In terms of shopping, everyone looks for value. If you are buying stocks buying value means trying to determine when a stock is underpriced and with likely rise as investors see why it is undervalued. In terms of shopping, people look for sales and buying brands at good prices. Every day and every week shoppers who shop at grocery stores will see ads which say buy an item because it offers value this week. Next week there is a different item for sale. As the price of an item goes up there are often more than one way to look at what is value.

In an article by David Dolan of Reuters, wealthy tourists are flying to Japan from across the Southeast Asia to buy high-end clothes and handbags at a discount thanks to the weak yen currency.

Some tourists are not buying the goods in their home country, but flying to Japan and shopping. This is good for the shoppers, but not so good for the luxury goods sellers because they can not raise prices to accurately reflect the currency leaving them with lower margins in Japan, at least while the yen stays weak.

An example is Louis Vuitton’s popular Alma BB handbag sells for $2,050 in China and $1,875 in Japan and last month when the yen was lower, was going for $1,725.

The yen would have to strengthen to about 136 to the dollar to put the bag’s Japanese price at parity with China. The currency was at 149.3.

Japan had a record 3.1 million foreign visitors in June putting it on track to beat an annual record of almost 32 million foreign visitors in 2019.

Linking to dividend paying stocks, with increased communication and ability to travel, people love shopping and saving money or finding good deals. It happens at the shops in your area and across the world. Where there are bargains, people figure it out relatively easy which makes business very competitive all the time. If the countries nearby offer similar goods and services, people will cross the border to buy, it is something most people have done and will continue to do. The problem for business is trying to capitalize on that trend because at some point in time the currency will be move towards parity and for some the growth expected will not happen as something has changed. When you are investing, try to remember about cycles of the economy.

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

Every company goes through transitions and sometimes they are easy and sometimes there are many changes. The easy ones tend to be when the company is making profits and continues to make profits, the changes is when the company needs to make profits for it has been stumbling. If a large company is stumbling, everyone in the company knows something is wrong and it will take a large effort to turnout the company. One such example is Boeing.

In an article by Abhijith Ganapavaram and Allison Lampert of Reuters, Boeing announced it had selected a new CEO by naming Kelly Ortberg. Mr. Ortberg has been in aerospace for over 30 years working for Rockwell Collins and United Technologies/RTX or he is an outsider to Boeing. One of many tasks Mr. Ortberg had was to integrate the $8.3 billion acquisition Collins made of BE Aerospace.

As an outsider, the Board of Directors did not choose an insider such as Patrick Shanahan, the former Spirit Aero CEO and others who was seen by many analysts as a possible successor to succeed Mr. Calhoun. Which means among the many tasks as CEO is to ensure the executive team works together or bring in new people to solve the reputational and safety crisis Boeing has been facing with its Max planes. How well he does this will be seen in the next few months – will people in the executive team be replaced or find new jobs in the aerospace industry?

Linking to dividend paying stocks, on the investor side everyone would like to see a seamless transition, when you are dealing with people that does not happen automatically. When a person is appointed to an executive position, for the most part they are considered part of the team who could replace the CEO. All teams work in similar fashion which is why there are many movies about teams and some of them do not work, others do and investors need to ask does this team work to ensure profits are delivered?

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

Dividend investors love to invest in companies with a long-standing market dominance that can make profits and pay dividends hopefully for a long time. While this is true, once in while you have to be shaken to understand how quickly things can change if you are not doing your homework.

In an article by Daisuke Wakabayashi and Claire Fu of the New York Times News Service, the story is how the GAC Aion, an electric vehicle maker in China sent a team to Thailand to open up the market. The team arrived with a long list of things to accomplish but no office, no factory, no local employees and no clue. They set up offices in a hotel using the conference rooms and started to find an office, recruit dealers, devise a business strategy. In 74 days after arriving in Thailand, they sold their first EV.

Chinese EV manufacturers such as Aion are stampeding into overseas markets. Thailand is the first country to experience the sudden influx of China’s brands and confronting how their ambition and competitiveness are reshaping the car industry.

Last year sales of popular Japanese brands such as Nissan, Mazda and Mitsubishi plummeted as consumers bought new electric cars from Chinese manufacturers. Dealers that had worked for decades with American and Japanese brands are now turning showrooms to Chinese EVs.

Thailand is the biggest market in Southeast Asia and is known as Detroit of Asia. The country serves as a manufacturing hub, or it is beachhead market. In 2022, Japanese brands accounted for 86% of the market, last year that fell to 75%. 6 Chinese electric-vehicle companies are already selling in Thailand and 3 more are coming this year including BYD, Aion, Great Wall, Neta and Chery.

Aion in its first year in Thailand opened 41 showrooms and started production of a new factory in July. It has announced plans to open a plant in Indonesia and start selling its cars in 9 countries across Southeast Asia.

Tesla started with the higher priced vehicles, the Chinese companies typically start with low price vehicles to gain market share then bring in more expensive EVs.

Linking to dividend paying stocks, when many long paying dividend stocks, they have near monopoly or operate in those types of markets and that is good for the investor. However, companies around the world can manufacture similar products and if the government is helping the companies expand outside its borders, the companies will have access to low rate credit which can disrupt the market. For your investments it is important to understand the competition and where it is nipping or taking a bite of your company profits.

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

It is normal for people to work for other people or companies. Some you will like; some you will love and others you are looking for another opportunity. Overtime, the ones you love, you begin to believe that the company has your back to. Whether it does, is a different issue, but for now it is important that people will have a relationship with company and they bleed the company’s color.

A book titled Exposure written by Robert Bilott published by Atria Books, An Imprint of Simon & Schuster, NY, 2019 asks what if the company does not have your back?

In the book, Dupont based in Delaware opened up a number of plants to manufacture products from their chemicals. One of the chemicals became well known as Teflon and many homes across the US and around the world had no stick Teflon pans and used them on a regular basis and were happy with the product. At the plant, the chemical that made the Teflon is PFOA and related PFAS, these are chemicals that do a great job, but do not break down in the environment or are called forever chemicals. At every manufacturing company, something has to be done with the wastes. Ideally, it is recycled or reused or minimized or something of that nature, but after WW II when the chemical first started to be used, that was not a top of the line concern. The wastes were sent to a landfill, covered with dirt and out of sight, out of mind. Hundreds of companies did the same thing and anyone that lives near a waste disposable site knows the issues.

The problem is overtime water falls onto the landfill, the wastes breakdown and the chemicals get into the drinking water system. There are solutions, but solutions can be expensive and plant managers were tasked at getting rid of the waste problem at the lowest cost. The issue is always when did a company know about the affects of the wastes and in particular their waste problem.

In the book, which is set in West Virginia, people worked in the Dupont Chemical plant and were paid a middle-income salary which allowed them to have a lengthy career at the company. At the same time, over time the company donated money to parks and schools so most people in the community had positive feelings for the company. Downstream from the landfill was farms and one particular farmer saw his cows die frequently. In 2 years, more than 190 cows were lost, what is going on and how to fix it?

The author of the book started his career as an environmental lawyer defending chemical companies, but because of a personal family connection took the case from the farmer. Initially he thought Dupont was going to be a good citizen and he could work with the company because they were cut from the same cloth. It turns out DuPont did everything in their power, which was plenty to not give information, but every once in a while, Mr. Bilott would discover an email or text referencing an issue. Then it would be more discover and research till he found out what chemical was in the landfill.

Then it would be months before he found out the chemical experts knew about the potential side effects but did nothing except to stonewall the information. If you know where to look, and eventually how the game is played, it is possible to find answers. Upon finding answers then it takes the legal system to bring out penalties and potential solutions.

Eventually Mr. Bilott won the lawsuits, because after using every potential legal avenue they ran out and had to admit responsibility and pay damages.

Linking to dividend paying stocks, some of the solutions would have lessened profits but the company would have continued to make profits. However, the company took the easy way out and then the legal way. which is to delay for as long as possible. The chemicals are still in the water system and everyone in the world has some in their blood because the chemicals have wide use in our daily activities. They also have consequences such as higher cancer rates for people using the chemicals directly. Perhaps the risk analysis for Dupont always came ahead with the status quo. It is nice if a company does the correct thing and branches out to different avenues to making money. For example in this case, if a water treatment plant uses carbon filtration it reduces the amount to 99% acceptable standards. The company could have invested and used its government influence to have carbon filtration mandatory for its new business. Solves a problem and offers a solution, but it did not.

Linking to dividend paying stocks, we often think that because we have a connection to a company that they will do right by you. In reality that is not really the case, although it can happen. For your investments, do the companies really do the right thing? or they expecting someone else to do it?

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

The majority of businesses in operation are private companies and they are owned by families. If you think about English Kings, the King needed a male heir to continue the blood line to maintain the place as King of the country. Similar to all successful companies, over time assets build up and the desire to maintain the assets in the family eventually is a dominate theme. The founder or Chair of the family will have their choice for different reasons. Most of the time the issues are fought over in private, but once in while it is possible to see the fights in public.

In an article by Jim Rutenberg and Jonathan Mahler of the New York Times News Service, one of the battles is being fought in public. Rupert Murdoch owns media interests in Australia, the UK and the US and became an American citizen when he bought the Fox Network.

The Murdoch’s are fortunate that the children of Rupert have turned out to be good seasoned executives, but Mr. Murdoch’s political leanings are to the right, and he believes most of his children are in the center, he wants someone leaning right. The eldest son Lachlan fits the mold.

In major disputes, eventually one parties sues the other party and then the information becomes public or before a judge. In this case, Mr. Murdoch’s other children – James, Elizabeth and Prudence were caught off guard with a change in the trust agreement and have sued. They sued in Nevada. The lawsuit has changed relations with the children and Mr. Murdoch and only Lachlan attended a wedding between Mr. Murdoch and his 5th wife Elena.

The suit is in Nevada, because the state is popular for dynastic family trusts because of favorable probate bylaws and privacy protections. The court specializes in family trusts and estate disagreements.

When Mr. Murdoch sold some of the Fox Network to Disney for $71.3 billion, all the children received $2 billion each.

Linking to dividend paying stocks, all organizations invariably deal with succession planning and who is become the chief decision maker. Sometimes in the news 2 companies announce they will merge, but it falls apart largely based on who will be in charge in a year or so. The issue is not about money, it is about decision making. The wonderful thing about succession planning is everyone can have an opinion on who should be the next CEO or President and why. If you like the result, you can keep your shares, if not, then finding alternatives is a good thing to do.

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

No matter what state you are in, the largest landowner is the government. Most of the land outside the urban areas has some forests or desert, but when thinking about the forests, the largest landowner is the government. There are multiple government departments you can think about, but most private timber companies lease land from the government to cut wood. The timber companies own a little of their cuttings, but they pay the government (whether you think it is enough is a different issue) and cut wood to provide jobs to both the people in the field and at the mill.

If you go to other countries, the equation remains the same and in Brazil the government maybe changing its way. In an article by Fabiano Maisonnave of the Associated Press, for years the Amazon Rail Forest has been cut back to expand farming. This was reduced the size of the Forests and for some has been a factor toward increasing carbon in the environment. The rational being the trees need CO2 in order to grow, less trees mean less CO2 being used by the trees.

The government has both allowed it to happen and has not considered how the Amazon should be cut, but there maybe a change. The government announced an area the size of the island of Costa Rica will have selective logging or less clear cutting.

In Brazil, similar to other countries with forests, vast lands are designated as public lands yet have no special protection or enforcement and are vulnerable to land grabbing and illegal deforestation. Criminals frequently take over the land and clear cut it, hoping the government will eventually recognize them as owners, which happens more often that not.

The new rules mean companies that do get timber concessions or leases, have to follow strict rules. They can log up to 6 trees a hectare over a 30 year period.

The idea behind recently elected President Luiz Inacio Lula da Silva is to expand the rules from the size of Costa Rica to the size of Italy. Rules are good for a country because if they are broken leases can be cancelled.

Linking to dividend paying stocks, when people came to America they were amazed at the number of trees. The history of the country is trees can be cut down faster than they grow and people moved westward. At some point there was a desire to save trees or slow down the cutting and planting trees to grow. At the same time, the issue of the value of the leases and how high or low should they be? One side wanted higher; the other side wanted lower to maintain the ability to move the logs to the mill at a profit. Governments make a choice and it is up to the communities and the companies to adapt to it. Often times in the past, the people in the government that made a choice were closely connected to the logging industry, perhaps that has changed a bit. If you invest in companies that own natural resources it is always important to note at what fee does the company make less money?

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

Every company in the world relies on technology to run their businesses and everyday senior executives go over the key data in terms of revenues, expenses and projections. Technology allows it to be ongoing and seamless until the system does not work. For every company in the world, a choice is made to do everything or close to everything inhouse or contract the work out. There are advantages and disadvantages to each, but most companies choose to contract out some of the work. One of the disadvantages of contracting out the work is every once in a while, and everyone hopes that the once in the while is rare, something goes wrong. In the case of airline companies across the US, they use a service such as CrowdStrike to protect themselves from the cyber-attacks.

In an article by David Koenig of the Associated Press, CrowdStrike was doing a normal software upgrade, if you have a phone or personal computer, the companies offer regular updates, and they happen and life goes on. The problem was there was an error in the upgrade in the cyber security software affecting Microsoft operating systems which cause computers to go down.

Compounding the problem was for the airline industry, the technology issue happened on the busiest day of the holiday season with occupancy levels of planes at 90% and more. The software affected some of the older software programs which affected systems used to check in passengers, schedule crews, and make preflight calculations about aircraft weight and balance. The airlines could not offer solutions to passengers and had to cancel flights which compounds the problem till Delta Airlines total of flight cancellation reached 5,500, United Airlines total was 1,500. The good news was by the weekend or by Monday United’s total of cancelled flights was 19. American Airlines, Spirit Airlines, Frontier Airlines and Allegiant Air were back to normal by Monday.

Alaska Airlines and Southwest Airlines were not affected as they are not CrowdStrike customers.

Delta has offered waivers to make it easier for customers to rescheduled flights. In recent weeks, Delta Chief says company is facing $500 million in costs from the outage.

Linking to dividend paying stocks, with technology at some point there will be concerns, the system is not working, the issue is always what does the company do about it. Every year, the expectations for seamless service gets higher and higher and when things do not go perfect, people react to the system differently. Some can wait, some do not want to wait, and what does a company do for them? No days, people who do not like to wait, will post something on social media for good or bad and it may or may not be read by hundreds or thousands of people and will they change their buying of the service or product? We do not know but it could, so the issue is how does a company react? If you think they reacted well, then you can hold on the stock, if the company acts badly then it is good to find an alternative.

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

In all companies there always needs to be a host of opinions because all companies represent many different aspects. The company provides employment, they provide customers a good or service they want and hopefully need on a regular basis. The company by doing those things has supplier firms and the list goes on. If the company wants to and has a desire to grow, eventually it will need advisors to help them through the process. In most things in life, the best solution often needs a little massaging for everyone to agree to the best solution.

In the world of mergers and acquisitions, there will be different viewpoints and they have to be addressed one way or the other. What maybe a great economic decision, may not be a great political decision because of the things people believe at the time.

An article from Reuters, in the steel making world, Japan’s Nippon Steel which has had a presence in the US for years, made an offer to buy US Steel based in Pittsburg for $14.9 billion. In the world of politics, made in America or manufactured in America is a political concern and various interest groups have tried to strengthen their positions.

Nippon Steel reading the tea leaves, hired former US secretary of state Mike Pompeo to advise them. It would not be surprising they have many other advisors and public relations firm.

Linking to dividend paying stocks, after the economics works for the company and the price is agreed to many companies need a government agency to sign off on a merger and acquisition. If they need approval, the budget includes higher people who had senior levels of leadership in the government to go through the process and hopefully make the economics work. Individuals can be of different political stripes, but companies have to work with governments and do not want to tied too much to one party or another.

Linking to dividend paying stocks, the larger a company becomes the potentially greater influence it has and working with the government agency is a key element of its success. Somewhere in the regulations a government can use all the tools, but they rarely use all the tools, they can use some of them. Government relations are important element of large companies, and it is one of the reasons why they sponsor events to buy goodwill, what events do the companies you sponsor have and do you support them?

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

Many people around the world eat a slice of pizza at least once a month some do it more. It can be good for you, is tasty and affordable. Given the wide choice of pizza and the shops that make it, it maybe a tough choice to pick your favorite. Sometimes you see chain stores and forget how big they are.

In an article by Juveria Tabassum of Reuters, Domino’s Pizza believes sales around the world will be a slower and trimmed its target for new international store openings.

Dominio’s Pizza Enterprises is the brand’s largest franchise and has more than 3,800 stores in 12 international markets. It is based in Australia and is expected to open 600 new stores down from 925 originally expected. The master franchise said it was rationalizing stores in Japan and France.

Elsewhere around the world, Domino’s has over 14,000 international stores.

In the US, there are about 7,000 stores and according to CEO Russell Weiner, Americans continue to look for value. The company expects sales to increase by 3% rather than 4.8% in the 2nd quarter. The company has refreshed its loyalty program and offers such as the carry-out boost weeks that provide a 50% week-long discount. The program will drop from 2 boost weeks in the quarter to one.

A company the size of Dominos depends on managing supply chain costs and last year was able to lower them, which helped the company earn a profit of $4.03 a share compared to estimates of $3.68.

Linking to dividend paying stocks, sometimes the brands you love or go to can move across the globe because people like it. There will be logistics concerns about opening branches outside the original market, but they can be overcome with time and growth of the brand. Sometimes what you like it, can make you money but homework is the key because many brands do not become international brands.

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