In the world of inventions, often it is easier to invent an existing method to do something better. If you invent a better mousetrap then the issue of logistics comes into play. This statement means a better mousetrap needs to be produced, shipped and sold and they may or may not be the same distribution channels. A better mousetrap might be educating the public or those that will buy the product to why it is a better product, you may see all the reasons but does the buying public?

In the world of electric vehicles, the success of Tesla has allowed it to open charging stations next to malls and other locations where the mythical average Tesla buyer travels. Elon Musk for years has said Tesla charging stations are for Tesla owners. We are the standard, let others adapt to us.

In an article by Matthew Daly of the Associated Press, Elon Musk has changed his mind and thanks to an agreement with the White House. The changing of Mr. Musk comes with federal funding or part of the infrastructure funding from the Whie House and for higher priced electric vehicles to be eligible for rebates. For the White House, they will receive access to Tesla charging systems, the way it will work, all EV drivers will be able to access the stations using the Tesla app or website.

One of the reasons the White House needed Tesla charging systems is the requirement that 55% of the components used to make EV stations must be made-in-America. The EV industry, said that is a good idea, but it will slow growth of EV stations if you wish 50% of new US auto sales to be electric by 2030.

Linking to dividend paying stocks, with many of these companies there are existing infrastructure requirements that the profitable company fits into very well. For a competitor it is not just inventing a better mousetrap but disrupting or changing the entire ecosystem. While it is possible, it does require great amounts of capital, which most start-up companies do no have. There are some industries which changing the ecosystem is easier, but the timeframe is something people in the industry can view. For the companies you have an investment in, do you have an easy method to monitor the industry?

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

In every business in the world always needs to ensure revenues are higher than expenses to survive. It is a simple formula but when times are good, there is always a call for more costs for the company to bear. The cycle is never ending and many companies try to strike some sort of balance. It is one of the prime reasons company’s pension plans have moved from defined benefit to defined contribution. The first the emphasis is on the employer to have the pension funded, the second the emphasis is on the employee. There are strengths and weaknesses to both, but achieving a balance is important.

In Europe, they have a history of electing governments who wish to give the people full pensions earlier in life. For a long time that was a good thing, The normal life expectancy was less than 70 years of age and lowering full government pension from 64 to 62 meant more votes from older people. The problem with the system is people are living longer and there are fewer young people paying into the system. What should the government do as people live longer?

In an article by John Irish, Noemie Olive and Ingrid Melander of Reuters, the government of France is trying to save billions of dollars to keep the pension system in positive territory. The government believes by increasing the retirement age from 62 to 64, the payments would yield an addition $25.2 billion in contributions allowing the system to breakeven by 2027. On the negative side, hundreds of thousands of people like or are expecting to like the process of full benefits by age 62 rather than 64. The French spend the largest number of years in retirement among OCED countries and polls show a substantial number of people are reluctant to give it up. The French may like the President, but they like the benefits better.

Linking to dividend paying stocks, when a company is consistently profitable and can pay dividends, there are and will be constant demands on it to do more. As a shareholder, you want your expectations to be meant first, then the company can do what it can or desires to do with its other pieces of the pie. All company must keep an eye on costs both it good times and not so good times, it ensures the company can be consistently profitable. If you think your company is not worrying about costs, it is time to find alternatives.

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

When you think about any country, part of the checklist is the infrastructure in the country, does it work? If the answer is yes, then you can move on to other aspects of government and private industry to determine if you wish to invest in the country or not. Some countries have seemingly natural advantages, but if the infrastructure does not work, it is easier to skip over the country. One country that should have natural advantages is South Africa, however its recent history has made it less desirable.

In an article from Reuters, in mid February, Prime Minister Cyril Ramaphosa declared a natural disaster over his country’s crippling power storages, saying the pose an existential threat to economic and social fabric.

The previous Prime Minister, who is charged with corruption, allowed the Gupta Group to be some sort of middleman at the state electricity company Eskom. The Guptas were allowed to insert a company which invoiced the company at the normal electrical rate and charged consumers a higher rate thus earning millions for the owners of the company which included the son of the Prime Minister. Outside of higher prices for consumers, there was no benefit to them. The millions were not invested in the infrastructure of the Eskom.

At Eskom, the electricity system met delays in building new coal-fired systems, there was corruption in coal contracts, there were many delays setting up solar farms or allowing private providers to tap into the sunny days of the country and the list goes on. The result is rolling blackouts disrupting manufacturing and households to go about their normal activities. Economic growth is expected to decline to 0.3% this year.

People were expecting after the former corrupt Prime Minister, the existing Prime Minister who is worth over a billion dollars would help fix the economy, but it is very slow process.

Linking to dividend paying stocks, it is easy to take making profits for granted and the government wants a bigger piece of the pie for taxation purposes. It is easy to look at utilities and think they can be … whatever. The reality is if money is not constantly being reinvested into the business, the business goes downhill. Those who like dividend stocks tend to like utilities for people need to pay the bills and regulators tend to increase prices to maintain profits and dividends. If the government thinks about the utility as a cash cow, then it is time to quickly find alternatives.

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

A number of years ago, one of the general magazines published a photo of the electrical lights of the world as seen by one of the satellites in space. As one would expect the US and Europe were lit up and there were vast areas where electricity was not to be seen. Where there was mass civilization there were lights, where few people lived there was few lights. Does that always be the norm?

In an article by Frank Jordans of the Associated Press, the International Energy Agency based in Paris, France is forecasting Asia to use half of the world’s electricity by 2025. Much of that usage will be in China which will go from a 25% to over 33%.

China will consume more electricity that the European Union, US, and India combined, said Keisuke Sadamori, the IEA’s director of energy markets and security.

Africa home to nearly 8 billion people will consume just 3% of the world’s electricity in 2025.

Part of the solution is renewable energy including solar and wind and nuclear power. Much of the world is dependent upon good weather for solar and wind. In such a world, the flexibility of the power systems while ensuring security of supply and resilience of networks will be crucial.

Linking to dividend paying stocks, one of the easy investments is to buy utility stocks because the power can be generated, and regulatory agencies tend to raise rates which keeps investors happy. If you buy these types of stocks, it is important to ask how is the company flexible and able to continue to generate electricity which translates to profits and dividends?

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

All companies both big and medium sized will decide if they want to grow, both organically or by purchasing another company. In this fashion the larger companies tend to get bigger if their acquisitions work out. Somctimes the perfect deal on paper works, sometimes it does not for a variety of reasons. One of the advantages large companies have or supposed to have is they have access to lawyers and lobbyists in all the countries the company operates in. However people are people in every country and they have biases and they see the advantages and disadvantages of the bigger company. A good example is Microsoft wishing to buying Activision Blizzard.

In an article by Kelvin Chan of the Associated Press, the $68.7 billion deal is stalled because the British Competition and Markets Authority (CMA) came out with a statement the deal will stifle competition and hurt gamers. The bureau found the deal would strength Microsoft’s position in the growing cloud gaming market. In the cloud gaming market, gamers stream games on mobile phones and handheld devices they already own. This could result in higher prices, fewer choices and less innovation.

Microsoft’s deputy general counsek, Rima Alaily, said the company is committed to offering effective and easily enforceable solutions that address the CMA’s concerns.

This means the British antitrust investigation is set to drag out for a few more months. Microsoft was hoping the British CMA would have a favorable outcome and they would use the outcome at the US Federal Trade Commission (FTC) hearings.

William Kovacic, a former FTC Chair and now a law professor at George Washington University, noted the good news was the British did not prohibit the deal leaves a opening for further discussion.

Linking to dividend paying stocks, one of the reasons why people buy the companies is the companies have a moat, which can tend to limit competition and the ability to raise prices or keep up margins. As a consumer agencies, these elements are not the best in the world, but as an investor you like them. The gaming industry is bigger than the movie industry, which means Microsoft will have to continue to come up with very popular games and in a few years change pricing strategies.

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

We all have biases and that is fine, but there are some that as an investor you do not think about too often. The bias is we have is linked to shop local. Whatever you location is, you will tend to shop in the vicinity because it is convenient, and it makes reasonable sense to do so. After you determine where you live, you tend to figure out the logistics to make it work and ideally it is best place for you. There are reasons why you live where you live. In the investing world, the biggest stock market in the US is the New York Stock Exchange or the Nasdaq. There are other stock markets, but as an investor you want to own shares in New York. As you become a seasoned investor, you may look to other stock exchanges such as in Chicago, Philadelphia and Boston, but the bias is towards New York.

In an article by Jamie McGeever of Reuters, the US slice of the multitrillion dollar global equity market is 41% total share. According to figures from the World Federation of Exchanges (WFE), US equity market cap accounted for 41% of the world total just below the previous year of 42%. Since 2000, the US market has averaged 38.3%.

According to Raina Oberoi, global head of equity solutions research at MSCI, the market cap proportions and valuations alone do not signal bubbles, but they can be warning signs.

WFE data showed global market cap end at $100 trillion down from a peak of $125 trillion a year earlier.

Mark Haefele, global wealth management chief investment officer at UBS, believes US stocks are 40% more expensive than European and emerging market stocks. The S&P 500 index is trading at 17.7 times earnings while the MSCI Europe is trading at 12.5 times earnings.

Linking to dividend paying stocks, if you are buying for the dividend and expect to hold a medium to long term, then it does not matter whether the stock is overvalued or undervalued when you buy. It is wonderful when you buy a stock and it moves and stays in positive territory in a short period of time, but stocks go up and down. There are always opportunities somewhere, but that does not mean you need to chase every opportunity. It is okay to have biases, just understand what they are and what that can limit you. The reality is every stock exchange performs the same manner, however, is it easy and convenient for you to follow the markets. We all have biases and that is not necessary a bad thing, do you know yours in regards to investing?

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

In the world of investing and almost every other industry, new products are needed and pushed to investors to continue to invest in the different stocks. It seems there are many trends, some stick and some do not, no one really knows what will stick and what will not. At the moment, the letters AI are the buzzword and companies have used different levels of AI for generations. What is happening is AI is becoming mainstream to normal operations of technology uses. A couple months ago Chat GPT was released and there was excitement of what it can do and what does that mean in the future. The reality is the big tech companies have been spending on AI for a long time, but it was in house rather than for the general public.

AI will change and enhance customer service to ensure customers want and pay for the goods and services they desire. In the coming months all companies will be telling their customers who they use AI.

For Microsoft, the reality of search is over 90% is done through Google, Microsoft has less than 5% market share.

In an article by Jeffery Dastin of Reuters, Microsoft unveiled enhancements to its search engine called Bing and the Edge browser. Microsoft will be using OpenAI and will use that operating system.

Microsoft is starting with laptop but soon with bringing the technology to the smartphone. Microsoft has the number three market share in the Cloud behind Amazon and Google and will bring OpenAI to it.

Gartner analyst believes the partnership with OpenAI is more relevant for business customers and consumers will have to wait for a few months, but something could be disruptive.

Linking to dividend paying stocks, all companies have to pay attention to the trends which flow through the marketplace and the trends with are or should be longer lasting. It is important to ask what improvements is AI making for the customer and the company?

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

If you think about countries that amassed great wealth from oil and gas, likely your first answers would tend to be those in the middle east – Saudi Arabia, Qatar and the other countries. Later you would ask yourself where the great oil fields in the world and you might consider Siberia’s oil fields which allows Russia to do what it wants. Another great oil field is under the North Sea which has benefited the UK and Norway. The politicians in Norway set up a fund for generations or a Sovereign Wealth Fund and it is now over one trillion dollars. The fund owns stocks in 9,000 companies in 70 countries and unlike other countries, the fund is still growing. In other countries, funds were set up but politicians like to spend, and they built infrastructure and when the economy went into its normal cycles, paid down debt in the downturns which rarely allows the fund to grow. Norway has been disciplined enough to spend 3% of the fund and there are calls to lower it to 2.5%.

In an article by Paul Waldie of the Globe and Mail, Norway has a problem, it is one of the largest generators of electricity in Europe through hydro, but due to decisions made years ago, hydro rates are going in Norway. For generations, hydro rates were at cost or very inexpensive for the average household.

Most of the people in Norway live in the southern portion of the country, where normal rainfall patterns have changed and while they are not dealing with California type situations, Norway’s reservoirs have decreased by 20% cutting power generation at the hydroelectric plants. In the northern part of the country, all is normal, but that output is designed to be sold to Europe. The market is deregulated which means the hydro is sold to the highest bidder. The hydro wires that bring the electricity to Europe are not connected to the southern Norway grid.

The government of Norway has offered subsidies to people, but electricity prices are higher than before.

Linking to dividend paying stocks, when a company is profitable there are more demands on it and saying no is there only method to stay profitable. It is difficult to say no all the time and profitable companies have to pick the causes they give and how much. Companies which make a profit hear about deals all the time, most of them are not deals and management has learnt to say no. As a dividend investor, often times what you do not invest in saves you money and over time makes you even more. For your investments, do have ideas what your senior management said no to?

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

If you examine the largest mining companies in the world, there is often an Australian property or properties involved. The island has some of the largest mineral deposits in the world and to mine them, large operations were built up.

In an article by Emma Graney, one of the biggest exports of Australia was and is coal. According to Geoscience Australia, the country has the 3rd largest coal reserves in the world and more than 11 billion tonnes has been mined since the late 1700’s. One of Australia’s biggest customers is China.

Coal was used to produce about 60% of the country’s electricity in 2017 but has been decreasing because natural gas is less expensive and now wind and solar are expanding.

There are interesting videos on the mining of coal and iron ore in Australia and the scale is large. Coal is often found under the ground and huge open pits are dug to take the coal from the ground. What should happen to the open pits once the mineral or in this coal is not profitable to be mined? It is age out question and if you ever been to areas where there are mines you likely have seen open pit mining.

In Ms. Graney’s article she highlights a transformation that has gone right. The Premier Coal company operated a huge mine and closed the mine in 1997. The mine located south of Perth in the town of Collie had been mining coal since the late 1800’s. The coal company had diverted part of the river to gain access to coal. The closing plans called for keeping the diversion channel. The mine site eventually filled up with water, overflowed the levee but a study said the water quality of the lake would continue to improve as the river water flowed through it.

In December 2020, Premier Mark McGowan opened a $5.2 million campground and boating site and the area is now known for its tourism. The issue will always it took years to rehab the land.

Linking to dividend paying stocks, it all industries there are supply chains and as consumers you often only worry about the last two – buying from the store and does the product work? In reality, supply chains go all the way back to the minerals the product is made out of and there are many concerns when the ore is no longer profitable, who should do something to the land to make it look the way it did before? There is no good answer except government funds are needed and time has to be on your side.

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