When people lose money or resources, they often turn to the government to help them receive some of their money back. However, one of the reasons they invested was a seemingly lack of regulations. The government is between a rock and a hard place, because the lack of regulations means the government can do a little, for the courts have to decide if an illegal act has happened. In the case of crypto, the government is looking to bring in some regulations.

In an article by Glenn Gamboa of the Associated Press, some US Senators want to impose regulations on crypto exchanges which operate in the US.

Crypto was once touted as the alternative to the US dollar and a seemingly unregulated market, while the coins are regulated by the exchange, the identity of the purchaser is kept secret. This has resulted in those who make income from non-legal manners were drawn to the crypto exchanges. In the same fashion as money deposited in countries whose banks are in tax free haven countries brings in non-legal dollars.

Senator Warren has a proposal; Senator Gillibrand has another while some of the spokespeople now encourage regulations.

Sam Bankman-Fried believes FTX was at war with Binance over the unregulated market.

The government of the US, say FTX customers and investors were defrauded by FTX as Mr. Bankman-Fried diverted funds from the main account to cover expenses, debts and risky trades at Alameda Research a crypto hedge fund.

Linking to dividend paying stocks, one of the reasons you wish to own these types of stocks is they are traded on very regulated exchanges, or they should all have good governance. In the TV show, the Marshalls – one of the leading characters said to both follow the money trail and when the CEO was on the run, where did the person grow up. Often times when something goes wrong, people go back to first principles or their background. With profitable stocks investing the first principle is does the company still make money or is profitable? can it easily pay the dividend? and then other concerns can be asked.

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

Everyone when they are travelling looks to save both money and time, some want to save time and use alternative methods, while others want to save money. If you are travelling for your workplace, you want to arrive fresh and have some perks which makes you desire the business class of the plane. Someone in accounting always believes the flights are overpriced and the company needs to save costs and find the least expensive flight.

According to an article by Reuters, a survey from American Express Global Business Travel says airfares are expected to increase in 2023 amid higher fuel prices, labor and aircraft shortages.

The biggest gains are economy class on routes between Australia and Asia.

The cost of economy class within North America will rise by a more muted 3% and within Europe by 5.5% as capacity cuts during the pandemic are restored.

Flights between Asia and Europe are taking longer because of the sanctions on Russia which means the planes avoid Russian airspace. On a trip between London and Tokyo, the flying time is 2 1/2 hours and 20% increase in fuel burnt.

Amex GBT said global capacity in 2023 was expected to recover to 92% of 2019 levels.

Airlines group IATA forecast that carriers would post an industrywide profit next year partly due to rising fares.

Linking to dividend paying stocks, the pandemic brought commerce to a halt in the hospitality and travel businesses, and they are recovering and can be profitable next year. The point is the lag time, governments have their agenda, businesses have to adapt but there tends to be lag times. if the government and your timeframe do not add up, you should find alternatives till your investment agenda and the governments are at least on the same page.

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

During WW II, the cigarette companies distributed hundreds of thousands of cigarettes to the troops fighting in Europe and many of them came back to smoke in the US. For a long time afterwards, smoking was normal and if people gathered the majority smoked. Times moved on and now smoking is still normal, but if you gathered a group together likely the smokers in the US would be a minority. For cigarette companies, they were looking for a new market and along came vaping.

In an article from the Associated Press, the company that lead the vaping success story is called Juul Labs and the company was bought by Phillip Morris. However, Juul had an emphasis on their vaping products, and they were aimed at high school teenagers. The teenagers could not smoke, but they could vape, and the flavors reflected teenage tastes.

Eventually, parents pressured school boards who pressured the Department of Justice to bring lawsuits or change laws. (it was easier to bring lawsuits). After 5 years of the process, Juul Labs has reached settlement covering thousands of lawsuits.

When a lawsuit is over, all companies including Juul announced the settlements represent a major step towards strengthening the company’s operations and a way forward.

The lawsuits provide money and funding for anti-vaping education programs.

Linking to dividend paying stocks, all profitable companies have a legal department to take care of inhouse normal legal routine matters and outside lawsuits. Often times when there are multiple lawsuits, the companies hire an outside legal firm to do the work for them. It is not unusual for companies to be sued on a regular basis. It is noted as the lawsuits go on and the amounts become higher, the inhouse resources go towards the legal process rather the focus on the business plan. Most lawsuits involve money, and the company should have a reserve fund to pay the lawsuits. Ideally, the investments you own has few lawsuits and can worry about profits and paying dividends.

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

Investment bankers are examining where growth will happen and if the growth happens, which companies and countries will benefit. One method to do this is to examine which countries had bad years or down years, on anyone’s list should be China. Part of the reason for the down years is the existing government policy to stop COVID 19 outbreaks by shutting down the area. Given COVID is a respiratory infection, it is difficult to stop and that has led China to shut down cities with millions of people producing goods and services.

In an article from Reuters, China’s exports and imports shrank at their steepest pace in at least 2 1/2 years in November, as feeble global and domestic demand, COVID 19 production disruptions and a property price slump piled pressure on the world’s 2nd largest economy.

Exports were down 8.7% in November as compared to a year earlier. The expectation was a 3.5% drop.

The ruling Communist Party emphasized the government’s focus in 2023 will be on stabilizing growth, promoting domestic demand and opening up to the outside world.

Inbound shipments were down by 10.6%, weaker than a forecast of 6%.

Imports of soybeans and iron ore fell in November from a year earlier, while those of crude oil and copper rose.

The trade surplus was $69.84 billion compared to $85.15 billion in October while analysts were expecting $78.1 billion.

Surveys of businesses suggest many more months of hard grind ahead to find the growth China once had.

Linking to dividend paying stocks, in every country and every sector there are stocks which are greater value or beaten down than others. Are the stocks, great value or will they rise as time goes on. If the Chinese government opens up that it suggests it will, the stocks might be great value, if not there is always another reason holding the stocks down. What you are looking for are the stocks that will grow because they are profitable and eventually pay dividends. Doing your homework at the end of the year is important as it is the rest of the year.

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

In your area of the world, do you see more solar panels or wind turbines going up? If you do that is one of the reasons why the International Energy Agency said worldwide growth in renewable power capacity is set to double by 2027.

In an article by Elena Shao of the New York Times News Service, the IEA says renewables are posed to overtake coal as the largest source of energy generation by early 2025.

The growth of renewables is led by the European Union, USA and China. China is expected to install almost half of the new global renewable power capacity over the next 5 years, based on the country’s 5-year plan.

In should be noted all 3 countries are also using coal and during the Russia cutback, coal mines have opened in England, France and Germany.

For low-income countries there are barriers including a weak grid infrastructure, lack of access to affordable financing for renewable projects. At last month’s United Nations climate conference in Egypt, many global leaders asked the World Bank and International Monetary Fund to make financing of renewable projects easier.

Linking to dividend paying stocks, if you own a utility stock, the company used coal till coal prices went up and switched to natural gas and when renewables prices are compatible or thanks to Washington’s grants the prices make renewables good for the utility to make profits, the utility switched. Utility companies need to keep the electricity on and will do whatever makes economic sense for the shareholders as well as the community. It is good that renewables are gaining a greater share, but as a shareholder the return matters more.

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

Every investor has a bias towards where they live – they are familiar with the company names, sometimes investors know or see management of the company and there are multiple other reasons, but most people have bias. At the end of the year, major investment banks look towards the next year to see where there are undervalued companies or opportunities (investment bankers always see opportunities somewhere). Just because there is bias, does not mean you have to diversify or change the bias, just understand likely you have some.

In an article by Harish Sridharan of Reuters, global banks are turning bullish on South Korea and Taiwanese shares, expecting a rally in semi-conductor stocks.

Goldman Sachs says South Korean stocks are the bank’s top rebound candidate and expects a 2023 return of 30%. The premise is Chinese demand is expected to increase.

Morgan Stanley believes Korea and Taiwan have an early-cycle leaders in the demand recovery. The chipmakers such as Samsung Electronics or SK Hynix could rise 50%.

The elephant in the room or geopolitical events is what will China do in regard to Taiwan? One way to limit the risk is buy a country ETF stock.

Linking to dividend paying stocks, in every stock market around the world there are great stocks and very, very hopeful stocks. there are very good reasons to be diversified, in different parts of the country, in other countries but there are good reasons to have bias. The answer is it depends on the individual investor, but the numbers are the same – for you to make money the company needs to be profitable and ideally pay a dividend. If they can do that on a consistent manner, there is limited reason to look outside your bias area. Investing should be reasonably comfortable, and you want to limit the risk and allow the rewards to flow to you. There are always opportunities, but in the long run steady is a very good strategy.

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

In the retail world, the holiday season leading to Christmas is the quarter where profits are to be made. In is expected that in the following quarter people will generally spend less at the retail store as they pay down debts or build up savings and in the northeast the weather changes to colder. People consider going south to warmer areas of the world or there is never a lack of things to spend money, it usually does not go to the retail stores. After January, one expects to see retail stores cutting staff or hours to meet less demand.

In an article by Stine Jacobsen of Reuters, Swedish fashion giant H&M will cut 1,500 jobs primarily in Sweden where it is headquartered. H&M employees 155,000 worldwide. The prime reason for cuts is to safe money due to keeping the lights on and heating the buildings is increasing unaffordable with energy prices so volatile. H&M has many stores in Europe and due to the Ukraine conflict, there is less Russian gas which has pushed up energy prices.

In addition, the prime competition to H&M is Spain’s Zara and British fashion retailer Primark who are trying to woo customers.

H&M had 170 stores in Russia which are now closed as the clothes are sold.

Linking to dividend paying stocks, all companies have quarters which they tend to do better in, if the quarter which is traditionally their best quarter is not going well you should seek alternatives. If the company is doing great in quarters that are traditionally a little slow, then have higher expectations for the good quarters. If expectations meet reality, then you can do nothing and wait for the next quarter. Reality versus expectations helps make decisions to do or not to do.

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

Sometimes people see the world as either my way or the highway, a company or individual is the bad guy and the other side is the good guy, meanwhile the bad guy is just trying to do what is legal and meet a demand. When a person makes a great deal of money, it is reasonable to ask how did he/she do it? what connections do they have? can everyone have the same connections to make money?

In an article by Kruthika Pathi and Sibi Arasu of the Associated Press, they examined the richest person in India. Gautham Adani runs the Adani Group and by any measure is one of the largest companies in India. His success is tied to Prime Minister Narendra Modi and his policies to promote self-reliance and achieving net zero by 2070. Prior to Prime Minister Modi, the Adani Group was much smaller, but since his election, Mr. Adani’s net worth has gone up 2,000% to $125 billion according to Bloomberg’s Billionaire index.

According to Mihir Sharma, an economist at the Observer Research Foundation, it is not that government policies are shaped by the Adani Group so much as the Adani Group is a willing and able partner in what the government decides are its priorities.

Mr. Adani has a base in supplying coal to coal burning electric power stations and has expanded to ports, farming, defense manufacturing and announced plans to invest $70 billion in solar, wind and other green projects over the next decade.

The company has won multibillion dollar contracts to build ports, highways and power plants. If there are large government subsidies involved, the Adani Group expands. One of the key elements to Adani’s success has been his ability to manage relationships. He is close to every politician that is power according to RN Bhaskar who wrote a biography on Mr. Adani.

Linking to dividend paying stocks, in the above case Mr. Adani is flexible enough to agree with India’s policies and benefit from them. Some companies try to stay away from government subsidies, others embrace them, what does your investments do? does it what which party is in power? does the management team have relationships?

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

There are many people who discus the economy and what is going on and some write books. One of the speakers is Ben Stein who wrote the book The Capitalist Code, published by Humanix Books, West Palm Beach, Florida, 2017.

The book is designed for young people and hopefully older people are essentially doing what Mr. Stein recommends.

Someone is sitting in the shade because someone planted a tree a long time ago – Warren Buffett.

That means time is going to be on your side, think about Mr. Buffett’s long time holding in Coca-Cola. The stock pays dividends and over the years has increased in value but does not usually go up or down more than 10% a year. If you own it for years, the value has increased and the dividends you received would have paid for your costs and the money continues to flow to your account.

Do what you love, the money will follow – Marsha Sinetar

There is no one way to make a living, there are multiple methods. It is wonderful if you love your job or love parts of it, but unless you own the company one day you may be asked to leave. The key is live on less than you earn, whatever you feel is comfortable and save first, then spend. The savings as long as the investment vehicle is good will over time use compound interest to become large when you need it at retirement.

One of the best methods is buy an index fund for the S&P 500 which gives diversification, is low cost and because the index is changed at least twice a year (the losers go out, the winners come in) over time the index will be higher than when you buy it. Contribute monthly and in a few years, you will see the difference. If you want diversification, buy a dividend fund (if a company cannot pay a dividend, the fund sells it for one that can). Over the past 10 years, it is easier to buy the funds and contribute to them, most large fund companies have index funds.

Take advantage of all tax subsidies – Frank Knight

Understand relatively wealthy people write the tax code and there are more tax subsidies or breaks the more money you have invested or saved. Whether you call them incentives or deferred taxes or subsidies, the tax breaks are available to all but benefit those with more invested or saved. What you wish to do is convert short term taxable income into long-term very highly tax advantaged capital gains income. Use the system to your advantage.

Liquid assets = Action – Herbert Stein

What this means at some point, you will wish or want to sell your assets. If you own stocks or index fund or other types of funds you can sell them and receive your money within 3 days. You can invest in many other asset classes but understand how long does it take to get your money out if needed?

Linking to dividend paying stocks, if you place an emphasis on dividend paying stocks, you expect to live a number of years and be rewarded for what corporations do – try to make profits and reward their shareholders. The income you receive ensures an income stream and over the long term because profit making companies trade at higher valuations the shares increase which is a lovely benefit. If the dividend decreases, you can find alternatives there are always good alternatives on the stock market, it is just a matter what one you choose.

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