As a general rule, no one really wins in a war. Every war has fallout both for the people fighting the war and those that try to keep the economy going or not on the front lines. There may be very good reasons to go to war, but unless the war is short, no one really wins.

In an article by Roni Rabin of the New York Times, Israel and Hamas are at war and Hamas is in the middle of the Palestine people. People have died on both sides, people have been displaced on both sides and normal life has been disrupted, more on the Palestine side, however this article focused on Israel.

Israel’ ‘s economy depends on tourism and it has come to a virtual standstill.

In a war, government spending jumps.

Israel’s technology sector has been the engine for Israel’s growth and accounts for almost half of the exports and 1/5 of the economic output according to the Israeli Innovation Authority. In Israel all men and women have to do military duties and then they are in the reserve. 350,000 reservists have been called up for duty.

Many customer orders were put on hold or cancelled outright. While the war is on, foreign investment or investors are waiting till the war is over. The Israeli Innovation Center has $100 million to support technology companies particularly startups that have lost funding.

The Bank of Israel has cut interest rates by a quarter point to 4.5% and the Governor of the Central Bank Amir Yaron expected more cuts in the future. The war will cause higher deficits and more public debt.

The government is planning to increase the number of foreign workers from 50,000 to 70,000 because of worker shortages. Workers from West Palestine have been banned from working in Israel.

Linking to dividend paying stocks, if your investments are located outside of the US, sometimes that is wonderful and sometimes it is not good. There are some companies than benefit from products to wars but for most peace is better for in war there is always a toll to be paid and it takes time afterwards to become normal again. What are the contiguity plans for your company?

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

In 2023 if you owned big tech or some or all of the magnificent 7 companies the assets under administration in your portfolio went up. In 2024, big tech is likely to go up again, but will it go up at the same percentage levels? no one knows, which means there might be other sectors that could go up or which sectors offer value?

In an article from Reuters, one area that underperformed in 2023 was healthcare. In the S&P 500 index healthcare has about 13%.

Why might the index go up? The exciting news of the weight loss drugs from Novo Nordisk and Eli Lilly. If the drugs work well as hoped people will be healthier and there may be fewer obese patients. The amazing surgeries doctors can do to treat people will make an even better difference.

Health care was trading at the middle of January at 17.9 times earnings versus the index of 19.7 times or a discount of 9%. Historically the difference is a 4% premium according to data from LSEG Datastream. If things are normal, at least a 10% rise is possible.

Will the rally that boosted tech and growth stocks broaden to include more sectors including healthcare?

Healthcare stocks tend to struggle in an election year, because politicians started pointing to health care as a big expense, they say they will lower the costs. However, this year some investors believe there is less risk because no one is proposing big policy items and no party is expecting big gains in Congress, diminishing the chances of any legislation to overhaul the industry.

Healthcare deals in big data, will AI help to lower costs and help make better companies?

Linking to dividend paying stocks, during election years some sectors are painted with a broad brush because politicians have to appeal to a broad number of people to win and often health care and insurance is added because we all need them, they all tend to raise prices. However, since we all need them, it makes the companies profitable to pay dividends and that you can enjoy. One method to investing is examine the companies you pay bills to see if they are worth investing in. If yes, as long as you are a purchaser, you can keep your eye on the company to ensure they give value.

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

In the movie The Graduate starring Dustin Hoffman and Anne Bancroft has memorial lines and scenes which are often repeated. One of the lines is Mrs. Robinson are you trying to seduce me? the another line is Mr. Bancroft tells the Dustin Hoffman – the future is plastics. The plastics comes from the chemical industry world and in many ways the line was true. To use less weight, plastics were invented and are used in many manufacturing industries, that is the good part. The non so good part is for chemical companies what did they do with the wastes from plastics and other chemicals used in our present lives?

A book called Paradise Falls by Keith O’Brien published by Pantheon Books, New York, 2022 shows chemical companies often dumped the wastes into the waters around the planet or put the wastes in drums and buried them. Out of sight out of mind was an accepted solution. The problem was not right away but over the months and years, the drums or containers broke down and then whatever was in the barrel flowed the same way water flows underground. The difference when water flows underground it may cause flooding, but that be mopped up or protective measures around homes to prevent the flooding. When chemicals flow the way water does – the chemicals will eventually get into the body and caused multiple reactions and 99% plus are not good. Children and pregnant mother’s are affected first, then anyone with lower immune systems and eventually men and older women. The chemicals take time to develop in the body and often are diagnosis as something else because we all think we are living reasonably normal lives. Then within a few years multiple people within the area are having medical problems higher than normal or clusters and people investigate to the why?

In the book, the area that is focused on is Love Canal in Niagara Falls, New York. If you ever been, the town was a working-class town because the companies that made products from chemicals and the biggest city nearby is Buffalo. To make chemicals relatively low cost energy or hydro electric power is needed, Niagara Falls has the falls for electricity. A working-class town tends to mean that people have income but not high savings which limits their ability to move or they accepted the employers not being environmentally correct and go about their regular working lives.

In this case, the company buried drums of chemicals in a partially build canal system, which years later was filled with dirt to stabilize the land, eventually a school and a neighborhood were developed on top of it. From the surface the area looked like a good neighborhood to raise a family. Under the surface, the chemicals leaked from the drums and flowed underground similar to water patterns. If your home was above the canal or one of the old stream beds, your health was going to be worse than a neighbor a few houses over.

In the book, most of the data was being organized and collected by women, the decision makers were men. In all worlds, there is a bias, women have to better data than men, otherwise men will ask for more studies done by what they feel are organizations will a long history of studying the problems. The issue in Niagara Falls what should governments do and who should pay? The easy answer and the reality of the answer was to move everyone to other neighborhoods and ensure no one uses the land, till it is cleaned up. The harder answer is time frames, the book starts in the mid 1970’s people are living in single family dwellings and children going to school, by 1983 the school was taken down and people had left both where the canal was and where the old streams flowed. Getting to the end was a very long process to both recognize the issue and to have decision makers allocate enough money to find solutions, both easy and hard. In Washington, the rise of Superfund Act to clean up environmental dumps rose from President Carter’s administration in 1980, because in many places in the US chemicals were buried, just most did not become subdivisions.

Linking to dividend paying stocks, some chemical companies are some of the long-term payers of dividends and without their products the world would be different. However, with their products, what happens to the waste is a good thing to know. Sometimes new industries can be formed to find solutions to the wastes, but usually they are not as profitable as the maker of the chemical because of the barrier to entry cost. As a dividend buyer your big interest is the profitability of the company and hope with all the engineering talent in the company solutions are possible.

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

In investing there is always the hype of future great things or the next great thing to bring in easy dollars. As today is Valentine’s Day, there is also much hype in romance, but it is hoped you find and keep the long-term lasting relationship variety. One of the reasons there is hype is society changes and as society changes some of the things that were not allowed, or honest decent people did not do in public are now okay to do. It does make society better or worse, just changed and with change becomes a potential opportunity to cash in. In the last few years, we have seen changes in marijuana or cannabis laws and the startup of new companies. The same thing happened with betting on the internet. Previously, you needed to go to Las Vegas or have a bookie at a bar or something of that nature, now governments are encouraging gaming for potential tax revenues.

In an article by David Parkinson writing an opinion in the Globe and Mail, Pennsylvania based Penn Entertainment Inc has long run casinos and horseracing tracks, but during COVID when people had extra time and money to gamble, pushed into online sports betting as governments legalized the activity. Penn Entertainment bought Score Media and Gaming and Barstool Sports.

The shares have fallen 82% from their highs which means a hedge fund is on the prowl to increase share prices. In this case, in a securities filing HG Vora Capital which owns 9.6% of the shares wants management to do something to increase the share price. One suggestion is to change some of the Board of Directors of Penn with people affiliated with HG Vora Capital.

Initially Penn Entertainment bought minority stakes in Score Media and Barstool Sports to test the waters, then they bought the rest of the companies, but they do not show good results.

Penn paid $163 million for 38% of Barstool, later it paid $550 for the remaining part. In August 2022, Penn decided to partner with ESPN and sold the company back to the original owner for $1 plus 50% of any proceeds from a future sale of Barstool. The agreement with ESPN is $1.5 billion for marketing and media rights.

For theScore, Penn paid $2 billion for the app, half in cash and half in shares. The intention was to expand theScore across the US, but it was decided to shut down the US business to go with Barstool Sportsbook which no longer exists.

For theScore, the app had 3.6 million users when Penn Entertainment bought it. Penn had thought that as an owner of casinos some of the people would use their products but that did not happen and 73% of users were already in the ecosystem – checking scores and reading sports news.

Across the US, Barstool had a 1.9% share as of last spring. Essentially the company has spent $4 billion on sports betting with little to show for it. David Katz, an analyst at Jefferies wonders How are you going to show a return on that?

The competition is not doing much better, Wynn Resorts has pulled out of 8 states because of the money to acquire and retain customers or outsized marketing spend. (some of the money is seen if you go to or watch professional sports on TV, you will notice the advertising). Two other rivals FanDuel and DraftKings have lost a lot of money, DraftKings has lost $4.8 billion since 2020. The good news for them is their names has brand recognition and they are losing less money.

Linking to dividend paying companies, there is money to be lost on hype and a little to be gained. For the most part if something is hyped, watch it from a distance because what goes up will come down and then when companies actually make money, they may go up again. If you spend on the hype, ensure you have a very good idea when you to sell or it will be a long-term holding to try to get you money back. The good news with dividend paying stocks is you are expecting it to be a long-term holding so having patience is a wonderful thing.

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

S

In financial planning myth there is a level of money which if people had they would not go to work and many people strive towards the number. What number in the bank and investments would you need to retire? There is no perfect number, but it generally depends on the cost of the lifestyle you presently enjoy. In reality people live on the lowest levels of government assistance as their prime income. Often in the financial papers you will see formerly very well-paid people – moving to another position. What is their motivation? for at the income they received they should be able to retire.

In an article by Michael M Grynbaum of the New York Times News Service, Jeff Zucker the former CNN president and one time executive producer of the Today Show is investing in Media Res through RedBird IMI. Mr. Zucker founded a private equity firm called RedBird Capital. The company teamed up with Sheikh Mansour bin Zayed aal Nahyan, an Emirati royal to form RedBird IMI. The company Media Res was founded by Michael Ellenberg who is also the CEO.

RedBird IMI has invested in a sports news platform, a documentary studio, a children’s entertainment company and is making a bid to buy The Daily Telegraph in London, UK.

Mr. Ellenberg said Mr. Zucker’s investment will allow him to hire more people and expand the studio’s domestic and international production slate. Media Res biggest TV show is the Morning Show on Apple TV.

Linking to dividend paying stocks, people buy dividend paying stocks for all types of reasons and having regular income is the key. Ideally in your life you will have options – whether to work, have projects around the home, take longer time off, and enjoy life with the income you receive. Although in every area of the world there are stunning things to see for free thanks to the beauty of nature, it is always nice to have extra money in the account.

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

In the world of CO2 emissions, the easiest way to drop emissions was for an economy to go into recession. If you compare the emissions during the yeas of COVID, emissions were down but it was a heavy price to pay with many people needing government assistance to live their lives. For most people going through a recession is not a good way to cut emissions and ideally should be avoided and there should be a better alternative.

In article by Geir Moulson of the Associated Press, the largest economy in Europe is Germany and carbon-dioxide emissions fell to its lowest levels in 7 decades. Germany aims to go closer to 0 by 2045, but it has a long way to go.

The Agora Energiewende think tank showed Germany emitted 673 million tonnes of CO2 last year a decline of 73 million tonnes. The figure was 40% lower than one in 1990.

Renewables of solar and wind accounted for half of the country’s energy production up to 56% of energy production up from 47.2% in 2022. Electricity made from coal dropped to 8.9% from 12.8%. Nuclear power was 1.5% down from 6.7% as 3 nuclear plants were shut down.

Germany is home to many energy intensive companies including chemical and metal industries. Germany’s economy also has done well because of high energy prices, global economic weaknesses and interest rate hikes to fight inflation.

Agora calculated that only 15% of last year’s emissions savings constitute permanent emissions reduction resulting from additional renewable energy capacity, efficiency gains and the switch to fuels that produce less CO2 or other climate friendly alternatives.

Economy and Climate Minister Robert Habeck, a member of the environmental Green Party who is also Vice Chairman, said Germany has laid the foundation for future growth in renewable energy by moving to expand solar and wind generation. We are making visible progress on the road to climate neutral electricity supply.

Linking to dividend paying stocks, governments can and will make policy changes for what they believe is best for their countries, often times there are delays between the actual and ideals the governments want to achieve. It is possible to agree with the ideal, but the importance is how the government wants to get there and what incentives they allow for people and companies to adjust. It is never a straightforward line, but many dividend paying companies have adjusted in the past and as an investor you need to believe they can adjust in the future.

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

Every year analysts offer the outlook for the economy in general and it is updated every day and every quarter to does the company meet expectations. It is a challenge to do consistently because of change in the world, there is always something to react to. If expectations are not met then the stock price will fall and people will decide if the management is doing the right thing or not. The stock market being large means if the stock price falls, various hedge funds will become large buyers to enhance values. If the company meets and exceeds expectations, more individuals will be buyers because they see hope for the future.

In an article by Caroline Valetkevitch of Reuters, the big expectation for 2024 is the federal reserve will cut interest rates as inflation has slowed. However analysts worry about slowing economic growth.

S&P 500 earnings are expected to rise 11.1% after a slow rise of 3.1% in 2023. However analysts believe earnings have to rise because according to LSEG Datastream data the market at the end of December was trading at 19.8 times forward 12-month earnings versus the normal 15.6 times.

The markets ended December with a rally and within striking distance of its all-time high finish. The S&P 500 rose 24.2% for the year. (if you owned energy and big tech, you did well).

Sameer Samana, senior global strategist at Wells Fargo Investment Institute noted the market trading at its current levels demands earnings to show strong growth in 2024.

Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas noted besides the consumer seems to be healthy, inflation getting better, employment is still strong, interest rates going down, many companies have streamlined their businesses and margins are decent. (in other words companies cut costs and kept good margins).

Linking to dividend paying stocks, in general when interest rates fall, companies which pay dividends are more competitive with other companies for the dividend either stays the same or ideally grows. In addition, possible capital gains are expected because they are able to keep their margins through the cycles to earn profits to pay dividends. It should be a good year.

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

We are all aware the economy is changing or slowly changing from an oil-based economy to one that runs more on renewables. In some places the desire to change is ahead of the reality, and that includes the country of United Kingdom or Britain.

In an article by Eshe Nelson of the New York Times News Service, a startup company has done research and wants to expand by manufacturing their product, a classic hopeful success story. The company called Paragraf, makes chips using graphene and can check for defects in electric vehicle batteries to prevent fires and other uses. The company identified a need and decided to ramp up production from thousands to millions. That is the good news.

The bad news for the company to uses its existing facilities, the cost to bring electricity to the site was going to be $1.5 million. Why, because Britain’s electrical grid is behind the times as a result of years of underinvestment.

The politics said they will need relatively low-cost electricity to move off the use of oil, as a general statement people can buy into it. Companies investing in solar power and wind farms have done a good job, but the reality is the low-cost electricity has to brought to urban areas and that is the problem. The planning and grid up grades needed are block by a system which gives considerable power to local planning authorities and who wants to look at a tower system in the country?

In Britain they have the National Infrastructure Commission which advises the government, offered greater incentives to local planning authorities which can approve the infrastructure upgrades. Will it work? no one knows, but it is a start.

Jeremy Hunt, the chancellor of the Exchequer (Budget Chief) said planning and grid reforms are 2 of the most critical changes in the budget to revive growth.

The opposition Labour Party’s Leader, Keir Starmer, the party will bulldoze through Britain’s restrictive planning system to get the grid moving. (note most of Labour support is in the urban areas).

The company, Paragraf, decided rather than wait for an upgrade by local council paid the $1.5 million to a grid operator to upgrade the building. The company based in Cambridge, England wanted to stay and grow in England as opposed to moving to the US with the help of the CHIPS Act.

Linking to dividend paying stocks, in all countries around the world there usually is a difference between what the politicians talk about and the reality of the situation, fortunately profitable companies tend to have the choice of waiting for the government or moving without them. All companies work with governments of all stripes and sizes, but sometimes all they want to do is carry on with their work. For your investments, what is the difference between government speak and reality on the business world?

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

In every sector there are lists and some of the lists people are more interested than others. Once you have accumulated savings, hopefully it generates income, dividends and capital gains and you can decide what you want to do with the money. Some you will reinvest, some you may live off and some you may give to a charity or charities of your choice. Recently one of those lists was in the press.

in an article by Maria Di Mento of the Associated Press, one of the lists connected to giving away money is the Chronicle of Philanthropy, it totaled more than $3.5 billion given away.

Topping the list is Warren Buffett, he moved 1.5 million shares of Berkshire Hathaway Class B valued at $541.5 million to the Susan Thompson Buffett Foundation. The foundation which includes 2 of his children and a son-in-law on the Board. The foundation provides scholarships in Nebraska and backs women’s reproductive health.

James Simon besides being a mathematician founded Renaissance Technologies hedge fund which has done very well every year. He and his wife through their foundation gave $500 million to the State University of New York at Stony Brook to boost scholarships, professorships, research and clinical care. Mr. Simons taught at the University and Mrs. Simon has earned 2 degrees.

Ross Brown, the founder of Cryogenic Industries pledged $400 million to the California Institute of Technology. The money will launch the Brown Institute for Basic Sciences.

Nike co-founder Phil Knight and his wife, Penny, pledged $400 million to the 1803 Fund. The fund will help redevelop the area of Albina which is in the Portland, Oregan area. The area was previously a thriving black neighborhood and has fallen in economic viability. The money is coming from the Knight Foundation.

Dan Gilbert and his wife, Jennifer, gave $375 million through their Gilbert Foundation to Henry Ford Health to build 2 medical centers. Dan Gilbert founded Rocket Mortgage and is Chairman of the Cleveland Cavaliers basketball team. One of the centers will focus on rehabilitation particularly those with little or no health insurance coverage. The other center will focus on research including neurofibromatosis which inflected one of their children.

Kenneth Griffin of hedge fund company Citadel LLC, gave $300 million to Harvard’s Faculty of Arts and Sciences for financial aid to undergraduates.

Mr. Griffin partnered with David Geffen to give $400 million to Sloan Kettering Cancer Center.

The Chronicle’s annual rankings are based on publicly announced gifts. In March, the list will include total gifts in 2023.

Linking to dividend paying stocks, when you have surplus income and can donate it you can donate whichever way you wish. It is noted most of the money donated is because the donor has a personal reason to help. All of us are interesting people, but it is often some organization has helped somebody we know over the years, for example when my father was in a long-term care in a hospital, a group gave PJs to the residents as a one-time gesture. My parents appreciated the gesture and a few years later when my surplus was able to cover it, I teamed up with a local organization to continue the giving. The local organization gets the publicity. There are many great causes to give, ideally the investments you make allow you to consider giving.

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