced labor Prevention Act bans the import of any goods from Xinjaing unless the importer can prove to US customs officials that the products were made without forced labor. The law took affect in 2022.

China has passed its own laws that ban laws, sanctions or boycotts in other countries. The Ministry of Commerce has authority to deem commercial decisions as a threat to China’s national security.

Linking to dividend paying stocks, in many decisions there are more than one competing interests and senior management makes the decisions they make. There are always competing interests and companies have to weigh what is more important, because some group will not be happy with the outcome. The company has to weigh does it have other supply chain options or it can begin to work on a diversified supply chain? There is never a perfect answer because of the pressures to keep costs low, margins high and profits to pay dividends keep coming in.

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

There is a saying that money is always moving and life changes fast, and for the ones that can move money around that is a good thing. However, life does not change very fast because while people can and do adapt, it takes a little while for the institutions and people’s memory to adapt. A wonderful example is highlighted below.

In an article by Valentina Za, Tom Sims and Andreas Rinke of Reuters, the Italian bank UniCredit has taking a position in the German bank Commerzbank and wants to buy 29.9% of the bank. This would below the 30% regulatory feature which triggers a mandatory takeover under German corporate laws.

The backstory is ever since the creation of the EU and since WW II, the banks in Germany have been the powerhouse of the EU. Partly due to the economy of the EU, but the banks in Germany have been the leaders. The Italians were considered much like their economy, to be second tier. Over the years there has been many restructurings with the Italian economy and the banking system.

UniCredit CEO Andrea Orcel announced he had purchased 9% of the shares and was intending to be a friendly purchase and he may hold it or sell it. In 2005, UniCredit bought Bavarian bank HVB. UniCredit had accumulated 4.5% and bought another 4.5% in a tender offer from the state shares.

UniCredit said it would take possession of Commerzbank shares linked to derivative contacts if it secures approval from the ECB.

Commerzbank has more than 25,000 business customers, almost a 1/3 of the German foreign-trade payments and more than 42,000 staff. The state of Germany owns 12% of the shares and the finance ministry said it will not sell anymore shares for the time being.

Friedrich Merz, the Christian Democrat opposition leader said he is against the move by UniCredit.

Germany’s Verdi union opposed the increase by UniCredit as unions fear job losses as German banks have higher labor costs than their Italian peers.

UniCredit believes there is substantial value that can be unlocked within Commerzbank either stand alone or within the UniCredit orbit and that is good for Germany and stakeholders.

Linking to dividend paying stocks, there is rarely a perfect outcome except for various interest groups will react to a merger or moving of control from one company to another. In this case, the German banks represent something greater than simply being a bank to the institutions. Takeovers do happen, people do adjust, in the meantime many words will be spoken and written and then the next chapter will take place.

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

Every year millions of calendars are given out or bought and most of them will have significant dates on them. Some of them are national holidays and many people want to know when they fall upon as they will be paid for no work. Some of the names will be interesting to a few and some will have an interest to the retail world. For example Valentine’s Day, Mother’s Day, Father’ Day and Halloween are celebrated but are not national holidays.

In the case of Valentine’s Day, it is the guilt complex of not having gifts for your partner which drives it. For Halloween, for unknown reasons it is the day many people are at their front doors to give out candy. If you were to knock on the day before or after, the door might not be answered.

In an article by Aimee Oritz of The New York Times Service, if you spent money on Halloween, you were part of an estimated $11.6 billion in spending, up from $3.3 billion in 2005.

Professor Tom Arnold of the University of Richmond, notes Halloween is a marketer’s dream. It falls on the same day, every year. Halloween costumes and candy are largely consumed and needs to be replenished every year.

According to the National Retail Federation’ annual survey, 47% of consumers begin shopping for Halloween before October. The expectation is spending on candy ($3.5 billion); spending on costumes and decorations ($3.8 billion). The average consumer will spend $103.63 per person.

Who loves the holiday? Millennial and Generation Z consumers, according to Katerine Cullen VP of industry and consumer insights at the National Retail Federation. You can expect 3/4s of adults to celebrate Halloween.

Steven Silverstein, the CEO of Spirit Halloween has seen his stores grow from 130 locations to other 1,500 locations. He has seen Halloween grow from candy for kids to Halloween parties for everyone.

Home Depot Halloween program started in 2013 with a single endcap of a store aisle to row. Home Depot’s most popular product is a 12-foot skeleton, “Skelly” which has sold out every year.

CEO Ashley Buchanan of Michaels noted the chain started selling Halloween items 2 weeks earlier that normal and was greeted with very good sales. There seems to be a pent-up demand.

Linking to dividend paying stocks, the retail world is dominated by the calendar and moves through all the holidays and other important dates. Whatever people want to celebrate, the retail world moves in that direction. Another thing driven by the calendar is earnings season and dividend payments that pay quarterly. There are many days that can be important to you as an investor.

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

In every election, politicians talk about all kinds of things and some of them could effect businesses or investments. In an ideal world, politicians will make business and investment reasonably easy, but politics can get in the way. Then senior management needs to make contingency plans just in case the politician is elected. How detailed are the plans will be is based on polling data or if the politician has the ability to win and potentially implement some of the talk. Senior management’s tasks with politicians is they have to work with whoever is elected, although some are easier to work with than others.

In an article by Eric Reguly of the Globe and Mail, he interviewed Charles van der Steen, the President of North America division of Maersk. The company AP Moller-Maersk is the world’s 2nd largest container-ship company with over 700 ships moving around the globe.

The good news is Maersk’s expectation is business to expand roughly in line with the rise in global GDP this year. The reason while exports to the US from China is down 20% to $427 billion in 2023, those from other countries such as Vietnam, Thailand, Indonesia and India are rising.

Many of the companies based in China that was supplying the US have operations in Southeast Asia to build supply chain diversification. This means for Maersk whatever China gives up, Southeast Asia and India will give.

Maersk was founded in 1904 in Denmark, evolved into a container business in the 1970’s and 80’s and has a market value of $23 billion. Its competitors include China’s COSCO and Switzerland’s Mediterranean Shipping.

Among the issues of tariffs, Maersk has to deal with natural disasters and wars. The war on the Red Sea which meant less use of the Suez Canal meant Maersk boosted capacity by 6 to 7% (or used more ships) for the 9 or 10 extra days needed to go around Africa.

Maersk has also invested in more logistics including trucks, planes, trains, warehouses as well as ocean terminals. The company has the ability to pivot quickly or be agile for its customers.

Linking to dividend paying stocks, in the world of politics sometimes political parties are naturally good for a business, sometimes it is a challenge, the important thing is the flexibility of the company to deal with whoever is in power. It is the reason all large companies have lobbyists from both sides of the aisle in over to have stability to do their business plan. How agile are the companies you invest in?

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

Every company once they have achieved a certain size will aim to mechanize some of their processes because they take a lot of manpower. If a robot can do the job, so much the better. The early robots helped stack pallets – the goods come down the production line and then need to put on a pallet to be put on a truck to go to the stores. Before the robots. someone had to stack the pallets but it led to back injuries, etc and a robot works 24 hours a day, every day. Every year, robots will and continue to evolve.

In an article by Waylon Cunningham of Reuters reported Chipotle Mexican Grill Inc has moved an automated bowl-and-salad maker and an avocado-processing robot out of its test kitchen and into a couple of stores in California.

Chiptole said that it is testing the technology to find efficiencies and help our restaurant employees continue providing great hospitality for our guests.

Employees who work with the automated bowl-and-salad maker will continue to make burritos and tacos, add side items and monitor the machine’s quality. Chiptole said 65% of all digital orders are bowls and salads.

Chiptole’s autocado technology, which cuts, cores and peels avocados before an employee mashes them into guacamole. The machine processes an avocado in 26 seconds. Chipotle which had revenues of $9.9 billion says it goes through 5 million cases of avocados a year.

Linking to dividend paying stocks, when a company starts out there is an assembly line of people to get the job done. But overtime people ask what can be done more efficient or are there different processes to allow the work to be done with less people. The answer is overtime and the use of technology which results in fewer people are needed or some transition to something else, not a bad thing just reality. If the company you invest in, what efficiencies have they achieved lately?

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