When 99% of people buy stocks, they hope the price goes up and stocks have two places to go – up or down. If you buy the index, you are expecting over time, the price goes up, this is the normal. The other method to invest is to hope the price goes down, but only after a great deal of homework is done. The bias for analysts in Wall Street is the price to go in the medium or long term. Once in a while, expecting the other result for stocks to go down is a successful investment. Last year if you were short the big tech companies, you would have made a great deal of money.

In an article by Carolina Mandl and David Randall of Reuters, according to data from S3 Partners, short sellers are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018 the last profitable year. The returns for the short sellers have been a 31.2% increase.

The top winners for short sellers have been Tesla, Amazon, Meta, Apple and Carvana. The S&P 500 is down almost 19% and on tract for its biggest yearly percentage loss since 2008.

Linking to dividend paying stocks, note some of the results from above, selling short was profitable in 2022, but the last time it was profitable was 2018. That means for 4 years, you might have lost money. Although share prices have decreased, dividends have increased in many companies, which suggests being conservative allowed you a reasonable return on your investments. One example is the big oil companies – the stock price is up and dividends, special dividends and share buybacks are common. If you buy for the dividend, you can allow for the stock price to fluctuate and still be contented as an investor.

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

In every recession, cash is king because credit is reduced and has gone up in price or interest rates are higher than normal. Companies have the same concern as individuals, if cash is king, debt needs to be low or eliminated. If one of your investments has higher than expected debt, expect asset sales or changes in management strategic plans.

One company which has constantly made the news is Twitter and in an article from Reuters, Elon Musk said Twitter is on track to be roughly cash flow even next year.

Before Mr. Musk bought Twitter, the company was going to lose $3 billion, but with the cuts he has made the workplace now has 2,000 employees. Roughly 50% of the workers were let go.

Twitter was on track to spend $5 billion in 2023. In addition, with $12.5 billion in debt due to the acquisition, Twitter has faced a net cash outflow of $6.5 billion with revenue of $3 billion.

Mr, Musk said in a Twitter Spaces interview, his number one priority was to grow subscriber revenue. Twitter’s major advertiser will be watching closely as they have told Mr. Musk Twitter ads have the lowest return on investment out of all the social media platforms.

Linking to dividend paying stocks, sometimes debt is good, sometimes debt is not good and Wall Street analysts will penalize the company for having too much debt. Mr. Musk bought Twitter for many reasons but if the return on investment for the advertiser does not improve, they will move funds to other social media platforms. It used to be advertisers were loyal to the advertising venue or newspaper, but those days are long gone. If the revenue streams are not enhanced, Mr. Musk will wonder even more why he bought Twitter. For this kind of stock, it is better to watch from the sidelines than risk money.

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

If you were looking for something on the computer, the chances are you used google as a search engine, you were not alone for billions of people did the same thing – used google as a search engine. It is good, it is ad free, it works very well, once you get to the site where you are going the ads pop up and Google makes 80% of its revenues selling ads.

In all industries, in all products there is a competition and since 2000 we have become accustomed to one product or service that is called a disruptor or revolutionize an industry. For google search, there are many barriers to entry to scale up and the world likes google search.

In an article by Nico Grant and Cade Metz of the New York Times News Service, there is competitor, or it looks like there could be a competitor to google search. The competitor is Chatbot or ChatGPT.

Not that google has been caught flatfooted, google and many other companies, labs and researchers have helped build this technology. Chatbot is using artificial intelligence and can serve up information in clear, simple sentences rather than internet links. ChatGPT was released by a research lab called Open AI.

The language at ChatGPT os called LaMDA or Language Model for Dialogue Applications.

It is important to remember as successful as Google is, no company is invincible, all are vulnerable, says Margaret O’Mara, a professor at University of Washington. For companies that have become extraordinary successful doing one market defining thing, it is hard to have second act with something entirely different.

Google will be hosting a major conference in May about AI and how they will respond to the challenges.

Linking to dividend paying stocks, there is a reason why google has continued to be the number one search engine and it is partly the infrastructure they have developed and continue to develop, no one comes close. No one company makes all the right decisions, but with the talent within and available to google as well as the resources to throw at the problem, solutions can be found. Changing your search engine will not happen overnight, but if you change and see people around you are changing then it is safe to find new alternatives. In the meantime, understand the are search has many variables behind it and google leads the way, almost but not quite a monopoly.

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

In all industries, customers want choices, but in all industries the suppliers want the customers to buy the bulk of their goods and services from the supplier. That sounds simple, but suppliers often have relationships or direct ownerships or influence customers to be within their orbit of companies. If a company is not within the orbit, one measure of attempting to increase their sales is to use the government and its agencies to allow more choice.

It is easier to see the tighter orbits with software companies because they can and do offer fewer choices.

In an article by Kelvin Chan and Haleluya Hadero of the Associated Press, Amazon has agreed to change some of its practice in Europe.

In Europe, the governing body is called the European Union and the EU has an antitrust regulator and it tries to ensure choice is offered in Europe. The EU could have potentially fined Amazon with fines worth up to 10% of annual worldwide revenue.

Amazon agreed to a 7-year agreement beginning in June of 2023. The company promised to give products from rival sellers equal visibility in the “buy box”, a premium piece of website real estate that leads to higher sales. European customers will get a second buy box underneath the first box but with a different price or delivery offer.

Amazon is also easing access for merchants and couriers to its Prime membership service. At present, couriers can only deliver Prime parcels if they are approved by Amazon. The change will allow access to more couriers.

Amazon will stop using non-public data from independent sellers on its platform to provide insights on how to compete against those merchants through its own sales of branded goods or private label products.

John E Lopatka, an antitrust scholar and law professor at Penn State University, said the changes happening in Europe could become a precedent for US antitrust regulators.

It is not unusual for companies to be sued for antitrust practices; the competition always thinks the company is doing a monopoly like practices. As investors, you like that, as a consumer may not. Companies that can operate in a monopoly or monopoly like practice can raise prices and remain profitable to pay dividends. If you own them, being an owner is a good thing.

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

All companies collect information, some use it better than others, but all companies collect information. For those in the consumer market, the issue is the cost of acquiring a new customer versus attracting revenue from existing customers. If your existing customers like your product, maybe they will like other products and services your company offers. When companies collect the information, the assumption is the person paying is both old enough and rational enough to make an informed decision. But what happens to companies that cater to young people?

In an article by Diane Bartz of Reuters, Fortnight creator Epic Games will pay $520 million to settle allegations that it illegally collected children’s personal information and tricked people into making purchases.

For gamers, after you have reached a certain level of skill, most gamers want to advance in the game and to do that companies such as Epic Games and many others allowed its gamers to buy products in the game to advance. If the person is an adult, no concern for the FTC (Federal Trace Commission), but what if the gamers are kids? Epic Games was fined for pay-to-win and pay-to-progress mechanics that allowed gamers to buy no matter their age.

Epic Games says they have created features such as easier-to-access parental controls, a PIN requirement to allow parents to authorize purchases and a daily limit for kids under 13.

Jeff Chester of the Center for Digital Democracy was pleased with the settlement.

Linking to dividend paying stocks, all companies collect information and many use artificial intelligence to analyze the information. It is expected with the larger companies and eventually will come to small and medium sized companies. If the company markets to young people, it has to controls in place not to abuse the young people. We as a society do not believe young people should be making decisions on a range of issues, the company has to respect that in the marketplace. Once the age has increased, the limits are much less, and it is expected companies to take advantage of as many opportunities as possible. For your investments, how are they using AI?

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

Most of us think about growth for personal, professional and whatever community we live in. Personal often includes education of one sort or another. Professional includes making plans to include growth in the company and the role you play in the company. The community we hope there are projects which makes the community we live in better. A number of years ago, the author saw a display about the City of Detroit – one year they issued no building permits, fortunately that has changed for the better. For many of us, we are bias towards growth, it is hard not to find growth in Wall Street press releases.

In an article by Lewis Krauskopf of Reuters, bank shares were down in December as worries about recession and weakening profit margins dull the industry’s appeal.

The S&P 500 bank index was down 11% including Bank of America down 16%, Wells Fargo down 14% and JPMorgan Chase down 6%.

Matt Maley, chief market strategist at Miller Tabak said Bank stocks do not do well in a recession, as more and more investors are worried about a hard landing.

Banks face a potential double whammy: a recession could hurt loan growth and increase credit losses; higher rates threaten to shrink profit margins in the interest rates paid on deposits eats away at interest earned from loans.

On the other side of the coin is King Lip, chief strategist at Baker Avenue Wealth Management, his firm has been buying bank shares based on their belief the recession will be moderate. At present the S&P 500 bank index trades at 9 times earnings estimates, below its long-term average of 12 times and the roughly 17 times for the S&P 500.

Linking to dividend paying stocks, it is hard not to earn a bank share or two because the large banks are generally profitable companies, but similar to all companies the prices go up and down. If you own the banks, do you buy more or have you sold some? The only perfect answer is looking backwards, but the market looks to the future The wonderful aspect to the stock market is there are reasons to buy and reasons to sell and people come to the conclusion looking at the same data. As an investor for dividends, you ask is the dividend safe no matter if the recession is hard or soft?

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

When oil is discovered, it is a good thing for the drillers, but for the company to make money they have to move the oil from the drill site to the refinery. They can ship by truck, but the cost and amount are too small for a large well. Railways ship oil and that is a very useful method, but the least expensive for the company is an oil pipeline. If and when the oil field is connected to the pipeline system, then everyone is happy because if there is one producing oil well there are more. If you examine the oil fields and then where the pipelines go you will see the US has a very connected industry.

The wonderful thing about pipelines is they deliver the oil to the refineries and the refineries can be located in one part of the country and the oil in another. The majority of refinery capacity is south of Houston and not far from New Orleans.

In an article by Erwin Seba of Reuters, the bad thing about pipelines is every once in a while, the pipelines leak. Generally, if you want a safe profitable company, examining utilities and pipelines is a good step. The companies are regulated, spend millions on ensuring the pipelines are monitored and tend to act rather quickly to stop and clean up the mess.

In Kansas, the Keystone pipeline transporting heavy crude oil coming from the Oil Sands of Canada and heading to a refinery on the Gulf Coast leaked. 14,000 barrels leaked and the cleanup is expected to take weeks or months. In the world of drones to take picture of events, the pictures show the oil leak.

The leak in the pipeline happened on a farm near Washington, Kansas and more than 400 people from contractors, the pipeline company, state and local officials all working to fix the fields. !4 landowners are being compensated for work on their fields. Bill Pannbacker the farmer where the majority of the spill happened, does not expect to see grass on the pasture for 2 or 3 years.

Linking to dividend paying stocks, all companies do both good and not so good things in their normal corporate life. In this example, the pipeline transports oil to the refineries which produces gas for all of us. Sometimes a spill happens and when it does it is important to see what the reaction of the company is? how does the company handle the bad aspects? if they meet your standards then you can keep your investment. if they do not meet your expectations, then it is time to seek alternatives.

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

In the world of Wall Street, people are paid a salary, but the real money is in bonuses. Typically, the firms make money and pay a bonus from the profits. The bonus can be and often are more than your salary, the bonuses allow many to live a very good lifestyle. If the markets are not doing well, then bonuses suffer. Similar to most industries, every profitable industry has its profit centers and one of the profit centers of Wall Street is the IPO or Initial Public Offering. For the past 2 decades the IPO was an automatic profit center.

In an article by Mehnaz Yasmin and Akash Sriram of Reuters, the IPO market on the Nasdaq fell 80%. In 2021 743 companies raised over $180 billion. In 2022 156 companies raised $15 billion.

Companies go public for a wide variety of reasons, but one is people are willing to make a long-term investment as well as they can see a method to sell shares if they go higher than the IPO. To do this simple thing needs a rising market or a market that is generally going higher. In 2022, the Nasdaq index is down 28%. The S&P 500 index is down 16.2% and the Dow Jones Industrial Average index is down 6.5%.

The Nasdaq is heavily dependent on technology companies and that has been a very good thing, for technology IPOs form the bulk of US listings.

According to Nasdaq’s Chief Executive Adena Friedman, the lull will likely continue in the first quarter of 2023 and hopefully pick up in the 2nd quarter.

Linking to dividend paying stocks, Wall Street makes lots of money on IPOs and trading stocks, as a dividend holder you are not a profit center for Wall Street, but you can easily be a profit center for yourself. As long as your investments are making profits which can pay dividends you do not have to do anything. Your biggest decision is what do you do with the dividends? pay down debt? buy more of what you own? use a little to help Wall Street? those are good decisions to have to make. Remember you invest for you first, then Wall Street for the bulk of the stocks you will buy and sell there are many institutions buying and selling the stocks – there is a ready market for you.

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

When consumers were talking about high prices at the pump, as an investor you may have examined the oil companies and which ones to own. For high prices at the pump means high profits at the oil companies.

According to an article by Danilo Masoni of Reuters, after 2 straight record-breaking years, investors who profited during the past 2 years in the oil patch, now have to decide to sell some holdings or do nothing.

Marko Kolanovic, a global markets strategist at JPMorgan recommended selling part of your energy portfolio but is a long-term bull.

Andrea Scauri, a fund manager at asset manager Lemanik expects oil prices to lower because of recissions risks and windfall taxes in Europe. At the moment she sold and moved to other alternatives.

Roland Kaloyan head of European equity strategy at Societe Generale is overweight energy expecting prices to increase between the 2nd and 3rd quarters.

Linking to dividend paying stocks, unless you are taking profits, owning dividend paying stocks means you can read both sides of the discussion and do nothing. Sometimes the best solution is to do nothing and allow profitable companies to buy their stock back, pay dividends and even special dividends. The result is over the long term the stock continues to climb and your assets increase.

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