In all economies there is a cycle, but the understanding is when does the economy move from negative to positive. For the average person in the economy, there has to be hope the market improves. For the investor with options, being aware of lower asset values and when will the market is expecting to move and advance positively is the holy grail of investing or value investing.

China has the second largest economy in the world but it has a large problem – the real estate market. The government spent on infrastructure and the country has some of the best infrastructure in the world, but China allowed the property market to be 25% of the economy. In an article written by James Griffiths of the Globe and Mail and Alexandra Li of Reuters, according to official data, China has some 390 sq m of completed and unsold homes, equivalent to 6.6 Manhattans. One survey found the number of properties for sale was 20 times higher than the number of transactions that month.

A property bubble in the 2000s and 2010s saw local governments across China make vast amounts of money selling land to developers, who paid hefty premiums safe in the knowledge that apartments would be snapped up by investors. The property sector has grown to account for 25% of China’s GDP and a staggering 70% of all household wealth.

The biggest property developer was Evergrande defaulted on $300 billion in debt. Resales have fallen 7% year over year as well the price of new homes has fallen 11%.

China’s central bank has set up a $42 billion fund to buy excess inventory with the intention of turning it into affordable housing.

In a book called Banking: A very short introduction written by John Gooddard & John O.W. Wilson, published by Oxford University Press, 2016, the authors outline some of the previous panics and how long they took to recover. The Swedish Banking crisis in 1991 – it took the Swedish government to guarantee all bank deposits and creditors of 114 Swedish banks. The initial cost of the rescue was 4% of Swedish GDP.

The US Savings and Loan crisis in the mid-1980’s resulted between 1986 and 1995 more than 1,000 savings and loan companies was subject to closure or some other form of resolution. The US government step up the Resolution Trust Corporation in 1989 to allow slow disposable of the assets of the failed Savings and Loan companies.

The Japanese banking crisis end after a boom in property values which ended in 1990-1. Following a weak recovery in mid-1990’s, Japan felt a further downturn at the onset of the Asian crisis in 1997. For 2 decades, the Japanese economy experienced a protracted deflationary spiral.

The global financial crisis of 2007-9, mortgage-backed securities were held in portfolios and banks around the world and they all lost value. You can be the judge when the economies finally left the losses behind.

Linking to dividend paying stocks, economic cycles happen but if there is a crisis, to recover from the crisis will take time, but if you can invest when things are reasonably weak, you will be reward when the economy improves. Banking is about confidence and in a crisis very few people have confidence. One thing you can be confident in as holding stock in a profitable company that can pay dividends. The price of the security will likely fall, but the company is paying a dividend and one way you can use the dividend is buy more of the shares or average down. At some point the shares will trade at a higher multiple than the competition and you will be rewarded.

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

Every stock goes in a cycle and usually that cycle is related to its business cycle. The easiest way to see it is in leisure stocks. For example, when the weather warms up people go to theme parks to go on the roller coaster and enjoy the park. The theme park brings in more revenues during the warm weather, in the cooler months of winter, less people go to theme parks. If you invest in the theme park company, you need to watch the weather and attendance records, if the average spend at the theme park is consistent, then you should expect the stock to move upwards during the warm weather. The point is in many companies, they have natural cycles. The same is true of growth stocks, at some point the straight-line forward growth will level off, is Tesla at that stage?

In an article by David Randall of Reuters, some of the institutional shareholders are convinced although they like Tesla, if the day’s of dizzying growth are over, there are other alternatives to consider.

For many years, Tesla has been valued as a tech company rather than as car company. The people who like Tesla always talked about valuing Tesla similar to Apple or Alphabet, rather than GM. In early June it was trading at 64 times future earnings. For comparison GM trades at 4.7 times, Ford trades at 6.4 forward earnings and Toyota trades at 10.1. If Telsa now resembles more legacy auto company the stock should fall from $176.29. One question is what is fair value?

Ross Gerber, whose LA based firm of Gerber Kawasaki Wealth & Investment Management bought 500,000 shares a decade ago. Mr. Gerber has cut his holdings to 300,000 and believes it should be 40% less than their current value or about $100. His other shares, he has made large capital gains and expects to give some of his stock to a charity to allay the consequences of selling or use them to sell put options, which allows him to raise income without incurring tax penalties.

Tesla stock had 14 times increase in share price in the past 5 years, which encourages people to hang on to some of their shares. Is this time different?

John Belton, a portfolio manager at Gabelli Funds sold its entire position of 65,900 shares, because he believes the fundamentals were becoming detached from reality.

Someone who has been buying is Cathie Wood of ARK Innovation who has increased her shareholding to nearly 12% of the fund’s assets. She bought $100 million worth of shares in April, according to Morningstar data. During April, Ms. Wood said Tesla is worth closer to $2,000 a share by 2027 or worst case scenario $1,400 because of the exciting future it has it front of it.

Graham Tanaka of the Tanaka Growth Fund has owned Tesla since 2011 when its shares were $2, sold its position, because the risk is high in Tesla and you have a great play in Nvidia trading at half the valuation.

Linking to dividend paying stocks, the wonderful thing about the markets is there are many differing opinions who all look at the same data and see something that either reaffirms their idea or tells them to stay away. Only with time do you know who is correct. If you want time to help you, buying a company that pays a dividend while you wait is a good thing to do.

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

In a book called Firefighting – The Financial Crisis and its Lessons written by Ben S Bernanke, Timothy F Geithner and Henry S Paulson published by Penguin Books, NY, 2019. The book offers lessons from a crisis. The 3 authors were the lead news daily in 2008 through 2010 as the financial industry went through losses, destabilization, recession and recovery. The 3 people had to come up with a variety of tools to fight the fires and to allow for recovery. In all industries including finance, regulations are there for the last crisis not the current one. If the crisis is worse this time, the regulations are less effective because all industry change from the last crisis. Finance is always a little different because much of finance is about confidence. Banks lend money, they have to have a level of confidence the counterparty will repay. When the confidence falls, investors run will their money to something safer. When money goes to something safer, it effects regulatory levels.

Not surprisingly, the 3 authors noted the system is more complex than ever and when they tried to do something, they quickly realized the tools in the toolbox were not sufficient for the job and needed to persuade politicians to give them better tools.

None of us, nor any of our accomplished colleagues, had ever lived through a crisis like this. Despite Ben’s expertise on the Great Depression, Hank’s feel for financial markets and Tim’s experience with crisis abroad, none of us were ever sure what would work, what would backfire, or how much stress the system would be able to handle. There was no standard playbook we could consult for guidance, no professional consensus about best practices. We had to feel our way through the fog, sometimes changing tactics, sometimes changing our minds, with enormous uncertainty about the outcomes.

Although it could well have been worse, the crisis was still extraordinary damaging both for the US and the world. Millions of Americans lost their jobs, their businesses, their savings and their homes. One crucial lesson of 2008 is that financial crisis can be devasting even when the response is relative aggressive and benefits from the formidable financial strength and credibility of the US. The best strategy for a financial crisis is not to have one. And the best way to limit the damage is make sure crisis managers have the tools they need to fight before things go too bad.

Financial crisis will never be entirely preventable, because they are products of human emotions and perceptions. as well as the inevitable lapses of human regulators and policymakers. Finance depends on confidence and confidence is always fragile. While it is vital to try to rein in excessive leverage and risk taking on Wall Street, that leverage and risk taking is generally a reflection of excess optimism in society as a whole. Mania and panic both seem to be contagious.

The US was not prepared for the crisis in 2008, but a decade later is it better prepared? We believe yes and no. There are better safeguards in place to avoid a panic in the first place. But the emergency authorities for government officials to respond are in many ways weaker than they were in 2007. The government’s ability to respond to a collapse in economic demand with monetary and fiscal stimulus has also been significantly depleted.

The authors outline what needs to be done and could be done, but with a divided government where do you think the two parties would co-operate?

The book has charts from pages 135 to 212 that are interesting to look at.

Linking to dividend paying stocks, all stocks go up and down or fluctuate, but some less than others. In times of optimism, you want to play offense, but when things are tough, defense is the name of the game. There are always conflicting emotions to investing, but receiving dividends is something to look forward to. In the book, Firefighting, very few people thought the economy would go into crisis or what were the signs? when should you play defense? Often times if a dividend paying stock cuts its dividend, then you know you need to move to alternatives, but did you miss the signs? too optimistic? what are the alternatives to move to?

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

In a book called Firefighting – The Financial Crisis and its Lessons written by Ben S Bernanke, Timothy F Geithner and Henry S Paulson published by Penguin Books, NY, 2019. The book offers lessons from a crisis. The 3 authors were the lead news daily in 2008 through 2010 as the financial industry went through losses, destabilization, recession and recovery. The 3 people had to come up with a variety of tools to fight the fires and to allow for recovery. In all industries including finance, regulations are there for the last crisis not the current one. If the crisis is worse this time, the regulations are less effective because all industry change from the last crisis. Finance is always a little different because much of finance is about confidence. Banks lend money, they have to have a level of confidence the counterparty will repay. When the confidence falls, investors run will their money to something safer. When money goes to something safer, it effects regulatory levels.

Not surprisingly, the 3 authors noted the system is more complex than ever and when they tried to do something, they quickly realized the tools in the toolbox were not sufficient for the job and needed to persuade politicians to give them better tools.

The story of Lehman was a nightmare because it was loosely regulated, heavily overleveraged, deeply interconnected nonbank, with too much exposure to the real estate market and running on short-term financing. It was not the start of the crisis, because Fannie Mae, Freddie Mac, AIG and Merrill Lynch were bigger and near collapse.

The reason why Lehman collapsed was because the policymakers could not save it, they had no powers. However after Lehman collapsed, the policymakers were given the power to end the fire. Lehman was highly profitable on subprime mortgages, commercial real estate and other highly leverage investments. If Lehman had been a commercial bank, the FDIC could have seized it, guaranteed its liabilities, and resolved it to avoid a messy bankruptcy. Lehman is a nonbank, no one had the power to help. Lehman needed a buyer, Bank of America (BoA) was considering then it bought Merrill. Barclays was considering but it needed a shareholder vote and there was no time for it, so the regulators in the UK said no.

AIG, the global insurer, had fallen through the cracks of our broken regulatory system. The 3 policymakers had not paid attention to the company, as Office of Thrift Supervision was its regulatory body. AIG insured the lives of 76 million people, 180,000 businesses that employed 2/3’s of America’s workforce and had $2.7 trillion derivative contracts through the Financial Products division. The insurance aspects were the reason the Fed gave a $85 billion credit line in exchange for 79.9% of the firm.

Some critics were outraged the Fed did not insist on haircuts that would reduce payments. Haircuts are a common feature during the normal bankruptcy process, but they a sure way to make the panic worse and the Fed did not have the power to insist on haircuts. The goal of a crisis response should be to alleviate fears, not to confirm and amplify them.

Eventually AIG paid back its guarantee and when the government sold its position made $23 billion.

The next step was the AMLF (Asset Backed Commercial Paper Money Market Mutual Fund Liquid Facility) This was designed to stop the run of money market funds with invested $3.5 trillion for 30 million Americans and the commercial paper market which is the lifeblood of many companies. The idea was to guarantee money market funds just as the FDIC guaranteed bank deposits. Within 2 weeks the program was up to $150 billion.

For months, the policymakers had been working on stronger emergency authorities, but Congress had not given anything. President Bush said the time had come to go to Congress and the TARP or Troubled Assets Relief Program came into being. It was designed to buy up to $700 billion of toxic mortgage-backed securities.

The process was for the House of Representatives to vote for it, then the Senate and the President signs the bills. The first vote in the House lost with Republicans voting against, then the stock market fell 9% or $1 trillion and some Republicans came to their senses. The bill passed the second time in the House and Congress and the President signed off.

For crisis managers, it is vital to have the tools you need before a crisis, so that they do not need to rely on political leaders to take political risks in real time under the public microscope.

Now that the policymakers had the tool of TARP the issue was hope to use it. Do they make assets, equity because the system needed more capital and buying assets was an indirect and inefficient way to boot capital levels. There was no easy way to determine which assets should be bought. Eventually Hank’s team decided to buy nonvoting preferred stock rather than common equity. This would calm fears of a government takeover, and do so on relatively attractive terms so that strong and weak banks would accept the capital and restore confidence in the system.

The 9 biggest banks were summoned to Treasury and were told to accept the equivalent of 3% of their risk-weighted assets for a total of $125 billion in TARP investments. If they did not take it, then the other government guarantees would be taken away from them. For the rest of the banking system $125 billion was available to smaller banks and eventually nearly 700 banks took financing. This was a critical step toward stabilizing and recapitalizing the banking system.

In Europe, banks were nationalized but not giving capital and were undercapitalized for years. This lead to a slower recovery.

The policymakers wrote about incoming President Obama and President Bush working together and then Obama doing a very good job both in understanding and continuing the regulations in his term.

In May, the Fed released the results of its stress test, and they were much better than many in the markets has expected. The Fed determined 9 of the 19 largest financial firms were already adequately capitalized to withstand the test’s worst case scenario and the other 10 needed $75 billion in additional capital which was given.

The economy was helped by the American Recovery and Reinvestment Act of 2009, $300 billion in temporary tax cuts along with $500 billion worth of new federal spending. By 2015 the economy had recovered to precrisis levels.

Linking to dividend paying stocks, when parts of the economy or the economy goes into crisis, it will take time to come back to precrisis levels. If you have invested in dividend paying stocks, you will have dividends that could go into some of the better companies that were affected by the crisis. Cash is king during a crisis, but patience is a virtue, because if you have done your homework in advance, you can pick up great assets for less money and continue with healthy dividends.

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

In a book called Firefighting – The Financial Crisis and its Lessons written by Ben S Bernanke, Timothy F Geithner and Henry S Paulson published by Penguin Books, NY, 2019. The book offers lessons from a crisis. The 3 authors were the lead news daily in 2008 through 2010 as the financial industry went through losses, destabilization, recession and recovery. The 3 people had to come up with a variety of tools to fight the fires and to allow for recovery. In all industries including finance, regulations are there for the last crisis not the current one. If the crisis is worse this time, the regulations are less effective because all industry change from the last crisis. Finance is always a little different because much of finance is about confidence. Banks lend money, they have to have a level of confidence the counterparty will repay. When the confidence falls, investors run will their money to something safer. When money goes to something safer, it effects regulatory levels.

Not surprisingly, the 3 authors noted the system is more complex than ever and when they tried to do something, they quickly realized the tools in the toolbox were not sufficient for the job and needed to persuade politicians to give them better tools.

In the spring of 2007, it was clear the housing boom was over and the subprime mortgage market was tanking. But other economic indicators were good such as job market was still strong and bank capital levels seem strong.

Our assumption that the carnage in subprime would bring some healthy discipline to a chaotic sliver of the credit markets without much broader damage seemed reasonable, given what we knew at the time. We did not foresee how the complexity and opacity of mortgage-backed securities would lead creditors and investors to run from anything and anyone associated with mortgages and not just subprime mortgages. Fear turned into panic. Subprime was a problem, but it would have been a problem just for subprime borrowers and subprime lenders. More than 50% of the US housing losses would happen after the failures and near-failures of September 2008. Without the panic, the problems would have been contained. Fear turned those sparks into an inferno.

Crisis do not announce themselves as either small brush fires that will burn themselves out or systemic nightmares with the potential to burn down the core of the financial system. Policymakers need to figure it out as they go along.

The first phase, the Policymakers said no to providing help and the Federal Reserve responded the traditional manner by injecting liquidity into the market. Treasury had very limited financial authority, most of the early action came from the Fed. The injection of liquidity is known as the discount window – it allows a commercial bank facing a cash crunch to access money to meet withdrawals by private creditors without having to sell assets in a fire sale.

Countrywide Financial, a $200 billion firm that originated 1 of every 5 mortgages in 2006. It was also overreliance on lower-quality mortgages and relied on short-term financing. Countrywide issued commercial paper and used repo financing. The policymakers forced Countrywide to draw down its credit line, upgrade its collateral and be sold to Bank of America. The troubling signs the policy makers saw was the $1.2 trillion commercial paper market and $2.3 trillion repo market could be vulnerable to runs.

The next step was to force all the banks to raise capital by selling equity to sovereign wealth funds in Middle East and Asia.

The TAF (Term Auction Facility) a program designed to overcome the stigma of the discount window by lengthening the terms of the loans but actioning them to eligible banks, rather than lending at a fixed rate.

The TSLF (Term Securities Lending Facility) an innovative program that would extend liquidity to nonbanks, allowing nonbanks, including 5 major investment banks, the ability to swap less liquid for more liquid collateral.

When Bears Stearns, the country’s 17th largest institution ran into problems as its cash reserves fell from $18 billion to $2 billion in 4 days, the policymakers had a problem there was a limit to what they could do. The Fed was limited to lending against solid collateral; Treasury need congressional authorization to do more; neither the Fed or Treasury had the powers to guarantee obligations, invest capital or buy illiquid assets to stop a run on a bank. The Fed did not have a standing facility to help an investment bank, it dealt with banks. The solution was for the Fed to lend $30 billion to Maiden Lane which would buy $30 billion of securities from Bear so JPMorgan Chase could buy Bear for $2 a share, down from $130 a few weeks earlier.

The good news for the Fed, since it lent to Bear, it had access to the power to examine the other large investment banks books and run stress tests. It was not good news, all were vulnerable to runs and the Fed pushed all firms to increase their funding or raise capital.

In a crisis, the policymakers must have an attitude to do whatever it takes. We all felt extraordinary times justified extraordinary actions. This lead to the nationalization of Freddie and Fannie. They had hoped it would show the markets that the government was willing to prevent chaotic failures and the result would calm the markets. The markets concluded there was more uncertainty and would happens if a business does not have federal charters? Fear continued.

Linking to dividend paying stocks, one of the reasons you invest in these stocks is they have been through many economic cycles and they have cash and credit in the bank. This credit allows when a sector or competitor has a crisis, they can buy assets at reduced prices and merge them into the company to produce continuing profits. Crisis happen, companies will the ability to access credit can capitalize on it, but only if it has been through the business cycles. As investors, hopefully the crisis does not affect you, but your company can broaden its size and scope at low prices. In the last crisis what did the company do?

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

In all aspects of life, we hope to learn something because the definition of insanity is to the same thing over and over expecting a different result. If we actually learn something perhaps we can do it better next time. In the world of investing, the best investors have also lost money, no one is perfect, but the more you learn the less you will fail. However somewhere along the line, you will likely made a significant win and then you invest with more money. On the stock market all companies start the day with the same advantages – quarterly and annual reports are made available to the investing public. Many stories are told, some of them are better than others but storytelling is the key to attract multiple numbers of people to buy the stock. If an investor looks back over the years, they will likely same losing money helped me understand the functioning of the markets and over time I learn and prospered. For a new investing, while not encouraging anyone to lose money, if you lost money and learned something important, then it may be worth losing money. If you lost a lot a money it might be a crisis.

In a book called Firefighting – The Financial Crisis and its Lessons written by Ben S Bernanke, Timothy F Geithner and Henry S Paulson published by Penguin Books, NY, 2019. The book offers lessons from a crisis. The 3 authors were the lead news daily in 2008 through 2010 as the financial industry went through losses, destabilization, recession and recovery. The 3 people had to come up with a variety of tools to fight the fires and to allow for recovery. In all industries including finance, regulations are there for the last crisis not the current one. If the crisis is worse this time, the regulations are less effective because all industry change from the last crisis. Finance is always a little different because much of finance is about confidence. Banks lend money, they have to have a level of confidence the counterparty will repay. When the confidence falls, investors run will their money to something safer. When money goes to something safer, it effects regulatory levels.

Not surprisingly, the 3 authors noted the system is more complex than ever and when they tried to do something, they quickly realized the tools in the toolbox were not sufficient for the job and needed to persuade politicians to give them better tools.

In the financial world, too much debt is the biggest problem. The debt is tied to leverage and leverage is the double edge – leverage can increase both positive returns and negative losses.

The basic vulnerability of the financial system stems from the fact that banks provide 2 important economic functions that occasionally come into conflict. The banks allow people to place their money that provides safety and higher interest rates than leaving your money in your mattress; then they use the money to provide loans to finance riskier investments in homes, cars and businesses. In other words, they borrow short-term and lend long-term a process known as maturity transformation. The problem is even if a solvent bank, with assets more valuable than its liabilities, can collapse if those assets are too illiquid to cover its creditors’ immediate demands for cash.

The US has tried to reduce this risk regulation that limit the risks banks are allowed to take, coupled with government-provided insurance for depositors that reduces their incentive to run if their banks seem unstable.

Every financial institution can function without confidence, and confidence is evanescent. It can go at any time, for rational or irrational reasons. When it goes, it usually goes quickly, and it is hard to get back.

The 3 authors are remembering how the system where it was: with the benefit of hindsight. it is clear that the government failed to rein in the excesses that would help spark the crisis. For example, that the government let major financial institutions take on too much risky leverage without insisting that they retain enough capital, the flip side of leverage; the more an institution relies on borrowing, the lower its capital levels, and the greater its exposure to shocks. Capital is the shock absorber that can help an institution withstand losses, retain confidence, and remain solvent during a crisis. At the time, banks were easily exceeding their legally mandated capital requirements, and regulators did not think they could demand that they raise more.

It would later become clear that the backward-looking capital regime for banks, designed to protect against the kinds of losses created by relatively mild recent recessions, was not conservative enough. Regulators allowed banks to count too much poor-quality capital toward their required ratios, rather than insisting on loss-absorbing common equity. And supervisors failed to recognize how much leverage banks had hidden in complex derivatives and off-balance vehicles, which made them look better capitalized than they actually were. And most bankers were overconfident as their clients about risks in the housing market.

And the most damaging problem with America’s capital rules was not that they were too weak, but they were too weak and applied too narrowly. The institutions with the most reckless mortgage-related investments and the least stable funding bases also had the thinnest capital buffers, but they were operating largely outside the reach of the regulatory system.

The 3 of us learned, that reform is extremely tough to achieve without a crisis to make the case for it. Fannie Mae and Freddie Mac owned or guaranteed half of the residential mortgages in the US. We believed they were seriously undercapitalized and under-regulated. Market participants assumed the government that chartered them would rescue them if they ever got into trouble, so the companies felt safe piling up leverage. (there is a line in the movie – The Big Short – the Brad Pitt character says to a hedge fund client trying to short the market, if you right then everyone in the US will be losing money on their residential real estate, the US will be in a recession, do not be too happy). Just about everyone in the US was on the other side of the equation including regulators.

Linking to dividend paying stocks, the reason to initially buy the stocks is for defensive purposes, the companies have been through many economic cycles and continue to make profits. The fact they continue to make profits allows them to trade at higher multiples or the stock prices tend to increase overtime. We all have an expectation of some sort of balance in the economy tills it is not there, but we never are positive what sector will be affected. Once the sector is affected, we realize the economy is very interconnected and what we believe are regulations to protect everyone are not as strong as we hope. Dividend stocks prices will fall, but they tend to bounce back faster as the economy does recover and along the way dividends are still being paid.

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

When the world was in COVID shut down, very few people travelled. When the restrictions were lifted, the travelling public has regained its pre COVID numbers. For anyone who has travelled, this is good. When you were travelling, you needed oil or gasoline to move about. During COVID, all the share prices for oil and gas companies fell and have since regain their previous positions and when the commodity price of oil goes up, share prices go up. The world still needs oil and gas. The biggest oil and gas company in the world is Saudi Arabia’s Aramco.

The easiest place to drill oil and gas in the world is still Saudi Arabia because of the very rich oil pools that cost less than $5 to drill. This has made Aramco – long a cash cow for the Saudi state.

In an article by Yousef Saba, Hadeel Al Sayegh and Maha El Dahan of Reuters, Saudi Arabia’s sale of shares in oil giant Aramco drew more demand that the stock on offer raising up to $13.1 billion. Aramco is selling 0.7% of its shares. The Saudi government directly holds just more than 82%, PIF (Public Investment Fund) owns 16%.

The world’s top investment banks are helping to manage the sale – Citi, Goldman Sachs, HSBC, JPMorgan, Bank of America and Morgan Stanley. In addition, local dealers in Saudi including Saudi National Bank, Al Rajhi Capital, Riyad Capital and Saudi Fransi are involved. Besides the big investment banks, Credit Suisse Saudi Arabia, BNP Paribas, Bank of China International and China International Capital Corp are seeking buyers for the shares. 90% of the shares were allocated to institutional investors and 10% to retail investors.

Saudi Arabia is producing about 9 million barrels a day of crude or 75% of its maximum capacity.

Linking to dividend paying stocks, as long as people have a desire to see the world or at least travel from their home location, there will be a need for oil and gas. With all commodities, supply and demand play a keep role, but if you can a low-cost producer which allows that even when prices fluctuate the company still makes money, it is definitely worth examining and investing in. Those are the type of companies you can buy and hold for a long time while you enjoy the dividends/

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

Every large city develops a reputation for particular services and for a while they are a hub for that service, but it is never guaranteed. The clearest example is London, England before Brexit, London was the center for the financial industry, but the voters of England voted, and then alternatives seemed better.

In an article by Eshe Nelson and Michael J De La Merced of the New York Times News Service, London used to be recognized as the center of the finance world, but things have changed. By many measures, London is still a crucial financial hub, where prices are fixed every day for precious metals, trillions of dollars of foreign currency are traded and global insurance contracts are written. But, the global competition among cities such as New York, Hong Kong, Dubai, and Singapore is intense.

Amsterdam overtook London as Europe’s largest share-trading center according to Cboe Capital Markets.

In 2023, in New York 16 companies went public down 84% from 2022, in comparison to London 10 companies went public down 88%. In New York companies that went public raised $9.5 billion while those that went public in London raised $442.7 million according to London Stock Exchange Group data.

In New York, the magnificent 7 have led the markets, the mag 7 are tech companies. In London, the vast majority of companies are banking, mining and oil and gas with few tech companies. The British government has introduced reforms to make it easier for tech companies to list.

One tech company that is looking to go public in London is Shein, an online retail giant founded in China. It was going to go to New York, but geopolitical actions between the US and China made Shein look for alternatives such as London.

Linking to dividend paying stocks, companies are forever looking for the best place to list their shares to take advantage when stock prices go up and it makes sense to issue new shares. Just like every other industry, the companies which own the stock market have to adjust to the changing economic landscape of companies. All companies need access to capital to grow and all industries have companies known by their reputations. Are the companies that you own, reputation continue to be valid?

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