When COVID happened, all over the world governments sought to ensure few people died by shutting down workplaces to ensure people did not gather as much. It was a blow to many economies and with some vaccines available, people were able to gather again. Given entertainment and hospitality industries need people to gather to operate it was a very good thing to reopen again. People had some choice and soon job openings were seen, companies need bodies to carry out their business. Where were the people?

In an article by Lydia Depillis of the New York Times News Service, some of the missing have been found. After World War II, the servicemen caught back from the war and started having babies, this lead to the great baby boom from 1948 to 1965. After 1965, families became smaller from an average of 5 plus to today’s 1.5. The statistic meant a wave of people moved into school systems which had to be expanded, then they moved in work and now the wave is in the retirement range. There are many people who can retire, although the magic age is 65 when the government gives you full pension for being alive.

According to JPMorgan, some of the gap is owing to COVID’s death toll of more than 1 million people including 200,000 of retirement age. In addition, legal immigration is down by 3.2 million people. People looking for work is 62.4% compared with 63.4% in February of 2020.

In terms of the baby boom group, people who had been staying in the work place longer because we are living longer before the pandemic are disproportionate dropping out and have not returned. When asset prices including stock market values and housing prices increased, those that were fortunate to own assets did some calculations and retirement was easier.

Linking to dividend paying stocks, we all buy stocks to increase your net worth and everyone has a different point in which they could or would retire. Some wait till the government checks to ensure a steady cash flow, some wait till their assets are a level they could sell and be ok. There is no number otherwise, those that are multi millionaires or billionaires would not work. What is your expenses? type of lifestyle you wish? life choices? health? and the list can and does continue. With dividend paying stocks, the number is closer every year.

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

If you believe in the Mediterranean diet for healthy eating, it likely includes using olive oil. Similar to products all over the world where the best olive oil comes from is up for debate. You may have thought about Italy or Greece, but half of the world’s olive oil production comes from Spain. In Spain, the 67 million olive trees planted in the province of Jaen, located south of Madrid and north of Granada has been growing trees since Spain was part of the Roman empire. The trees of Jaen is one of the world’s largest man-made forest and has made Jaen the olive oil capital of the world.

In an article by David Segal and Jose Bautista of the New York Times News Service, the reason why the region is in the news is the drought that has been going on in Europe. The trees are green but the production of oil will be down drastically, about 1/5 of normal volumes. It is hard to be a farmer and pay bills on 20% normal volume. The millions of trees has essentially made the province of Jaen a one crop economy.

In years gone by, harvesting the olives was a very labor intensive industry, but a now days tractors equipped with a vibradora, a machine which shakes the trees and the olives fall into a net.

In Jaen, it has not rained in 3 months which means those trees which have some irrigation are alive and doing well, those without the leaves are turning brown with little to no fruit. Olive oil trees are use to living without much water, but the winters are dry and short and the droughts are stronger and lasting longer.

The drought has increased the price of oil oil, but costs to produce the olives has increased. The average farm is about 4 acres and the government does provide a subsidy of about $1,400 a year.

Linking to dividend paying stocks, similar to all investors have diversification in your portfolio is a good thing. It is difficult, for example in the above example, trees have producing fruit for thousands of year we are in 2022, Roman times are year 1. Under normal circumstances the farmers could produce and make a reasonable living, however capital costs are going up and farms will need to consolidate or change because of climate change. Change is difficult no matter what industry you are in.

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

Debt is a wonderful dual sword – debt is needed to allow growth, but debt has to be paid back. Every company and individual needs to pay attention to debt, but for companies sometimes the government gives the impression, the encouragement to grow even faster and the government will be pay the debt. The scenario has happened in many cases and the latest one is Evergrande Group.

In the 1980’s up until the mid 2000’s, China was leading the world in growth rates and not surprisingly the property companies were putting up apartments and houses faster than people could occupy them. In China there are cities for over 100,000 people but less than 5,000 live in it or Ghost Cities. Someone authorized and gave the distinct impression it was important to build them. One of the big property companies was Evergrande Group.

According to an article in Reuters, Evergrande Group has over $300 billion in liabilities. The company has been trying to sell its headquarters building in Hong Kong for $1.7 billion to raise funds. The Hong Kong tower is pledged for a loan by lenders led by China Citic Bank a subsidiary of the Chinese state owned bank China Citic Bank Corp Ltd. The bank is appointing a receiver in bankruptcy to seize the 26 story office tower.

Linking to dividend paying stocks, when debt is very inexpensive it is good companies are using debt to grow the business, but interest rates go up and debt needs to be paid first. For your investments, watch the debt levels.

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

If you think about the movie industry, new films are released and many people around the world go to movies. If you think about the gaming industry, the industry is larger than the movie industry.

In an article by Mathieu Rosemain and Tassilo Hummel of Reuters, Chinese tech giant Tencent is increasing its minority stake in Ubisoft. The deal values Ubisoft at $13 billion.

Ubisoft’s most popular games are Assassin’s Creed and Tom Clancy’s video game franchises.

Tencent’s investment in Guillemot Brothers Ltd. which owns the bulk of the family’s 15% stake in Ubisoft. Tencent has the right to increase its stake from 9.99% from 4.5%. There will be a tie up for 5 years, if Tencent wishes to sell, the Guillemont family to buy the shares.

Linking to dividend paying stocks, it is not surprising large companies continue to grow because they have the ability to partner with other profitable companies and hopefully can offer customers a good reason to stay within their orbits. At some point in time, to play Ubisoft games in China will mean some link to Tencent and the profits will stay within their orbit.

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

In the world of marketing, the idea is to capture the consumer when they are relatively young and have them for them as a customer for a long time, there is a term called Customer Lifetime Value and through big data, companies are measuring it more and more. In some cases, the type of customer service will depend on the number. In the world of cigarettes, capturing a consumer when they are young, given some of the chemicals in the cigarette are addictive will ensure even though there are fewer smokers, the ones that do will smoke a lot.

In the era of fewer smokers, cigarette companies turned to something else and the something else was vaping. Vaping has a a high nicotine count which tends to mean those who vape will vape on a regular basis. This is okay for adults, but what should the rules for teens be?

In an article by Matthew Perrone and Dave Collins of the Associated Press, Juul labs has agreed to pay $440 million to settle a 2 year investigation by 33 states to the marketing of vaping products to teens. The money will be paid out over a period of 6 to 10 years with some going to education. The settlement total amounts to 25% of Juul’s US sales.

Juul had a variety of flavors of its vaping including fruit and candy which were clearly aimed at the teen market. Also included was restrictions on where Juul products can be placed in stores, age verification on all sales, limits to on line and retail sales, not using cartoons in advertising, not paying social media influencers and using billboards where 85% of the audience is adults.

Linking to dividend paying stocks, while Juul was doing its advertising, many teens tried and likely continue vaping and more importantly the company was sold to Philip Morris cigarette company. Over the past 2 years, Phillip Morris wrote down their investment but still sells vaping.

Linking to dividend paying stocks, all companies want to do what is legal and profitable and sometimes the closer to the line, the more profitable the product is. How close to the line of legal a company goes is often what determines its morals and ethics. The ideal is profitable companies stay well within the line of being legal and are sued for normal elements. Lawsuits consume time and energy and generally companies have to give up most of what they made by going across the line. In your investments, how active is the legal department?

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

Every household and business has fixed expenses to operate and generally the fixed expenses are in a range which is manageable. When one of the fixed expenses jumps in price, everyone has concerns because the income to pay the fixed expense did not jump. In Europe, due to Russia invading Ukraine, gas and oil prices have jumped and everyone has to pay more. The first thing companies and individuals do is try to find alternatives such as cutting back on usage, examining other forms of fuel but if the company uses gas and oil, it is difficult to find alternatives. The government when prices jump want to do something, but their budgets are stretched which means they have to rely on the large institutions to do something.

In an article by Valentina Za of Reuters, the government of Italy had discussions with Italy’s second biggest bank UniCredit to help its customers deal with the increased prices. The bank offered more financing for small businesses, credit card holders will be able to miss a payment without penalty, mortgage holders can change payments with their mortgages for the next 2 or 3 months.

Linking to dividend paying stocks, often the government will turn to these companies to help them because regulations tend to help the companies make profits. By doing something the government is there to help the bigger corporations when they need help. The relationship between the government and profitable companies is just not when things are going well, but shows the value when the cycle turns. What do your investments do when the economy is in slowdown?

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

In every portfolio an investor has something that they think is sexy and hopefully also profitable. If investors like cars and most do, then they want to own shares in the brand they either wish they own or would like to have. For sometime Tesla has been considered a sexy brand, but one brand that has been sexy or flashy for years is the Porsche.

In an article by Jan Schwartz and Emma-Victoria Farr of Reuters, Volkswagen or VW owns the Porsche brand and wants to have an Initial Public Offering or IPO of the company or it will spin it off. For VW, the Porsche brand is expect to have a valuation in the area of $78 to $111 billion. If it comes at the high end, it will be the largest in German history and the biggest in Europe since 1999.

Porsche’s status as a luxury brand able to raise prices makes it a money maker for the VW Group. Porsche’s operating profit jumped 22% as compared to the mass marketed oriented VW which was up 8%.

VW will decided to approve 25% plus one share of ordinary shares in Porsche AG to be sold to Porsche SE which would give the Porsche and Piech families a blocking minority.

Qatar Investment Authority which owns 10.5% of VW and 17% of its voting rights would be a strategic investor in Porsche AG preferred shares in the case of an IPO.

Linking to dividend paying stocks, there was a wonderful ad a number of years ago, the owner said I liked the product so much I bought the company. In this case if you like or love Porsche cars you can own shares. As a luxury brand it can raise prices and its loyal customer base will continue to buy and profits will be made. Expect the IPO to be over scribed.

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

Every company and consumer uses a supply system and often times if the organization has a long history of reasonable good service, both sides are satisfied to keep the relationship going or renewing on a regular basis. When the relationship was entered into, both sides believed the service they were getting was fair. It is the same with countries, they try to do what is good for their citizens. In the case of Europe, after the Berlin Wall fell, European countries agreed to buy Russian oil and gas and in many countries the percentage that Russia supplied reached 40%. The system worked well until Russia decided to invade Ukraine and European fearing Russia’s possible next move imposed sanctions on Russia. Most people thought Russia would find a way to retreat or save face or not continue the invasion since they were losing or had not accomplished whatever objectives they set out to do.

In an article by Susanna Twidale of Reuters, Europe has accused Russia of weaponizing energy supplies with the result prices of natural gas have increased 400% and winter is coming. Russia through Gazprom sends gas to Europe through the Nord Stream 1 pipeline and it has been running at 20% capacity. Russia blames Western sanctions and technical issues for supply disruptions. The technical issues including somehow the people at Gazprom have forgotten up to keep the pipeline running, because the pipeline is slowed down for maintenance issues. Russia forgets other countries including Germans know how to run pipelines.

Since the invasion, all the European countries have been looking at other options and suppliers, but gas is moved by pipelines and it is hard to change pipelines and refineries to fit other countries. Germany which had pledged to shut down nuclear facilities have extended their lives.

Klaus Mueller, president of the Federal Network Agency regulator, said in August that even if Germany’s gas storage were 100% full, they would be empty in 2.5 months if Russian gas was completely halted.

Linking to dividend paying stocks, all companies have supplier relationships and one hopes that they are long lasting and each company helps the other to be able to help each other in times of crisis. When you look at your investments, do you see good relationships?

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

Former President Trump had a policy called America First which was designed to encourage manufacturers to have some manufacturing in America. The results were tepid at best but it did make good copy at his rallies. President Biden wants computer chip manufacturers to manufacturer in the US and has come up with $50 billion to encourage the actions. Meanwhile, big tech companies including Apple and Google have been shifting some manufacturing from China but they went to Vietnam and India.

In an article by Daisuke Wakabayshi and Tripp Micke of the New York Times News Service, for the past 40 years or more China was the number one place to go to lower costs on manufacturing. The rising geopolitical tensions and the pandemic-induced supply chain disruptions have sent the high tech electronics to other countries besides China.

China has the dominant position of well over 90% in consumer electronics manufacturing, but companies are slowly moving to other countries. Apple is producing iPads in northern Vietnam, Microsoft is producing Xbox game consoles from Ho Chi Minh City, Vietnam and Amazon’s Fire TV devices are made in Chennai, India. These devices used to made in China and the effect is according to purchasing managers survey, factory activity in China has fallen for 2 months.

Foxconn, Apple’s largest contract manufacturer recently signed a contract to expand their facility in Quang Chau Industrial Park located outside of Hanoi, by $300 million which will generate 30,000 jobs. The pay in Vietnam is $300 a month for an entry level position which is good pay relative to farming but is more than 50% less than the $650 Foxconn pays in Shenzhen, China.

Linking to dividend paying stocks, all companies develop links or partnerships with other companies and for the most part the consumer does not fact in where the product is made, but does it work and how easily can it be fixed. In the world there is always a country will lower wages, China is finding out with a rising middle income group, there are other countries than can do manufacturing for less. One would think with the advent of more robots, they could be done closer to the head office, but things move relatively slowly, until there are consistent problems then options are examined. For your investments how much are your concerned where the manufacturing is done?

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