If you think about the war in Ukraine and Russia, it has changed warfare because of the use of drones. Drones can carry bombs and fly past boundaries and if they are shot down, others can be launched. The system to guide the drones is available to both sides of the war and both sides have ramped up production of drones. The same drones can be and are being used for other types of wars around the globe. If you look at the globe and consider it from a shipping point of view – given that the cost of moving goods over a long distance is cheapest on a boat or ship and over the past few years the ships have become larger and can carry more containers. Where are the pinch points in the global shipping traffic. The pinch points are 3 locations – the southeast China Seas where pirates have operated for centuries, the Red Sea going to the Suez Canal and the Panama Canal which is having water problems. The canal cannot handle the biggest ships which means the manufacturing supplies moving from China and India and other countries are going to Europe and then the US tends to go through the Red Sea – Suez Canal route.

In an article by Terje Solsvik of Reuters, in December the world’s top container shipping companies including Maersk and Hapag-Lloyd stopped using Red Seas routes after Yemen’s Houthi militant group began targeting vessels disrupting global trade. The Houthis were using drone attacks which a container ship cannot defend itself. But the world’s largest navy can – the US Navy and other European navies are now escorting ships though the Red Sea.

To avoid attacks, Maersk rerouted ships around the Cape of Good Hope or around Africa but fees when up and the time it takes for a ship to go around Africa and dock in Europe added weeks to the schedule on time delivery. The cost is $700 extra for a standard 20-foot container.

Linking to dividend paying stocks, for generations the interest of the country including commercial interests have been protected by the military of the country. It is one of the reasons why the seas have been relatively peaceful, and goods travelled throughout the world. To go against shipping is to bring the world’s navies as your enemy. Many dividend paying companies benefit from the interests of the country and the resources it needs to ensure a stable continuing dividend.

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

After having a brilliant idea to start a company and get it moving forward, eventually people have to be hired to ensure it runs smoothly. Some of the new hires will love what the founders of the company are trying to do, others hope for greater pay in the future and others are essentially there for a paycheck. Each of them has a different idea about their pay and future pay. None of them are necessarily wrong or all correct about their ideas, which is why companies can justify rather large bonuses to some and barely increasing wages for others. Sometimes the values conflict and there is a clear example using Tesla.

In an article by Melissa Eddy of the New York Times News Service, two different models are clashing in Sweden. Tesla has operations around the globe including in Sweden and they have brought their model and expectations to the Swedish workforce. The model includes 6-day work weeks, unavoidable overtime and an unclear evaluation system for promotion. This is opposed to the Swedish model which at is heart is co-operation between employers and employees to ensure both sides benefit from company’s profits.

The workers are on strike, but Tesla’s 10 service stations are still open, however there will be delays. The issue is the same as strikes around the world, business flexibility and agility.

It is noted, Sweden has some of the lowest levels of strikes in Europe, a little more than 2 working days a year lost to strikes and lockouts per 1,000 employees from 2010 to 2019. The comparison is 55 in Norway and the leader is France with 128.

On the face, if the company is still operating when on strike, that is good for the company. In Sweden, there are something called solidarity strikes. Under Swedish law, if a union calls a solidarity strike, its members have to go along with it. This means firms with no direct stake in walkout, such as independent auto-repair shops, have lost business because they have collective agreements with IF Metall that require them to turn away business related to Tesla. Unions in other areas have rallied with IF Metall, such as dockworkers stopped unloading Teslas arriving by ship; workers have quit delivering Tesla’s mail; electricians have pledged not to repair the charging stations.

In Sweden, the Tesla Y is the most popular vehicle with over 14,000 sales in Sweden in 2023, according to official statistics.

Linking to dividend paying stocks, all companies making a profit have workforces and they treat them the gamete of management-worker relationships, as an investor you have determine if you like what management does. There are some companies that are anti-union, there are some companies that are pro-union; and there are others who are in the middle. Some years ago, there was a company which regularly shut down operations to ensure people missed x amount of time and not qualify for pension benefits; in companies in the past, management was in the pension plan benefit from time of hire, workers had a 2-year waiting period and the plant not to shut down for longer than 6 months. All of that exists and there have been many examples of great management-labor relations and on the other side. As an investor you get to choose what you like or would prefer.

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

When you buy shares in a company, one of the aspects is you become a voter which includes voting at the AGM for executive compensation. The vote means you should be aware of who the people are and potential successors. And this is the reason why the business news often highlights when companies change CEOs.

In an article by Ron Bousso and Sarah McFarlane of Reuters, the biggest oil company in the UK or BP is going through a new CEO process. Bernard Looney was the CEO but resigned for not disclosing a relationship with a employee and leaving no clear succession plan in place. The reality is one of the most important roles of any CEO is to create succession plans for the top executives and themselves. Not having a succession plan takes time and effort to fix and that has been part of the job of interim CEO Murray Auchincloss.

In every company, there is a people and governance committee, in BP the Chairman Helge Lund is now focused on 3 internal candidates, all members of BP leadership team. The committee is also considering external candidates. An internal appointment would signal board support for continuing BP’s current strategy. An external appointment may mean a new direction, for they tend to bring in new people to the leadership team.

Everyone on the leadership team has pros and cons and some have responsibilities that include working with outside investors, and they are more known people to analysts.

Linking to dividend paying stocks, while sometimes the thought is every company can operate on autopilot, the reality is companies are run by people. Every company has a website and that includes the CEO and leadership team along with their bios are on the website. If you buy shares in the company, you may get to meet them or hear them, and they are the people who make profits which pay dividends to you. While you are investing in a company, you are also investing in people.

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

As an investor, you are buying ownership into a company and the rules are relatively simple – upon owning shares you can vote at the AGM, if the company makes a profit as a shareholder you can be paid dividends, but if the company does not do well, as a shareholder the debt is paid off first, then preferred shareholders and finally your shareholding. In the process there would likely be a vote to inform you of how much you are getting per share. The rules of ownership are defined and that helps ensures a steady stream of investors into buying shares. Have you ever thought about how ownership works in other areas of your life?

In a book called Mine! – How the Hidden Rules of Ownership Control Our Lives by Michael Heller and James Salzman, published by Doubleday, NY, 2021, the authors who are professors of law wrote about how ownership works. The reason you need to know or want to know about ownership is the rules change which creates winners and losers and there are always competing claims to scarce resources.

The book has 6 chapters and depending on the types of stocks you own, some would be more interesting to you than others for there is ownership in all aspects of our lives including many commercial transactions.

One of the chapters is called First Come, Last Served because in many areas of life there are scarce resources. For example, millions of people go to a Disney Park every year, if you never been it is worth it. One of the aspects of going to a popular park is lineups. If you are in line, you are not on a ride. Disney has experimented what to do about lineups and has a solution. For extra money you can pick a fast pass for 5 rides or you do not have to wait in line. The advantage for the consumer is for some rides no lineups; the advantage for Disney is happy customers who tend to stay in the park longer and by staying in the park longer, there is extra spending on convivence items.

Another chapter is titled I Reap what You Sow. This chapter discusses ownership is a social engineering choice, a conclusion we come to, not a fact we find. First we decide the goals we want ownership to achieve. Next we decide what means will most likely get us there. Fincally we affix the legal term owner to the sum of this hidden value judgements and empirical guesses. Ownership is the endpoint, not the start of the analysis.

An example of the above is the Homestead Act. The government wanted to settle the land west of the Mississippi quickly, visibly and at a low cost. The solution was to give land of 160 acres of public land to any adult citizen who live on and improved it by clearing fields, building a dwelling, and cultivating the land for 5 years. Roughly 270 million acres or 10% of the American west was transferred from the public to private domain through homesteading.

The General Mining Act of 1872 worked in a similar way. It allowed citizens and companies to stake claims on public lands. Prospectors needed to search for valuable minerals, prove a discovery, and put in at least $100 worth of labor or improvements annually. If they did, they owned the minerals below and sometimes the surface land above. Mining companies today mine those claims and pay almost nothing in taxes.

Another chapter is My Home is Not My Castle. When you buy property, you are essentially buying an attachment or the surface property. You do not own up to the sky or the minerals underneath and for the most part it did not matter. The boundaries of attachment are constantly changing – can a drone fly over your property? if a treasure was found on your property is it yours? if you have solar power, how high can the neighbor’s trees be? how much water can you take from the water source? In the later segments, often the rules come when the resources are in abundance so everyone can have what they want. When the resources become scarce, what to do?

One of the reasons why the oil industry does not have the conflicts water does is they use the principle of unitization, a new form of oil and gas ownership designed to collect together overly fragmented interests. In short the unit operates the field to create the biggest possible pie for owners to split.

It is noted, Texas does not require compulsory unitization- so they are mointored by the Texas Railroad Commission. The commission sets proration rules or production caps for individual owners each month and it enforces well-spacing rules.

In a chapter called the Meek Shall Inherit Very Little, after the Civil War, General Sherman promised freed slaves 40 acres and a mule. By 1920 almost a million Black farmers owned farms they have bought and this help the economy. In 2020, black farmers own fewer than 19,000 farms a drop of 98%. There are many reasons but obscure family ownership rules played a rule. One example is a farm through multiple generations was owned by a lady and 66 other family members. The lady with the largest portion wanted to sell 50% so she would own the farm free and clear. The court agreed but not by dividing the land by the judge ordered the entire lands to be sold and divided among the heirs. On the day of the sale, a lumber company made a low-ball cash bid for the rules say the bill must be essentially all cash. The heirs did not have the money to up the cash bid, but had valued the farm higher. The farm was sold to the lumber company. The family received cash but not enough to buy a new farm. For the courts, administratively money is easier to split.

One of the issues in the above is many Black families have no wills and because they have no wills the property is split among the remaining hiers, but to operate a farm decision are needed to be made with unanimous consent. An interesting fact is there are more land in Mississippi is owned by black people living in Chicago than by those living in Mississippi.

Another story is about South Dakota. In the late 1970’s, Citibank as losing money on its credit card division because of the low interest rates it could charge. The Governor made a deal with Citibank, come to the state and bring the 400 jobs and you can charge whatever you want. Citibank came and so did every other national credit card company. If you see a different address, the state has matched South Dakota.

The Governor of South Dakota wanted to help wealthy people turn their assets to the next generation with no tax. The Governor has the rules against perpetuities for assets nominally held in South Dakota trusts. Over the years it gave the wealthy whatever they wanted in terms of banking secrecy and avoiding inheritance taxes. South Dakota trust companies went from $60 billion in assets to $350 billion and competes very well against Switzerland and the Cayman Islands.

There are many other stories in the book and what is important is ownership can and does change from what you think it means to something else.

Linking to dividend paying stocks, all companies are founded on a rules they have ownership of a good or service and make margins to pay profits and eventually dividends. The rules evolve over the years which is why as an investor you will like the status quo, it benefits you. When there are changes as society changes, some you will like, some you will not and some will affect your interests and maybe your dividends.

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

As an investor, you are buying ownership into a company and the rules are relatively simple – upon owning shares you can vote at the AGM, if the company makes a profit as a shareholder you can be paid dividends, but if the company does not do well, as a shareholder the debt is paid off first, then preferred shareholders and finally your shareholding. In the process there would likely be a vote to inform you of how much you are getting per share. The rules of ownership are defined and that helps ensures a steady stream of investors into buying shares. Have you ever thought about how ownership works in other areas of your life?

In a book called Mine! – How the Hidden Rules of Ownership Control Our Lives by Michael Heller and James Salzman, published by Doubleday, NY, 2021, the authors who are professors of law wrote about how ownership works. The reason you need to know or want to know about ownership is the rules change which creates winners and losers and there are always competing claims to scarce resources.

There are common maxims about what is mine. The most common are: first come, first served; possession is 9/10’s of the law; you reap what you sow; my home is my castle; our bodies, not our selves; and the meek shall inherit the earth.

The above are true, but are really only work when there is a binary view of ownership – we feel something is either mine or not mine. In an agrarian society most of the conflicts was about land.

In the 20th century, the most pressing ownership debates was between private and public control.

Presently the debates are shifting again, many of the pressing issues are concern the claims of one private owner against another – mine versus mine.

One example of the about is if you have flown lately, after the plane takes off, many people like to put their seat back for comfort. The first issue is how much should the seat go back and not interfere with the person behind you. Similar to most things on an airline, there are economics involved – the pitch used to be 35 inches airlines are shrinking that to 31 inches and some to 28 inches. For every inch of pitch saved per row can add up to 6 extra seats per flight to sell. To grow profits, airlines are squeezing more people into the plane.

The airline technically sells the seat which comes with space for your legs as well as selling the same space to the person in front of you to recline. What is the solution – most people fall back on politeness and good manners, but the reality is the control is the person with the button to recline.

When industries change, does ownership change and how does ownership change? For example, if you click on line to buy, when does the item change ownership to you? It turns out, there is an increasing gap between what we feel like we own and what we actually own.

When does ownership begin? The reality is all property conflicts exist as competing stories. Each side picks a story that presents its claims as the moral high ground and each side wants ownership bent towards its view. There is no better or worse choice, just a choice and if you are not the one choosing, then someone else is making the choice for you. Ownership rules pick winners and losers in every imaginable setting or there will always be conflict about ownership and either a regulatory body or court picking a winner.

As you look to 2024 and beyond and see companies that what to disrupt an industry, what they are attempting to do is change the rules on ownership, some you like, others you are not positive about, but the underlying strategy is to change ownership rules. If you read the book and consider ownership, often if you buy a company’s shares, you want the status quo, not change.

Linking to dividend paying stocks, when you buy these types of investments you know the rules of ownership and they are not changing. You buy the company shares because it makes a profit from the things it owns and has owned for years. There is little disagreement, what you company owns and sells to make a good margin and pay dividends.

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

When governments make decisions, often times businesses have to react to change and often it takes time to find alternatives. The alternatives are both short term which all large companies have plans for and long-term which everyone says they want to do but it is difficult to do quickly because of logistics and the resources required. Two years ago, Russia invaded the Ukraine and the western governments put sanctions on Russian goods and services including oil and gas.

In an article by Riham Alkousaa and Christoph Steitz of Reuters, Germany state-owned energy firm Sefe secured a $73 billion gas deal with Norway’s Equinor that will cover 1/3 of the industrial gas needs of Europe’s largest economy.

The deal strengthens Norway’s position as Germany’s top supplier of natural gas. Before the sanctions, Gazprom was the leading supplier of gas, now Norway accounts for 40-50% of Germany’s gas imports.

The supply deal covers about 10 billion cubic meters of natural gas per year from Jan 1, 2024 until 2034 and carries an option for another 5 billion cubic meters.

About 90% of the gas Sefe will get through existing pipelines are indexed on the TTF and THE gas-trading hubs to be available for the German and Dutch markets.

Linking to dividend paying stocks, all large companies have plans or alternatives if something goes wrong or situations change for the worse. In the case of the gas supply, it has taken 2 years to get another long-term supplier. It is always possible, but it takes time to change, however large companies typically have plans and ideas where to begin that many smaller companies would be flying by their seats, which allow the larger companies to retain their margins and stay profitable.

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

If you are interested in logistics, then 2 of the best companies to watch and learn from are Amazon and Wal-mart. If you are interested on You Tube, companies such as the Wall Street Journal videos can by found which are interesting to watch and there are others.

In an article by Haleluya Jadero and Anne D’innocenzio of the Associated Press, Amazon, Wal-Mart and Target are working hard to increase their shipping speeds to please shoppers expecting faster and faster deliveries.

Amazon is the fastest at speed of delivery followed by Wal-Mart, Target, Shein and Temu.

Amazon has a built in advantage over the others because of Prime membership. A customer pays $139 a year for free 2 day shipping and other perks. The way same day delivery works is Amazon stocks the top 100,000 products customers want in smaller distribution centers located in 8 parts of the country. The idea is have shipments travel shorter distances with fewer touch points, this speeds up delivery and cuts costs.

Before the changes, Amazon shipped everything from massive distribution centers. In July, Amazon said 76% of customer orders were being fulfilled within the 8 regions, up from 62% before the change.

Neil Saunders, managing director of GlobalData Retail, said psychologically, fast delivery is very important to the consumer when ordering online. However, it is expensive to support and often requires a lot of new infrastructure.

Wal-Mart is planning catch up to Amazon, and its model uses from than 4,000 stores as fulfillment centers and delivery hubs for online orders. In addition, Wal-Mart is adding 40 parcel stations to stores in 9 states to process more goods to get them faster to customers.

Both Wal-Mart and Amazon use a high level of automation to help speed up deliveries. Walmart is automating all of its 42 regional distribution centers which hold non-perishable items. In terms of perishable items, Walmart is building 4 automated warehouses. As well it is planning to add more than 100 smaller facilities that are connected to its stores and handle online orders.

Walmart has 3 fully automated next generation fulfilment centers which hold the most wanted items. The company says it has reduced the number of steps to pack and ship orders from 12 steps to 5 steps. The goal is to increase online fulfilled orders and expand next and 2-day shipping to 90% of the US.

Target is spending $100 million on its own warehouses. The warehouses called sortation centers receive their orders from 30 -40 surrounding Target stores. The company expects to have a delivery volume of more than 50 million packages this year.

Linking to dividend paying stocks, one of the reasons to invest in the first in the class stocks is to maintain their dominant position the companies need the resources to invest in satisfying their customers’ needs and perceived needs. If customers believe they need quick deliveries, it takes great resources to satisfy the demands. By satisfying the demands, that means they will be repeat customers and spend more over the long run as satisfying customers. The problem for the competition is the resources to continuing to meet customer demand and have margins to make profits, which is the reason why it is often easier to invest in larger companies than smaller ones.

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

If you ever seen pictures of Germany in the early 1930’s you may have see German citizens using wheelbarrows to pay for their goods. Inflation was very high, the money almost worthless and no one really had a solution. The problem arising politically because something seems better than nothing, and a person with a charismatic personality will tend to rise in the polls. The status quo has to be changed, to what is often ill defined.

In an article by Paul Wiseman of the Associated Press, the latest country with overwhelming inflation and money almost worthless is Argentina. Unfortunately for the country, it has seen this chapter before, the last time was under the Peron’s regime and Broadway had a musical including the song by Madonna singing Don’t Cry for Me Argentina about some of the times of the country.

A new President, Javier Milei has been elected, and he has started with cutting government spending and trying to pay off debts. The proposals including slashing the currency’s value in half, reducing aid to provincial governments, suspending public works, cutting subsidies for gas and electricity and raising some taxes.

In Argentina, inflation is 161% and for a country that depends on agriculture including raising beef cattle, the drought has lasted 5 years. The result is Argentina has debts of $45 billion owing to the IMF or International Monetary Fund and 1 out or every 4 live in poverty.

One of the problems according to Monica de Bolle, a senior fellow for the Peterson Institute for International Economics is the solution being proposed will make the life of all Argentinas harder in the short run for a long term solution. By any measures, a recession is forecasted for Argentina with a growth rate of – 1.3%.

President Milei believes by slashing government spending and debt, the fiscal house of Argentina will for the first time in many years be in order. The theory includes by slashing the value of Peso, exports will rise because they will be less expensive for other countries’ consumers.

Linking to dividend paying stocks, the easy place to become wealthy is invest in a company or country that has been beaten down to low asset values. The hardest place to become wealthy is the invest in a company or country that has been beaten down to low asset values. The reason is time, how much time will it take and what will be your reward? In Argentina the time will be years, often times for a company it can take a couple of years, but one has to monitor the situation closely. It is easier to watch from a distance, invest in profitable companies which can pay dividends and if you wish to invest in beaten down country do it through ETFs or companies which have operations in the country.

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

Ever since Adam and Eve, people have been wearing some type of clothes and that has been a driver of the economy ever since. People are needed to sew the clothes, distribute the clothes, sell the clothes and generally there is a healthy markup or the ability to make a profit selling the clothes. All of these elements, investors are constantly examining how to make money in all these areas and it is possible to innovate. One of the latest companies on the rise is called Shein.

In an article by Katherine Masters of Reuters, Shein accounted for 1/5 of the global fast fashion market in 2022 outpacing Zara and H&M.

Shein’s actual strength is acknowledging that they have no idea what you want to wear, according to Rui Ma, an analyst and founder of Tech Buzz China. What Shein has is the confidence in their ability to ramp up production very quickly.

Shein’s ability is to tap a network of largely China-based suppliers which accept small initial orders and scale based on demand. This makes Shein have an ultra-flexible supply chain.

In contrast, Spanish based Zara or Swedish based H&M which pioneered shorter production timelines rely on predicting what styles shoppers will buy. For the most part, the companies still anticipate fashion trends, preordering the product between 3 to 12 months ahead of sale and committing to fairly large order volumes, says Simon Irwin, a former Credit Suisse analyst.

One 2022 study found Shein typically receives orders within 5 to 7 days and can send the products directly to consumers via air freight. Shipping can take up to 2 weeks, depending on the product and a shopper’s location or this a direct-to-consumer model.

Zara and H&M has a brick-and-mortar retailers who must distribute apparel across a global network of stores and keep those locations stocked. Of the 2 companies, Zara has the fastest speed according to Patricia Cifuentes, senior analyst at Bestinver’s securities division.

One thing to notice is how much are returns and can the chain put the clothes back into the system to maximize the chances it will receive full price?

Linking to dividend paying stocks, in every company there is the ability to innovate and have new competition into the marketplace, in all likelihood the next few years of how AI works, the barriers will change again. It is important to do your homework which includes access to industry journals to see what is going on in your investments. Why are those barriers to entry or moats still enough for the company to raise prices and keep their margins?

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