In every industry, but particularly in the financial system there are alternatives to the way money flows from one institution to another. Although there are alternatives, the reality is some systems dominate the others with scale, reliability and confidence.

In an article from Reuters, Russia has been trying to implement new systems that can go around the normal way of doing things. Russian Finance Minister Anton Siluanov was at a meeting with BRICS group which stands for Brazil, Russia, India, China and South Africa.

Russia has set up its banking messaging system known as SPFS, as an alternative to SWIFT. Russia also implemented its own card payment system MIR in 2015. The system known as SWIFT is a foundation of the existing monetary and financial system based on the US dollar. The card payment system is the one used by VISA and Mastercard, both suspended operations in Russia due to the war with Ukraine.

Russia had experiences with sanctions and expected more sanctions (although not to the degree they have been placed on the country during this war) and have trying to implement systems to go around although one can expect they are similar to small businesses and would need to ramp up volume and dependability.

Linking to dividend paying stocks, in every industry somewhere there are alternatives to doing something differently, most are small scale but they exist. If a company gets overconfident thinking they have the only solution, customers will find other solutions. If you use the sports analogy, the LA Lakers won the championship 2 years ago in basketball, this year they did not make the playoffs. Hopefully your investments stay competitive for years to come but always remember there are alternatives around the corner.

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

When you receive extra cash you have a number of choices – pay down debt, buy something new – add to the house or vehicle, purchase more stock. A company has similar choices and many companies are flush with cash – give extra money to shareholders (special dividend), give money to workers, buy other companies, purchase their own stock (stock buybacks).

In an article by Noel Randewich of Reuters, S&P companies purchased $880 billion in stock last year, up from $520 billion in 2020. In 2022, Goldman Sachs expects the number to be over $1 billion.

When a company purchases shares, the number of shares outstanding falls which has an effect on the P/E ratio or price to earnings per share. The lowering of the number of shares has an affect on the earnings per share which means the Earnings per share will increase and the P/E ratio will fall. The attraction of possible value helps increase the price of the shares as investors bid up the stock to where the ratio was before the company bought the shares. For example if the normal P/E ratio is 20 and the company buys stock, the ratio falls to 16. Investors will tend to bid up the stock to 20 P/E which translates into higher stock price.

EPFR Informa Financial Intelligence analyst Winston Chua who tracks new buyback announcements, said companies are aggressively repurchasing their shares. New buybacks in March reached $74 billion compared to $54 billion in March 2021.

Linking to dividend paying stocks, there are many methods to benefit when a company is profitable, dividends and increasing dividends is one way, reliable stock buybacks allows for a total return to increase over the years. There are many options when a company is profitable, owning shares is a relatively low risk as long as the company is profitable.

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

When Russian invaded Ukraine one of the responses of the west was to impose sanctions which is a good thing. Sanctions are a double sided sword because the companies are encouraged to diversify their operations and be global companies.

In an article by David Shepardson and Karen Freifeld of Reuters wrote about Boeing and Russian air fleets. The world of airlines is a monopoly betweein Airbus and Boeing. The 3 big Russian airlines are Aeroflot, Azur Air and UTair with over 170 Boeing planes. The big cargo airliners are Volda-Dnepr Group, AirBridge Cargo and Atran.

The US Department of Commerce is ensuring that parts and maintenance to the Russian operated Boeing planes do not happen. If that does not happen, the planes are unsafe to fly and are grounded. The Secretary of the US Commerce is Don Graves and he believes the export controls are working. New export licensing requirements have decreased 99%.

Linking to dividend paying stocks, in relative normal times, Boeing is one of the US largest contributors to the exports from the US and generally that is a good thing for airlines around the world as goods, services and people move freely. At special times, the government imposes sanctions and exports fall. Does the government help its domestic companies or do they take the hit and hope the government helps them in other ways. Often times the government works with and for companies, sometimes the risk is high but that is how the industry works. If you invest in a company such as Boeing you should understand some of the risks.

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

In everyday life everyone is influence by someone and on social media you can follow people that are known and receive money as influencers. The more followers a person has, the more various clothing labels will give to the person to wear and that should translate into sales. Influencers have been with us for generations and will be with us for a long time to come.

On Wall Street, one of the biggest influencer is Elon Musk of Tesla fame because his stock has done very well and when you done well once, people believe you can continue to do well.

In an article by Krystal Hu of Reuters, Elon Musk announced he owns 9.2% of Twitter shares and millions of people bought shares sending the price up 25%. According to Vanda Research most of the buying was done by retail investors and the $152 million inflow into the stock was the largest of all stocks and ETFs on US exchanges for the day.

Elon Musk besides of Tesla fame also owns SpaceX and his net worth according to Forbes magazine is worth abut $290 billion.

If you think about Twitter, the issue is can Twitter attract more advertising dollars to be profitable given its short number of characters that defines Twitter? Can Twitter generate more revenue from subscription services? Some retail buyers believe Mr. Musk can help monetize the platform and Mr. Musk has joined the Board of Directors to have input.

Linking to dividend paying stocks, every industry has its influencers and as long as they are successful, people will pay attention. In investing unless you have a very short time period, over the long run it is good to invest in profitable companies that can pay dividends. Everyone is influenced by someone but it is helpful if the person you are influenced by has gone through some cycles of the economy and still be successful.

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

Diversification is a wonderful thing until it is not. A month or so ago, China which has the second biggest economy in the world and 270 Chinese companies have a listing on US exchanges. For many people and institutions, the joint listing were both a good method to invest in China and provide diversification. It worked well as Chinese companies made money in the Chinese marketplace in the global marketplace. Then the regulators made noises.

In an article from Reuters, China has proposed revising confidentiality rules involved in offshore listings, removing a legal hurdle to Sino-US co-operation on audit oversight while putting the onus on Chinese companies to protect state secrets.

The US and China have a long running audit dispute and Washington put a line in the sand to fix the issue or delist from US exchanges in 2024. The big issue is who could conduct on-site inspections of Chinese companies – China said Chinese regulators, the US said US regulators.

The Chinese Regulatory Commission (CSR) will facilitate cross border regulatory co-operation including joint inspections which will safeguard interest of global investors.

In mid March, Vice Premier Lin He said talks between the regulators were making progress. (some issues go to the highest levels of government).

Linking to dividend paying stocks, one of the reasons, but not the only reason investors in invest on the stock exchange is because of the rules behind the scenes in the markets. Many believe the western countries stock exchanges have greater regulation which makes the rules reasonable for all investors. On some exchanges the rules are written down but not enforced which makes investor beware. If things go well and the investor makes money, the regulations are less important. If the investor loses money because the system seems rigged, then investor beware and it is better to go to more regulated exchanges.

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

The war between Russia and Ukraine has immense human upheaval, but it also has economic consequences. When one country invades another, every other country has to decide what to do about it or even if they want to do something. A number of years before, Russia was essentially given the keys to the barn door when it invaded a part of Ukraine. This was different, perhaps the world had changed, perhaps Ukraine was seen as mort important, but this time the western countries said we will not allow it to happen, but they could not send their troops because that would mean an escalation of fighting. The route imposed was sanctions. Russia similar to every country in the world imports and exports goods and services which run the economy. In Russia’s case they are a major oil and gas producer and through pipelines send the commodity to China, India and Europe. Both China and India have not stopped exports, Europe wishes it can but Russia is a major supplier. The west imposed financial restrictions on money held outside of Russia.

In an article by Eshe Nelson of the New York Times News Service the issue is how did Russia pay its debts. Russia similar to many countries around the world issues bonds and buyers come from around the globe because Russia has oil and gas to pay for the interest and principal payments. When the western world imposed sanctions, they froze the assets of the Russian Central Bank or about $500 billion in gold and cash held in banks around the world.

The Russian Central Bank increased interest rates to 20%. Then it ordered all companies in Russia to convert dollars and euros to Russia rubles. This demand has increased the value of the ruble which had fallen to cents on the US dollar. This was a short term solution lead by the government and now the President has ordered Russian gas customers to pay in Russian rubles rather than Euros or US Dollars. Russia supplies 40% of the gas used in Europe and gas sales bring in $850 million a day.

In early April, there was a $2 billion bond due for payment in US dollars. The week before, the Russian government went in to the bond market and bought 3/4s of the issue in exchange for rubles. That left $554 million to be paid.

A month ago, shortly after the war started, Russia owed $117 million and JPMorgan in New York and Citibank in London sought approvals to handle the transactions. The payment was made, however the end of the timeline is May 25. On May 27, about $100 million in interest payments are due.

There are corporations in Russia and they have bond issues and one example is Severstal, the steel giant it ran out of time to pay a $12.6 million interest payment and defaulted.

Credit ratings around the world have withdrawn their ratings for entities in Russia. Without access to credit, the world is a smaller place.

Linking to dividend paying stocks, access to and using credit is a foundation for an economic society to function. The longer the war, the less credit Russia has and the more expensive it is which means people and companies do less. When they do less, individuals consume less and the cycle continues. Shortly an official recession will be called because the economy is half functioning. When you examine what is happening in Russia, you can see it happening in many companies around the world, they can not pay debts and go bankrupt or do Chapter 11. When you are investing, the ideal is to stay away from companies doing Chapter 11 because you will own less, the restructuring will mean the bonds holders own more. The world is not perfect, but if you have set guidelines when to look for alternatives, hopefully you can find alternatives and try not to loose money.

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

If you were going to buy a new vehicle what kind would you buy or lease? There are a variety of options to choose from and most of us still need not just want a vehicle. Do you buy an internal combustion vehicle, an electric vehicle, a hybrid, besides the make and color of the vehicle.

In an article by Aishwarya Nair of Reuters, the US automakers reported the quarterly sales in early April and they were good. (auto dealers seem to be enjoying themselves at a Las Vegas convention). The sales were lower than a year ago but sales of electric and hybrid were up.

GM reported 1st quarter sales of cars and light trucks would fall to 14.1 million annually from 16.8 million a year ago. In terms of trucks and SUVs, sales were up as compared to last year.

In France, sales of electric and hybrid vehicles took 40% of the market, which is the first time they were higher than conventional gasoline models.

Toyota, which in 2021 over took GM as the top selling automaker in the US, continued its position with increased sales of Lexus hybrid and electric models. Jack Hollis, senior VP of automotive operations at Toyota North America does not expect America to shift from 3/4’s of the market is trucks and SUVS.

GM is seeing high demand but because of the strong job market and the supply system including computer chips is getting better. GM expectations is an ordinary a good jobs market should translate into light vehicle sales in the 17 million range.

Linking to dividend paying stocks, for your investment is good to know what the normal expected range of sales is. If the company delivers for the sales as expected, you can be contented and ask different questions about why and how. For auto makers we know the market will change in the future to more electric and hybrid, how fast the consumer changes is a different story which the automakers have to adjust to meet reality.

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

Every company at some point has a philosophy of whether its workers should unionize or not. In the financial sector, the answer is no, in the electrical utilities the answer is yes. Each of those sectors generate incomes to be profitable to be able to be able to be long term owner of shares with little reason to be concerned. In general the major banks are too big to fail, and the utility regulator tends to increase prices to consumers so a respectable profit is made each year by the utility.

In the retail sector, the biggest anti union companies have been Walmart and Amazon, it also happens those 2 companies are the biggest private sector workers in America. In the case of Walmart, if a store votes to unionize, in the past Walmart has closed the store due to market conditions changing. Both Amazon and Walmart use consulting companies to counteract any union organizing and they are willing to pay the price of the consultants (Amazon spend $4.3 million on anti-union consultants) because they do not want unions.

In an article Karen Weise and Noam Scheiber of The New York Times News Service, Amazon lost a union vote in Staten Island warehouse (Staten Island is part of New York City). In the world of Amazon, they pick locations where union activity is low and the threat of a union is kept low. However there were 8,300 people working at the Amazon warehouse, and 2,654 votes were cast for a union and 2,131 were cast against and the National Labor Relations Board has certified the vote.

Over the past 2 years, Amazon has hired people and now has 1.6 million working for it globally. As opposed to the 2nd Headquarters where cities had bidding wars for the office jobs, the people at the warehouse are essentially timed every second they are in the building and expected to be sorting packages. The workers had concerns, although Amazon does start at $15 a hour minimum wage. In the course of trying to do the work needed to form a union, a number of the organizers were fired and very securely watched. Most of the effort by the organizers was to go to the workers home and talk about the company. In this case the small guy won, then the hard work will begin for expectations of what the union can and can not do for the concerns of the workers.

In the world of unions, all the unions were waiting for the first Amazon facility to be unionized and then they are hoping more will go down that path and the unions have a war chest for that action.

Linking to dividend paying stocks, when you invest in a company your interest is how well the company performs to make a profit and pay dividends. Your interest is secondary on how it does what it does. As you own the shares for a while, you will be more interested in the how but if the company does not deliver to what you think your return should be, there are alternatives.

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

As an investor, one of the most important things to learn is the word no. There is always somebody pointing to the next great thing and once in a while it is but most of the time is not. Learning to say no to what you invest in, hopefully comes with age or experience. Having said that, as an investor is important to know a little about the trends and you can either watch from a far or having a very small portion of your portfolio be allocated to stocks you take a flyer on. Many will soon be underwater but you will know what to stay away from, which is experience talking to you.

In an article by Saqib Iqbal Ahmed of Reuters, retail investors have continued to buy meme-stocks such as GameStop and AMC Entertainment.

Retail traders’ net purchases of stocks and ETFs totalled $5 billion compared to the one year weekly average of $3.4 billion, JPMorgan strategist Peng Cheng wrote.

Dan Pipen, chief executive of TradeZero noted retail is seeing if speculative trading still works and is trying to catch the high-flyers of the day.

AMC stock went up, however it is important to remember GameStop and AMC are down 52% and 59% from their closing highs from last year. Bitcoin is down 30% and ARK etf is down 56%.

Linking to dividend paying stocks, watching or listening about stocks rallying is a wonderful thing, but if you are a buyer of speculative stocks and they are down 50% that means if you sold you lost half of your money. The number one rule in investing is try not to lose money. One really good way to do that is buy profitable stocks which pay a dividend. The rallies may not be that exciting but if the stocks are up money, your gain last year was a healthy 20% with very low risk. One can not expect to that all the time, but it is better than losing money.

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