If you look at the companies that have paid dividends for years or generations and raise their dividends, one of the names will be Johnson & Johnson. The company is in the health care business, if you go into homes across the world, you will find one or more of their products. They make products to look after all parts of the body and they have very profitable brands, it is a company you can buy almost anytime and hold for years to come. Having said all those wonderful things about the company, the company has a legal problem.

In an article by Nicole Sperling of the New York Times News Service, for the 2nd time this year, a judge has ruled against J&J’s effort to use a bankruptcy case to limit its exposure to tens of thousands of lawsuits that claim its talcum power products caused cancer.

The plaintiffs claim that the company knew for decades about the risks linked to its talc products including baby powder. The company has switched talc to corn starch.

J&J created a company called LTL Management in 2021 to shield itself from talc ligation. It proposed LTL would file for bankruptcy and pay $8.9 billion to resolve all the claims against it.

Judge Michael Kaplan of the US Bankruptcy Court for the District of New Jersey dismissed the case because the lawsuits did not put J&J in imminent or immediate financial distress. Earlier the US Court of Appeals for the 3rd Circuit in Philadelphia dismissed the first bankruptcy effort for the same reason.

Erik Haas, J&J’s worldwide VP of Litigation said we respectfully disagree with the bankruptcy’s conclusion and will appeal the ruling.

The case will continue to overhang the company.

A long time holder of J&J stock is Jim Cramer’s Charitable Trust and he sold the holdings until the appeals are done. Lawsuits consume a great deal of time of senior management and they need to be focused on their great brands and other health care solutions.

Linking to dividend paying stocks, if the lawsuit of J&J is settled, the company can continue to do all the good things consumers have expected over the past 100 plus years. From an investor point of view, all companies will be sued at one point or another, there is a reason there are legal departments and some of the biggest law firms in the city where the company is headquartered are paid a retainer fee. The issue on law suits is how much does it consume senior management time? if you think it is too much, it is best to find an alternative till the situation changes.

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

We live in a country that long ago decided private investments are better than government investments, they maybe. However, the government’s role is support or infrastructure and private investment is to make money from the government investments. It is something most of us take for granted, but not every country operates in that fashion.

In an article by Joe McDonald of the Associated Press, in late July, the French Finance Minister said he pressed Chinese leaders to open their markets wider to foreign investment and encouraged China to invest in France’s electric car industry. France’s Finance Minister is Bruno Le Maire and he met with Vice-Premier He Lifeng.

Similar to other countries around the world, many manufacturing countries left their home base to operate from China. Now the same countries are faced with trade deficits and they would like the deficit to narrow. One method is to export more products to China.

China and France agreed to co-operate on climate change, financing for developing countries and nuclear power. One of France’s biggest exports is cosmetics and the countries agreed to a trade dispute mechanism.

One of the biggest electric vehicle (EV) is China’s BYD. Their cars sell in France and the country France wants BYD the world’s largest producer of EVs to produce them in France because BYD is selling the cars in Europe. CATL a battery supplier has set up a factory in Europe to supply BMW.

France has restrictions on foreign investments by chip producer Ommic because French counterespionage officials believe a Chinese investor who bought Ommic in 2018 was trying to transfer chip manufacturing technology to China. France wishes to protect its key technologies.

Linking to dividend paying stocks, one of the roles of government is to open doors of other countries, some countries are much more open about it than others. The government typically offers assistance to private companies and they expect the assistance in both good and bad economic cycles. In the US, we often see companies only wanting assistance in the bad economic cycles. The economic model is slightly different depending on the country, if the companies you have investment in operate outside the US, expect to see greater co-operation with the governments they operate in.

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

When we look back, we can see perfect information, how a beaten up stock or sector which has lost investor confidence regain its composure and the shares increased. We see with perfect information, if someone had invested in the stock or the group, they would have made relatively easy money. However, at the time the risk was very high, how do you buy low and sell high?

In an article by Emily Flitter of the New York Times News Service, a beaten sector was the regional banks. We all expect and want the bank you bank with to be stable and secure, and many were scared when Silicon Valley Bank went bankrupt. Many people moved their deposits as well as their share holdings to other banks. There was a practical reason, Silicon Valley Bank traded at $755 in November, 2021, it was trading around $500 when it needed capital. The 16th largest bank in the US had a mismatch of deposits to loans and was losing money. The bank catered to the software companies and the large funds pulled their money very quickly from the bank. If you owned shares in a regional bank, are you safe particularly when you see the share price fall by 50% plus. Would you buy more? What has changed?

The KBW Nasdaq Regional Banking Index, a proxy for regional banks after falling 35% is up 27% or those that kept their holdings are almost even. Those that took a risk and bought the index are up 20%. Alexander Yokum, an analyst with CFRA says the worries about the future of regional banks has evaporated in the second quarter.

What has changed? and how do you know it has changed?

The macroeconomic luck of the regional banks is the US did not go into a recession. Sometimes you need to be lucky.

The more practical reason the banks are stabilized is the growth of deposits. However, to lure the depositors back and attract new ones, regional banks offer higher interest rates on deposits. Some of the money came from money market deposits switching to the banks. Attracting deposits by paying higher interest rates means interest expenses grow, but many regionals are profitable. Watching the interest rates at the regional banks helps.

Another step was to get rid of unprofitable loans. This was the biggest focus of the banks to improve the quality of bank loans. Most regionals have cut back on less profitable products such as auto loans. (There are You Tube videos about how auto loans work and the people in the industry say there are fewer choices). The reason auto loans can be cut back is customers often deal with car sellers who arrange the buying and selling of cars which means the customers have less or no customer loyalty to the bank. Companies have to stay to fundamentals of their business.

Another approach was to avoid renewing loans to companies that did not use other bank services. Although no bank should go the way of Wells Fargo and 13 products per customer, even if you do not need them. If a customer has one product per bank, if the bank lost the business, they would not miss it too much. Many banks want 2 or 3 products to keep customers.

Another aspect of the improvement is if you hear because office workers are not going back to offices, then real estate developers has a problem with their cash flow, you might be worried. The regional banks have emphasized their exposure to office real estate is 2 to 4% of total outstanding loans. Most of the loans to office buildings in the big cities come from the large banks and alternative investments. Communication of the worst negatives is important and why not here.

JPMorgan Chase Jamie Dimon talks about fortress banking which means higher capital ratios than the regulators required is a normal way to do business. Regional banks have increased their capital ratios to cover surprise losses, while explaining they have gone through every portfolio we have in the bank. The banks report these ratios and analysts show them in their reports.

Linking to dividend paying stocks, many people own bank shares because they are profitable and pay dividends. When there is a crisis, it takes times and many aspects to go right to get through the crisis. If you watch from the sidelines and you need to understand what needs to go right and see if the signs are pointing to what the company is on the right track. Knowing the signs is part of your homework and then you have the ability to buy low and sell high with limited risk.

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

Often times you will hear the stock market is rigged or bias and to some degree it is. It is also a wealth generator for patient money. However if you want to follow the get rich quick crowd, you have to rig it, to some degree. The easiest is to trade on inside information, however the problem for most of us is if you had insider information, how much could you borrow to buy the shares and how much would you make? If you are most people the answer is not all that much. If you were a billionaire, the numbers become much larger.

In an article by Luc Cohen, Jonathan Stempel and Jody Godoy of Reuters, British billionaire Joe Lewis whose most public investment is the Tottenham Hotspur soccer team, pleaded not guilty to what prosecutors called a brazen insider trading scheme.

The SEC prosecutors said in 2019, Mr. Lewis lent his pilots of his private jet, $500,000 to buy stock in Mirati Therapeutics before it released favorable results. The health care company stock went up 16.7% in one day. Both pilots repaid the loans and profited from the higher price of the stock. In normal times, when a health care company releases good results, the expectation if and when the product comes to market, it will sell well and the stock prices increases till people discover how long they have to wait till the product comes to market and then the stock decreases for a while. If Mr. Lewis wanted his pilots to be wealthier, he could have given them a raise.

Mr. Lewis, who is 86 founded an investment firm called Travistock Group and is the board of a number of companies which give him insider information.

Linking to dividend paying stocks, in the stock market are the people who want to get rich quick, most to the time they do not, there are also people who buy profitable stocks for the dividends and as economic cycles go through the stock market the price of the stock goes up and down, but over the long term the price tends to be higher because the stock is profitable. You can easily avoid those who want to get rich quick and their schemes with patience.

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

In every industry, trends develop in society, the issue for each company is to decide if it is a fad that will peak or will it be on going. For an individual you can do something or not, but for a company, a rational business case must be made to investment millions of dollars to ensure the investment repays millions of dollars. If the company is wrong, then millions of dollars of investments must be written off and careers change.

In an article by Martha C White of the New York Times News Service, the issue during the COVID is work from home. If you can work from home, then potentially you can work from any city or place. It is possible to work and enjoy the community you are visiting for longer period of time and if you are staying for longer periods of time, you will want a setup you have at home.

In the lodging industry, extended stay hotels are popular. Visitors tend to stay longer and need less housekeeping, extended hotels are less expensive to build and operate than their full service hotels. If they are less expensive, it tends to mean the margins are higher and higher margins mean hotel operators are adding new brands to their portfolios.

Hilton Worldwide, Hyatt Hotels and Marriott International have all introduced extended stay brands. Last year, Best Western International, Wyndham Hotels and Resorts as well as Choice Hotels introduced an extended stay chain.

Jan Freitag, national director of hospitality market analytics firms CoStar, said the action is hot as it can get.

Issac Lake, a brand manager at Project H3 by Hilton, noted economical construction is a top priority for hotel operators and the design is superefficient the way the design is built. For example, H3 rooms are designed so the bathrooms require only one fire sprinkler, light fixtures can be plugged in behind the bed to minimize the number of electrical lines and a single type of vinyl floor tile is used rather than multiple flooring surfaces. (next time you are in a hotel room really look at how the room is put togther behind the walls).

The extended stay rooms are a little larger, but there are no palatial lobbies, full service restaurants. Weekly rather than daily housekeeping is the normal, fewer daily check ins and outs reduces the number of front desk employees needed.

According to a study by Actabl, a maker of hotel management software, labor costs at full service hotels rose 24% in 2022, while costs rose 12% at extended stay hotels.

The kitchen in the extended stay hotels, means there can be cost savings on restaurant meals because people can make their own meals rather than eating out.

Extended hotels also cater to construction workers working on the infrastructure which is being built out.

Linking to dividend paying stocks, all companies look at trends and have to make a decision to add the trend to their products and services. If the trend becomes the normal, then there will be more additions as time goes on. However the key is always trends change, it is harder to change once the infrastructure has been built to service the trend. For your investments, how does your company capitalize on trends? which trend lost money? what did the company do?

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

In our world, there are only a few events which draws people together because they bring they transcend the event. Most of us are a little cynical, but once the event starts, we begin to watch and get excited and by the end of the event we shared the event. The biggest events tend to the World Cup of football (soccer) and the Olympic events. In 2024, the Olympics will be held in Paris, France. What are the biggest companies in the world doing to participate?

One of the world’s richest men is Bernard Arnault, who is Chairman and CEO of LVMH of Paris, France. In an article from Reuters, LVMH agreed to sponsor next year’s Olympic Games in Paris. LVMH has many top brands including Louis Vuitton, Moet Hennessy champagne and spirits, jeweler Chaumet and they will be involved in the Olympics.

The promotions include sponsoring French athletes, beauty retailer Sephora will sponsor the torch relay across France, the opening ceremonies will be on the banks of the river Seine and not in a stadium and a whole host of other sponsorship.

Linking to dividend paying stocks, all companies have a headquarters somewhere and in their home city sponsor an event or two. If a big event is held in their city, people outside and inside the city look to see if the company is sponsoring part of the event. Which events does you company sponsor?

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

For the past number of decades, the growth story in the world was the one country as it transformed itself. China was the answer for everyone – for less expensive manufacturing, for commodity prices increasing, for a growing middle income group in China to stimulate consumer spending, for infrastructure projects that made the rest of the world envious, many things were happening in China. COVID happened and normal cycles happened which means China is an recession and wants to get out. The term recession has been a thing for years in China, but it happens and now the world can see what the economy is based on. Part of the economy was based on real estate (25% of GDP), but since 2008 most developed countries around the world can tell you real estate goes up in price and sometimes goes down.

In an article by Ellen Zhang and Kevin Yao of Reuters, China’s top leaders pledged to do implement policies to boost domestic demand or more stimulus is coming. China will focus on expanding domestic demand. boosting confidence and preventing risks.

China will strive to achieve its annual development targets of 5% growth, but there are risks that will be missed for the 2nd year in a row.

Capital Economics noted the lack of any major announcements of policy specifics does suggest a lack of urgency or that policy makers are struggling to come up with suitable measures to shore up growth.

The central bank is using policy tools such as the reserve requirements ratio (RRR) to whether the challenges facing the world’s 2nd largest economy.

Linking to dividend paying stocks, we all want to invest in stocks that continually grow both organically and buying other companies, but the reality is economic cycles happen which means both up and downside risks. The issue is always how well does the company perform when there are more downside risks than upside? does the company have the ability to rise prices and maintain and grow profits? As you do your homework, asking about the biggest risks to the company is a good thing to do.

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

During the summer, the theory is more people will go to patios and occasionally drink beer, the restaurants encourage it and cities around the world help ensure patios exist. If you did, what brand of beer did you order? It seems there are thousands, more likely hundreds of brands, how did you choose a cold one? What will other people drinking? Research is an ongoing effort.

In an article by J. Edward Moreno of the New York Times News Service, a new brand has emerged with the top share in the beer market in the US – Modelo. For decades, the top share was owned by Bud Light, but Modelo Especial has emerged with a 8.7% share compared to Bud Light at 6.8% according to Nielsen IQ data analyzed by consulting firm Bump Williams.

In an interview, Bill Newlands, the CEO of Constellation Brands which owns Modelo, said the beer’s rise happened sooner than expected. Constellation Brands also owns the beer brands Corona and Pacifico.

Americans are drinking less beer than they use to and the beer they grown to like is more expensive than Bud Light. Craft beers and imports lead the way.

Nadine Sarwat, an alocholic-beverage analyst at Bernstein Autonomous, a market research company, noted teenagers tend not to drink the beer their parents drink. Younger drinkers want something new or different, and slightly more expensive.

Mexico exports more beer to the US than any other country. In 2022, it shipped 7 times the volume of 2nd highest source of the Netherlands.

The interesting thing about the growth of Mexican beers is the further you go from Mexico, the higher the growth rate. States north of the Mason Dixon line tend to have fewer Hispanic populations has seen the highest growth of Mexican beers.

Constellation has owned Grupo Modelo since 2013 and promoting the beers since with a fighting spirit marketing campaign. The company has positioned Modelo as game day beer as well as being a sponsor of UFC that is in the low 8 figures according to Sports Business Journal.

Linking to dividend paying stocks, if you are an occasional drinker of beer, you may not know how the beer market functions. Sporting events brings viewers and viewers bring sponsors and it is possible to be in the markets that are popular which helps beer sales. Through being a fan and paying attention to the sponsors, it is possible to link it to sales of products and which companies own the brands. Doing your homework on how the market functions, can make you money or justify watching the sporting event at a different level.

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