In the world of banking and politics, the intersection is what will the Federal Reserve Bank do? For generations, politicians love lower interest rates, but the economy moves in cycles. To battle inflation, interest rates need to go up for the Federal Reserve to try to ensure inflation does not get out of control. During President Trump’s second term, President Trump wants interest rates to fall even further, but the economy moves in cycles.

In an article by Vidya Ranganathan of Reuters, the US central bank policy-setting Federal Open Market Committee is the most divided it has been in years.

The largest investment banks Morgan Stanley, JPMorgan Chase and BofA are watching the Fed very carefully and make their calls before the meetings.

Analysts expect as many as 5 of the 12 voting members of the FMOC will have divergent views, reinforcing the refrain in markets that the Fed is turning more political.

The policy committee has not had 3 or more dissents at a meeting since 2019, and that has happened just 9 times since 1990. Analysts now expect such dissent will persist.

President Trump’s appointees to the Fed’s 7-member Board of Governors have been dovish.

Fabio Bassi, head of cross-asset strategy at JPMorgan says investors should not focus only on the December meeting. Powell’s Fed which is in charge now, is not leaning towards very aggressive action, they are delivering insurance cuts.

President Trump, however seems bent on lowering costs ahead of the US midterm elections next year.

Linking to dividend paying stocks, the yield is the yield and as interest rates get cut, the yield on dividend paying stocks relative to bonds gets better. When you add in the possible increase in the value of the stock for a total return, often times dividend paying stocks beat holding many bonds. This means you need to listen to what the Fed has to say, but take advantage of it because there are many variables in any economy.

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

As an investor it is important to read and understand how markets work and although you may have a bias towards larger profitable dividend companies, it is still important to thing about the small companies. One book of many on the subject is called How to Become a Microcap Millionaire written by Justin Waite, published by Harriman House, Hamshire Great Britain, 2024.

the book has many quotes in it

The first rule of investments is don’t lose money. The second rule of investment is: don’t forget the first rule. Warren Buffett

The Chinese do not have a word for crisis. What they do have, however, is a two-word idiom: crisis equals danger and opportunity Bennett Goodspeed

Successful investors are disciplined. Their investment decisions are not driven by greed, fear and emotions Anon

Remember the two benefits of failure. First, if you do fail, you learn what doesn’t work; and second, the failure gives you the opportunity to try a new approach Roger Von Oech

An investment in knowledge pays the best interest Benjamin Franklin

Don’t look for the needle in the haystack. Just buy the haystack John C Bogle

Maybe you’re right 5 or 6 times out of 10. But if your winners go up 4- or 10- or 20- fold, it makes up for the ones you lost 50%, 75% or 100%. Peter Lynch

I don’t think it’s productive to wallow in regret. But if you’ve lost money in a stock and you don’t learn anything, that’s wasted money. Figure out what it is that you did wrong and don’t do it again Joel Tillinghast

You can only know so many companies. If you’ve managing 50 or 100 positions, the chances that you can add value are much, much lower Lou Simpson

Fortunes are made and lost by thousands of men in the stock market; they are made and kept by a few dozen Edwin Lefevre

I think the secret is if you have a lock of stocks, some will do mediocre, some will do OK, and if one or two of ’em go up big time, you produce a fabulous result Peter Lynch

Some stocks go up 20-30% and they get rid of it and hold onto the dogs. And it’s sort of like watering the weeds and cutting out the flowers. You want to let the winners run Peter Lynch

The stock market is filled with individuals who know the price of everything, but the value of nothing Phillip Fisher

A river is honored for its fish, not its size. Matshona Dhliwayo

It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong. George Soros

I will tell you how to become rich …. Be fearful when others are greedy, Be greedy when others are fearful Warren Buffett

Once a business is well established, the greatest opportunity for gain is afforded during the period of growth in earning power T. Rowe Price

All intelligent investing is value investing – acquiring more than you are paying for. You must value the business in order to value the stock. Charlie Munger

Hope is not an investment strategy. Hope is a component of a healthy state of mind, and the opposite of negativity that we see all around. But then, when it comes to the stock market, hope is dangerous. Anon

The greatest wealth is health. Anon

If you find 3 wonderful businesses in your life, you’ll get very rich. Warren Buffett

If you invest nothing, the reward is worth little. Anon

Under the tenets of behavioral finance, markets are not always efficient. It is human behavior that moves markets and not the universal information shared market participants. Gary Antonacci

The individual investor should act consistently as an investor and not as a speculator Ben Graham

It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble. Robert Shiller

It ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward; how much you can take and keep moving forward. That’s how winning is done. Rocky Balboa

Linking to dividend paying stocks, all the quotes are famous because they are true, but they are also hard to do. It is difficult to find companies, it is difficult to learn from failures, it difficult to let winners run because taking profits is a good thing. It is easier to buy profit making companies that pay dividends because the total return is a good return. If you invest in micro stocks, you will lose money, but you have great gains, it is risky. The non riskier method is to buy profitable companies and hold them as long as they stay profitable.

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

As an investor it is important to read and understand how markets work and although you may have a bias towards larger profitable dividend companies, it is still important to thing about the small companies. One book of many on the subject is called How to Become a Microcap Millionaire written by Justin Waite, published by Harriman House, Hamshire Great Britain, 2024.

Always Check the Cash

One type of business will, in general, always be riskier that the other. 1. Profit-generating and 2. Loss-making.

If a company is loss-making, you should break it down into 2 further categories are 1. revenue-generating and 2. pre-revenue.

If they are revenue-generating I analyze 6 metrics:

1. Growth – looking for double-digit revenue growth, ideally closer to 20%
2. Value – a market capitalization of less than 2 times its revenue and less than 20 times net revenue (P/E)
3. Health – ideally a company will have a little debt and net cash
4. Efficiency – gross margins to exceed 40% operating margins to exceed 10% and net margins to exceed 5%
5. Momentum – there are 3 basic states a share price can exist in 1. downtrend 2. range and 3. uptrend What you are trying to do is avoid a downtrend.
6. Potential research, research, research, companies that fulfill the 1-5 filters.

When researching loss-making companies, the most important metric to look for is cash.

The cash flow statement is broken down into 3 areas: 1. operating activities 2. investment activities and 3. finance activities.

A company is either generating cash or using it. If they are loss-making, they are using it. To be on the safe side, the author likes to make sure a loss-making company has more than 12 months’ worth of cash.

Linking to dividend paying stocks, all investors have a system and that system involves continuous learning to fit your metrics. Whether the stock is large or small in price, the idea is not to lose money and overtime ensure compound interest works for you.

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

As an investor it is important to read and understand how markets work and although you may have a bias towards larger profitable dividend companies, it is still important to thing about the small companies. One book of many on the subject is called How to Become a Microcap Millionaire written by Justin Waite, published by Harriman House, Hamshire Great Britain, 2024.

How many stocks should you hold?

If you hold a low-cost, well-diversified fund, then you are diversified. It’s important to remember that.

The more stocks you hold, generally, the less risk there is to your portfolio value. That is because holding many stocks means they take up less of a percentage of your total portfolio value. If a stock only takes up 1% of your total portfolio value and the business goes bust, you have only lost 1%.

The author personally finds it hard to manage more than 20 companies. You are investing in businesses. Everyone is unique, with different management, products, services, and financial metrics. There is a lot of information to absorb on each one. Jim Cramer of the Mad Money on CNBC talks about the best in the breed, quality over quantity.

Maximum exposure?

There is no hard and fast rule to this but as long as a company’s share price keeps going up, you should keep buying it- but there are 3 caveats to this:

Caveat one – as long as the company keeps releasing excellent financial results showing they are still growing at a good rate, and they are not overvalued.

Caveat two – 1-3%, but that is not the same as having a company take up more than 10% of my portfolio due to its share price rising.

Caveat three – if you are investing in a microcap, you should always pay attention to the average daily volume of that company. You do not want to be unable to sell if you want to sell.

Limit your downside, never limit your upside – let your winners run. If you manage to find a company that goes on to be a superstock – or rises by 1,000 or more, if you play it correctly you only need one big winner in your lifetime. Superstocks are rare.

A superstock formula or traits

1. Revenue – all these companies generated revenue (not hope, hype or potential)
2. Growth – all these companies experienced revenue growth
3. Value – all these companies were of a good valuation
4. Momentum all these companies’s shares prices had momentum
5. Size all these companies’s market capitalization sat below $100 m when the journey to 1,000% began

You should not fight the market; it will always win.

Linking to dividend paying stocks, no matter what company you buy, doing your homework and buying quality, for the idea is to lose less money. You can always learn from the small companies because they have hope, hype and sometimes actually revenue.

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

As an investor it is important to read and understand how markets work and although you may have a bias towards larger profitable dividend companies, it is still important to thing about the small companies. One book of many on the subject is called How to Become a Microcap Millionaire written by Justin Waite, published by Harriman House, Hamshire Great Britain, 2024.

The book has 3 parts – What – fundamental analysis; When – technical analysis and How – portfolio management.

How to Buy: Portfolio Management

1. Put a meaningful amount of your trading capital in a low-cost diversified fund. This means you’re guaranteed to capture a chunk of market performance no matter how the rest of your portfolio does. It takes pressure off. Everything else is gravy.
2. Aim for 10-20 low-risk companies with meaningful potential. Low-risk is more important than high potential, because high potential is by definition not highly probable. And diversification is your ever-present help in times of trouble.
3. Avoid denial when things go wrong. Cut losses. Learn lessons. Move forward.
4. Make equal bets by giving initial weights to your investments. And avoid risking everything by keeping those initial positions small 2-3% of your trading capital.
5. Don’t neglect your portfolio. Trim losses, secure wins – stop losses will do both for you automatically. Set them 20% away. Do not sell your winners – guarantee them by moving stops us as they grow.

We all want to make money on the stock market, but reality is some decisions we make will lose money. What do you do? You need discipline armed with facts.

This is the gain you need to breakeven a drop

% drop % rise to breakeven

10 11

15 18

20 25

30 43

40 67

50 100

If a share price drops 50%, you need a 100% gain to get back to breakeven. This is an uphill struggle. Sometimes you have to accept you got it wrong and move on. The financial press which shows a stock market in a newspaper has a column % gain over the year. How many are over 100?

One solution is to use stop loss, because investing is about avoiding big losses. Then it’s about making gains. Big losers wipe out gains, so wipe out the big losers and you are left with the gains.

Eggs and chickens

The author invests in eggs (microcaps) with the hope they will hatch and grow into chickens. However, by investing in a big fund, which owns mature companies you get the benefits of owning chickens.

1. Stability – it reduces portfolio volatility. Holding many big companies will always be less volatile than a few small companies.
2. Diversity – holding a fund means you can achieve instant low-cost diversification.
3. Probability – you will have a higher chance of a positive return.

Linking to dividend paying stocks, at the early stage of investing you looking to make money but the reality is that you need an anchor which takes time to build up. Along the line, it is very hard not to look at microcaps but before you jump in have an anchor if the price of the stock price goes down. The dividends allow you choice but the discipline and portfolio management skills need to be complemented.

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

When industries are going through disruptions, some will see the industry as half empty and others will see it as half full. The half full means companies will consolidate in order to grow differently. One of the industries that is changing is the movie industry. For generations it meant going to the movies and with the internet it became streaming. This means all kinds of things although people still enjoy and want movies to tell stories.

In an article by Michelle Chapman of the Associated Press, Paramount Skydance launched a hostile takeover offer for Warner Brothers Discovery of rival bidder Netflix.

Warner Bros Discovery is the studio behind HBO, CNN, DC Studios and much more. Recently the Board of Directors of Warner Bros Discovery accepted Netflix’s $72 billion purchase.

Paramount Skydance offered $108.4 billion and willing to buy all of Warner’s business including the cable business that Netflix does not want.

The deal includes more cash than Netflix – $18 billion. and Paramount Skydance noted it is more likely to pass antitrust scrutiny from the Trump administration.

Netflix offered cash and stock valued at $27.75 a share or a total of $82.7 billion

Paramount Skydance has offered $30 a share and has gone to the Middle East for partial funding tapping into Saudi Arabia’s Public Investment Fund, Qatar Investment Authority, Affinity Partners, the investment firm run by Jared Kushner, and the largest owner of Oracle Software – Larry Ellison who is the father of Paramount SkyDance CEO David Ellison.

Linking to dividend paying stocks, when mergers are announced they are often backed by the stock price of a company, if people do not want to keep the shares they can sell and some do because they own a different company in the same business, they see opportunities elsewhere, mergers take time before the results are seen, so you can watch from the sidelines and then possibly buy down in 6 months to a year at a lower price or you will need to do portfolio management and that is a good thing to have to do.

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

For every investor, the cost of money or interest rates pays an important factor in the investment decision. If you could receive 15% return for buying bonds, would you buy stocks? conversely if returns for buying bonds are 1% why would you not buy stocks? We all know what we would do if interest rates are very high or very low, what about the middle? One of the people who influence the interest rate is the Chair of the Federal Reserve.

In an article by Jeff Mason, Howard Schneider and Katharine Jackson of Reuters, President Trump says we already knows how he will pick to lead the Federal Reserve as Chair. Next May, the present Chair Jerome Powell mandated 10 years is up and he will not be reappointed.

Treasury Secretary Scott Bessent along with President Trump has led the search process. Mr. Bessent does not want the job. The leading contenders are Kevin Hassett, Michelle Bowman, Christopher Waller, Kevin Warsh and Rick Rieder.

Secretary Bessent says he has completed 2 rounds of interviews with each of them and plans a narrowing of the list to President Trump later in December.

President Trump favors someone who will lower interest rates.

Regardless of who leads the Fed, the first order of monetary policy is determined by economic conditions, James Egelhof, Chief Economist for BNP Paribas said.

Linking to dividend paying stocks, when buying dividend stocks the total return of dividends plus capital gains are the reward for the investor. In down markets, dividend stocks go down the least, why in up markets they trade at higher multiples because they are profitable. What is not to like?

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

If you are an investor, ideally you like to own shares in companies that have monopolies or near monopolies, to ensure there is a floor for the commodity prices. The floor means prices of the commodity should not go lower than that, if they go higher so much the better. Sometimes the ideals of the investor and the ideals of the consumer are opposite.

In an article by Ahmad Ghaddar, Alex Lawler and Oleysa Astakhow of Reuters, the OPEC companies offer a monopoly. Ever since 1973, OPEC has influence prices, before that it was the 7 largest oil companies at that time.

OPEC or the Organization of the Petroleum Exporting Companies is combined with the + which is allies led by Russia. (Russia’s number one export is oil and gas).

Having oil in the ground and not being in the G7 countries, is the entrance way into OPEC.

Since April of 2025, OPEC+ members have released 2.9 million barrels a day into the market.

OPEC+ has about 3.24 million b/d of output cuts in place, representing about 3% of global demand. The cuts are in place until the end of 2026.

The process for 2027, is an outside company will assess capacity at 19 of the 22 OPEC+ members. Capacity in the countries under sanction such as Russia, Iran and Venezuela will be assessed by a different company or by using an average of their oil output for August through October 2026.

With quotas, there are always some companies that either want to produce more or want higher quotas such as the UAE and others that resisting quota cuts because their production capacity as fallen such as Angola.

Linking to dividend paying stocks, many industries are complicated because the players have different influence over the industry. In the oil industry, the OPEC countries produce more than they consume, so they need to sell to other companies. The companies have consumers and consumers wish to pay as low as possible. On top of that the major oil companies produce oil domestically and offshore in non OPEC countries but all are influenced by the OPEC desirability for a range of prices. As an investor in the oil business this ensures oil companies make money, the issue is how much?

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

Every industry has trend lines, and one of the lines in the world of trading is the trend is your friend until it is not.

In an article by Mike Dolan of Reuters, trillions of dollars of AI investment spending earmarked over the next 5 years hinge on a belief that a grand technological transformation of the entire US – and likely global – economy is under way.

Strategists at the world’s biggest asset manager BlackRock unveiled their annual outlook, which showed just how difficult it would be for even this sort of tech metamorphosis to knock off the US off the steady course it has mapped over a century and a half.

The report from BlackRock Investment Institute noted the US sits at the global economic frontier. All major innovations of the last 150 years – including steam, electricity and the digital revolution – were not enough for it to break out of its 2% growth trend. Doing so is a tall order.

By that they mean AI could begin to generate, test and improve new concepts of its own- accelerating and driving scientific breakthrough in materials, medicines and tech.

Blackrock’s charts maps US GDP per capita growth stretching back to 1870. Aside from the big swings around the Second WW II, the two notable periods of above-trend were in the late 19th century and the 1990s. But it never strays far from the 2% line.

Maybe this time it’s different.

While we wait for AI’s long promise to unfold, the immediate economic horizon is likely still constrained by that 2% trend line – to the extent that bottlenecks in the labor market or existing supply chains or construction capacity still exist.

Linking to dividend paying stocks, if you are a trade then the trend is your friend until it is not. If you are long term holder, it is important to know what the trends are and have been to decide whether to reinvest or ensure your portfolio is well diversified.

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