When a company makes a profit on a consistent basis they have many options of what to do with the money including paying dividends and buying back stock. One of the options which investors like to see is investing in other companies to understand them as they are doing something the company is not doing. This is called vertical integration or having a say from the raw materials to the finished product to the sales floor. All countries evolved a little bit different which means as a company moves beyond its borders on the founding country, it needs to understand and buy the best in the breed companies to increase its presence in the new country.

If you think about the US and China, after World War II, in the US suburbs developed with shopping malls as a center piece of the development. This led to stores developing into the model first it was Sears who took a leadership position. Later the shopping experience is led by Walmart. In China, which is the second largest economy of the world, the internet and mobile phone apps led to the normal pattern which people shop.

In an article by Kane Wu and Summer Zhen of Reuters, Walmart recently sold a $3.7 billion dollar stake in JD.com of China. Walmart had bought the stake 8 years ago and since then has changed the manner in which they operate and will focus on its own operations in China.

Walmart invested in JD.com in 2016 by selling its Chinese online grocery story Yihaodian to JD.com for a 5% stake in the company. Later Walmart increased its holding to 10%.

According to Thomas Hayes, Chairman at Great Hill Capital, Walmart wanted to get exposure in China in 2016 and learn the retail business. They now have their own exposure through Walmart and Sam’s Club stores and no longer need a minority interest in JD.com when they have a great business themselves.

In terms of Sam’s Clubs business grew 26% and there are now 48 Clubs in China.

Linking to dividend paying stocks, while the emphasis on the stock is what their core business is, most dividend producing stocks have investments in other companies as options for the future. The key is the future, due to the profits they can have a long-term outlook, and it is possible those companies will grow in value. In similar fashion, many companies own real estate which if all sold would lead to shareholder gains, but the real estate is not being sold at the moment. When you are doing your homework, those other holdings help protect your investments which is good thing.

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

If you were in the marketing world and wished to appeal to young adult males in turns of the myth of marketing, you would like to pick James Bond and some of the movie roles played by Cary Grant. Both of the people easily moved in society parties; each were well dressed and carried themselves well. The women were attracted to the characters and each had a dark side which the audience typically cheered for. In the case of James Bond, he was working for the British government or a spy to stop bad guys. In the case of Cary Grant one of the roles in the movie To Catch a Thief was he stole jewels, but nobody was injured. The owners might be alarmed and ordered more security and made insurance claims but Cary Grant did not kill anyone.

In a book called The King of Diamonds by Rena Pederson published by Pegasus Crime, New York, 2024, the author investigates the mysterious case of a jewel thief stealing diamonds in Dallas, Texas.

Dallas, Texas is the banking center of Texas founded on cotton farms and cattle ranches. The cattle ranches are some of the biggest in the US because everything is big in Texas. When oil was discovered, the center of financing of oil cemented Dallas over Houston where outside the city the refining of the oil is done. The huge deposits of oil in Texas made many millionaires and eventually they bought large homes and enjoyed social gatherings. Often times there was a gala season for money to be raised for arts and culture and men wear tuxedo and women were gowns and jewelry. If you are wealthy, the jewels were worth thousands in the 1960’s and would be worth millions today.

In Dallas, someone was going to the most expensive homes in the city, breaking into the homes, and stealing some jewelry but not everything. The person(s) was very particular about what they stole and many times left expensive jewelry. Often times, the thefts occurred after a gala event where the owners would come home take off their jewels and leave them on the table to put them in safekeeping the next day. This led to many questions of information needed to do the heists.

The author of the book, Rena Pederson was a former journalist, and she looked back at the events and tried to piece together what were the circumstances that led to nobody being convicted on the heists? If you think about oil and gas industry, for those looking to drill it is a process to determine where the best place to drill is to find oil that pumps out in commercial amounts. In some ways it is gambling. hopefully with more information, but nevertheless it is gambling. In Dallas as well as every large city there has always been the lawful side of the city (where most of us live) and the unlawful part and prior to the legalization of gambling – there were plenty of places to gamble. They were often referred to as clubs. Who ran the gambling joints, it tended to be the mafia or those connected to crime. If you live in Dallas, legalized gambling was a 3-hour flight away to Las Vegas or a day’s drive.

In Dallas and every other city, when the wealthy become wealthy, they have a different relationship to the police and most of the time it means having all the protection but no publicity about their affairs. In politics, all politicians are dependent on raising funds and when the wealthy give it is not only to influence potential laws, but to run interference to stay out of the limelight. Sometimes it works, sometimes the activities become public. In the book, the author comes to the conclusion that the thief was likely someone that came from a wealthy family or wealthy neighborhood and they were not really stealing to raise money by selling all the jewels, it is likely they were keeping it, perhaps to admire the jewels or the thief was one of their own.

Linking to dividend paying stocks, most of us own stocks to become wealthier and have the income on a consistent basis. For some the money can be spent on a lavish lifestyle because the quarterly dividends come up to pay money that is spent to maintain a lifestyle. It is one of those individual choices people can make, knowing the dividends are coming quarterly. Having the option from a financial point of view is the most important element of the financial plan. After you have the option, you can debate how the world works or should work for the better?

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

If you watch the Super Bowl in NFL football, after the MVP is chosen, he often says his is taking his family to Disney World in Orlando. It is a paid message, and Disney has given free passes even though with the salary of an NFL player, they could buy the tickets without the freebee. That message has reached to thousands of others who go to Walt Disney World. If you never gone, you may consider going at least once.

In an article by Jessica Fu of The New York Times News Service, a couple from New Haven, Conn, have gone to Walt Disney World every year since 2015. In 2020, they had a son and in 2022, he went. Everyone that goes on a Disney trip also notices fees quickly add up – the after-hours party for Mickey’s Very Merry Christmas Party; the theme’s parks photo service to download photos of the family that photographers took during the visit. The cost was about $6,000.

In June, Lending Tree, a financial firm, published a survey of more than 2,000 people that 45% of the parents with children under 18 went into debt to finance their Disney trip.

For a family of 4, a one-week trip can cost between $6,463 and $15,559 not including flights or souvenirs, according to an analysis by Nerd-Wallet, a personal finance site.

At those prices, it is not surprising that Disney reported softening demand at the theme parks.

Disney parks are the top drawing theme parks with Disney World drawing 17.1million visitors in 2022 according to a report by AECOM. The second busiest theme park is Disneyland in California drawing 16.8 million visitors.

While 99.99999% of the people enjoy it, they do come back with sticker shock. Sometimes it is the extra fees which seem reasonable at the time – $15 a person a day to use FastPass.

A spokesperson at Disney says there are many options in pricing.

Rachel Cruze, who hosts a personal finance podcast with her dad, Dave Ramsey, advises not going into debt for vacations. There is great beauty in the natural parks. If you go into debt for the vacation it will follow you for a month or more.

Linking to dividend paying stocks, the great aspect of people going into debt to visit Disney is the powerful branding it has and will continue to have. People may not go multiple times a year unless they live in the Orlando area, but going at least once is a right of passage or check off the bucket list. There are wonderful moments at the parks and every year they get better as Disney the Master of Marketing and cross over benefits ties those together. If you see Disney is not doing a great job in tying their entertainment juggernaut to the theme park it is time to find alternatives.

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

In every country around the world, there is a division of male and females in the workforce. There could be practical reasons, but in reality, males typically go to work and make more money than women, while women look after the households. There are traditional reasons for this, if you consider the time of hunters and gathers, men went out to find and kill an animal for food (although just because they went out, does not mean they always came back with game).
It was the gathers or women looking after the children who found berries and whatever to eat that kept the families from starving. Later, men looked after domestic animals and did the bulk of the farming because it was heavy physical labor. Times have changed and technology makes it easier for both sexes to look after animals and do the planting or work on a computer.

In an article by Constant Meheut of the New York Times News Service, a country that has had a very tradition breakdown of men working and women and home is changing. The country of Ukraine is a war with Russia, which means many of the men have been drafted and sent to the front lines. For the rest of the economy, it still needs to function, and the country has been looking towards women as a solution.

In the article, DTEK, Ukraine’s largest private energy company has seen 1,000 male workers drafted into the military or about a 1/5 of the workforce. It has hired 330 women.

Ukraine is a country where women were not encouraged to work outside the home, however the pay is good and the pension is generous. Women who did not imagine working, have changed their minds and are doing the work. For women, the biases are long held and include women are second class and less reliable workers, women cannot do physical work; the roles are considered too complicated for them such as driving a trolley bus.

For women in Britain and the US – many of them remember or heard about the iconic posters of Rosie the Riveter during male shortage of WWI and WW II.

In the Ukraine, 3/4’s of Ukrainian employers have experienced labor shortages. Before the war, 47% of women worked according to the World Bank. Since the war, about 13% or 1.5 females have left the country. For the ones that have stayed in the country, more opportunities have opened up, but the country still has a labor shortage.

In the mining industry, there were no women because the law banned women from working in mines. Since the war, the law has been changed and there are women miners. One of the women working says for now she is staying because the schools are open and where would she go? In every job, people need supports and as long as they exist or made stronger, the longer the person stays.

Linking to dividend paying stocks, we all have biases. Sometimes it easier to see them in a different country, but things can change, and it can be for the better for everyone. In your investing, you will have and see bias and it is good to know what it is. Sometimes it is regional companies, sometimes it is not the competition in the industry you worked for, but we have biases. Over time and earning profits in an industry and you will slowly overcome some of the biases.

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

In the world of energy production, we know that utilities will tend to use the lowest cost production, which is why when coal prices increased, many utilities switched to gas plants. There were other reasons, if you produce electricity with coal, the burning of the coal emits excessive carbon dioxide, and one hopes the wind continually blows the air to disperse the carbon to a wider area. However, there will be excessive carbon produced. If a city is a bowl-shaped environment similar to LA and Beijing, on good days there are many wonderful reasons to live there, on days when the wind does not disperse the air, smog grows. If you think about the novels on Sherlock Holmes concerning London, there was smog in the air (people were burning coal in their homes). Change of heating source, changed the air.

In an article by Ken Moritsugu of the Associated Press, approvals for new coal-fired power plants in China has dropped according to analysis by Greenpeace East Asia. 14 new coal plants were approved between January and June with a total capacity of 10.3 gigawatts down 80% from 50.4 gigawatts in the same time last year.

In 2022, authorities approved 90.7 gigawatts and in 2023 106.4 gigawatts.

At the same time, China leads the world in solar and wind power installations.

In turns of extreme weather events, the Ministry of Water Resources said there were 23 significant floods this year. As well as China had landslides which can about because of flash flooding.

Seasonal flooding is common in southern China, the historically drier northeast and areas bordering on North Korea are beginning to get heavier amounts of rain. This causes floods and cut power and communications in Jianchang.

The National Energy Administration has unveiled a 3-year program to retrofit existing coal power units and equip newly built ones with low-carbon technologies. Coal provides 60% of China’s of the country’s electricity.

Linking to dividend paying stocks, there are always tradeoffs in the production process and ideally for citizens they would like to have the less mitigating circumstances as possible. Sometimes it is possible but expensive, sometimes it is overlooked and hoped the environment can absorb and clean up the process and sometimes it is costly after the lawsuits. It is a balancing act for margins and government actions or inactions.

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

Every country will wrestle with energy costs particularly for large manufacturing industries. The large manufacturing companies likely grew over the years and one of the factors was relatively low-cost energy prices. However, along the way was productivity improvements, new technologies and the continual update of the processes. All of that takes input from the company and supplier companies and how much does the company do internally and how much can it or does it want to outsource the process? At the present time, there is political pressure to ensure the energy comes from renewables as much as possible, but the reality is oil, gas and coal are still needed. How does a country such as Germany cope?

In an article by Irene Galea of Reuters, major German manufacturers say the country’s high energy prices and lack of reliable energy sources are forcing them to consider restricting domestic production or moving their operations aboard.

For context, before Russia invaded Ukraine, Germany was dependent on relatively inexpensive Russian oil and gas. That came to a stop when the European Community backed Ukraine and the pipeline blew up. Germany had to scramble and build new facilities to allow the oil and gas from Norway and the US and elsewhere to make up the shortfall, however prices rose and fell, but are still twice as expensive as a few years ago.

51% of large companies in Germany with over 500 employees and 45% of firms with high electricity costs are considering relocating facilities and cutting domestic production or already doing so. This is according to the 2024 Energy Transition Barometer survey by the German Chamber of Commerce and Industry. These figures are up 8% and 7% respectively from last year. The chamber’s survey was conducted between June 10 and 30 and included responses from 3,283 companies.

Germany aims to reach net greenhouse neutral by 2045 and legally mandate coal phase out by 2038. The government has committed billions of dollars to the transition including a $6 billion subsidy for companies in energy intensive industries (steel, glass, chemicals and paper production).

Companies such as BASF and Speira GmbH (an aluminum supplier) have cut back production.

In Germany, manufacturing accounts for 20% of the country’s economy as of 2021, according to the German federal statistics office.

Linking to dividend paying stocks, all companies have inputs to production and when gross margins fall because of unexpected increases in basic production, something has to be done to cut costs to ensure margins are met or can be increased in the near future. Companies are started for various reasons, originally, they were on a river or lake because transportation was by water. Then we moved to railroads and finally to highways and airplanes to move goods and services. There are advantages to all of the methods of transportation and ideally business loves a stable pricing system. Productivity improvements including technical improvements can be a great help but still the costs creep into the equation. Companies will move to where they benefit the most or have the greatest options, notwithstanding their connection to the place they started.

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

In every profession, there is a search for patterns and the patterns can tell the expert what has happened. The easiest way to consider this statement is to think about paintings. In some Reels or Facebook video clips from the National Gallery in London, UK are videos to help people look at paintings and gain greater enjoyment from the art which hangs in their galleries. As you look at art differently, you may come more often to the art gallery. In journalism, there are the 5 W – Who? Wait? When? Where? and Why? and if you are curious to ask, you will be rewarded with a many destinations. No matter what industry or event, there will be patterns or references which helps you determine the origin or source material.

In a book called The Lazarus Heist by Geoff White, published by Penguin Random House, London UK, 2022. The Lazarus reference is to the evolution of cybersecurity crimes and links to North Korea.

In the age of the internet, eventually most of the world’s institutions and largest companies are connected into the internet because of the tremendous benefits it brings. The downside is everything that can be used for good of the company and mankind can be used to the opposite of good. Sometimes the people are on the other side are crooks, sometimes they are paid by someone wealthy enough to pay them to steal from others and there are many permutations along the way.

In the book, the writer Mr. White explains how cybersecurity works and equally how those that are trying to protect people try to see which patterns exist and how seemingly isolated events are connected. When the US government says another government is at fault, it is based on the patterns of the programs and where they send the money if they are successful in stealing.

In the US there are multiple divisions in the government that focus on cybersecurity and they are typically embedded in National Security, Treasury and the Secret Service, whose job is more than to protect the President. The role of government is technically for everyone, which implies a certain openness to information. The people who wish to steal money, need access to the openness to move towards the people that can pay money to have their systems running normally. It is a cat and mouse situation that really never changes.

Linking to dividend paying stocks, reading a book such as The Lazarus Heist explains why cybersecurity budgets are here to stay and the firms that offer protection are similar to insurance payments. Everyone pays for insurance in the hopes of never using it, but it is there if you need it. You will have to do your homework because not every company is the best in the breed for every industry, but having one in your portfolio is a good thing.

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

In our daily lives we have choices to spend our money and one way is to walk through a supermarket. On the shelves will be thousands of products and you will have a choice to buy particular items. There are industries designed to reinforce your decision to buy – whether that is marketing and advertising. You may make a decision based on price or brand or likely a combination of many factors. One of the factors which could influence the decision is who owns what products? and are they investable?

In an article by Anirban Sen, Savyata Mishra, Jessica Dinapoli and Abigail Summerville of Reuters, family owned candy giant Mars Inc is buying Kellanova Co for about $36 billion. Mars has brands such as Mars, M&Ms and Snickers while Kellavova has brands such as Pringles and Pop-Tarts. Kellanova was formed when Kellogg’s divided the cereal brands into Kellogg’s and the rest into Kellanova in 2023. The offered is for $83.50 a share a 33% premium from the price on August 2.

Mars has a 4.54% of the US snacking market, while Kellanova has a 3.9% share, the market leader is PepsiCo with a 18.8% share. The last acquisition of Mars was Wrigley in 2008.

It is expected because there are few overlaps for the antitrust regulators not to agree to the merger, once the deal should be completed in mid 2025. Kellanova will become a part of Mars Snacking led by global President Andrew Clarke, based in Chicago. The present CEO of Kellanova Steve Cahillane announced he would be leaving the company. Mr. Cahillane previously worked at Coca-Cola.

In the pandemic, snack food companies led by Pepsi were able to increase prices, retain market share and increase profits, but this helped inflation go up. Mars CEO Poul Weihrauch said he aims to hold prices steady and not pass on costs from the deal to consumers. Mr. Weihaunch said we are a big and strong company.

Analysts say the deal is a bet that people will continue to buy branded products over cheaper alternatives or buying private label goods. (the brand of your local supermarket).

Linking to dividend paying stocks, as you move through your daily life you can see companies that are potential investments. Many of the companies are not sexy but very dependable in revenues and profits and you can relatively easy monitor your investments. If you are a buyer, are others? do you like the product or service? do you get good value? if the answer is yes, then you can do your homework whether to invest or not in the company. If the company is profitable, then it is easier decision to make and it is easier to decide to hold the shares or seek alternatives.

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

If you think about the California gold rush in 1848, the state of California was sparsely populated as the bulk of the population of the US lived on the east coast. Trains tracks had not been laid across the US and people had to travel on horse or oxen drawn carts or take a ship. If you took a ship from New York it had to go around the tip of South America and come north to California. It was a long journey and anyone who has been on a long journey asks is there a short cut? It turns out Central America offered a short cut and eventually the country of Panama was chosen.

The French had tried to build a canal, but there were many obstacles and many of their people died of sickness. The US overtook the process and completed the canal and ships had a short cut. At the time, the US took ownership of the Canal Zone and when they did, they did not ask about whose land it was or being used for, the land was going to be a canal, and the canal was built.

In an article by Peter Goodman of the New York Times News Service, the canal has a problem – all the water in the canal is fresh water but there was been a long standing drought in Panama. It used to be 36-38 ships a day could pass, but that has fallen to 22 ships a day. Those totals meant over a year 13,000 ships most them load with containers went through, the totals have fallen to 10,000.

Given the number of containers, there are many ideas of what to do? Build a railway to off load some of the containers on one side and put them back on the other side? Gain access to more fresh water?

Vasquez Morales is the administrator of the Panama Canal which is both the economic heart of the region and a central artery for global trade. More than half of the containers moving from Asia to the East Coast ports passes through the Panama Canal.

The Canal is 80 kilometers and typically takes 12 hours to go through. The canal is a series of locks which function as ladders to Lake Gatun and then down again. In terms of water usage, a single ship needs about 50 million gallons of water. The waters of Lake Gatun is the source of more than half of Panama’s drinking water for more than 4.4 million people.

This year there was rain and the fresh water rose in the Canal making Mr. Morales happy as he likes it when there is a rainy day.

Lower water levels make the Lake more salty, which is something to avoid. There is a solution to build a dam on the Rio Indio. At the time of building the canal, governmental mindset was this was an economic solution to our problems and people in the area have to adjust. Now days, it is important to talk to the people who would be affected by the dam as lands would be flooded. Government will decide what is more important and what compensation is offered.

Linking to dividend paying stocks, most of us have grown up with the idea of economic progress and those of us who benefited still believe that economic progress is a good thing. As years go by we can ask was building particular infrastructure a good thing? sometimes the answer was probably no, but it was in the name of economic progress. As times evolve the number of stakeholders change and compensation levels change, if the company you invest in has evolved, that is a good thing. There is no perfect answer for economic progress but one hopes benefits are seen by the majority than the few. Sometimes owning shares in profitable companies allow for seeing the options for all.

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