Many people around the world that a new technology or new processes eventually will enable companies and the world to do better. In the auto sector, the belief is very strong, with each new manufacturing plant being able to produce autos better at a lower price for the company. How that translates to the consumer is a different story, but to the company margins are preserved.

In an article by Victoria Waldersee, Jan Scwartz and Nadine Schimroskiz of Reuters the biggest German auto company and the pride of German engineering VW or Volkswagen is building a new plant in German to compete against Tesla. VW is the world’s second largest car maker behind Toyota with a stable of brands including Skoda, Seat, VW, Audi, Porsche and Bentley. In the European market it has a 25% share of the EV market ahead of Tesla of 13%.

Tesla recently opened a Giga factory outside of Berlin and it can produce a model Y every 10 hours, it takes VW 3 times as long to produce the ID.3. VW is building a new plant called Trinity EV which should be up and running in 2026. The plant will use large die casting and cutting the number of components in its cars by several hundred. VW brand production chief Christian Vollmer said the goal is to set the standard in the world and be at 10 hours matching Tesla.

Tesla’s Giga plant can produce 17 components in under 6 minutes. It uses 2 giant casting presses or giga-presses applying 6,000 tonnes of pressure to make the rear of the car. The company will be installing 6 more giga-presses to make the front end of the car.

JPMorgan Chase predicts Telsa’s factory will produce about 54,000 cars in 2022, 280,000 in 2023 and 500,000 in 2025.

VW can produce the Tiguan or Polo in 18 and 14 hours in Germany and Spain respectively but its electric ID.3 made in a factory juggling 6 models from 3 VW brands takes about 30 hours.

VW hopes to build 40 million vehicles worldwide on the new platform called the Scalable Systems Platform with half of the vehicles electric by 2030.

Tesla which produced 936,000 vehicles hopes to produce 20 million vehicles by 2030.

Linking to dividend paying stocks, when you examine the expectations of the above those are large numbers of production and sales and many things have to go right if they are to succeed. The capital costs will be large, but if the auto companies do it, the margins can be very good. We consumers often point to things companies can do, but for companies when they commit to change there are many costs. As investors, we expect the companies to bring the best technology to the making of the vehicle and be rewarded with good margins.

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

Every company in the world tries to brand itself to consumers to they often use a short form because it seems simpler. The company’s make a decision and then use the symbol on social media where symbols work very well. All is good until something in the world changes.

In an article in Reuters the insurance giant Zurich Insurance of Switzerland spent time and effort to brand itself with a white Z on a blue background. The traditionally conservative folks in Switzerland were very happy and the logo was used around the world. All was good.

Then Russia invaded Ukraine and a white Z became a symbol of Russian support. The letter Z has been used as a marking on Russian military vehicles taking part in the conflict and adopted by Russians supporting the war where it has been prominent on flags and at pro-Kremlin rallies.

Zurich Insurance has removed the Z symbol and replaced with the name Zurich.

Linking to dividend paying stocks, no one can control which symbol is used by people for causes both which the company supports and does not support. It is important to the public relations people to monitor rallies to see what symbols are used. If the symbols are used, which the company uses then it has to make a choice.

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

The one constant that everyone in the world will in counter is what to do with money? Some will have plenty, some will have not enough and all will have something to do with money. In an ideal world, there is enough to satisfy your basic needs and have investments. If you think about America, one of the richest countries in the world and hear 40% of Americans do not have an extra $400 in an emergency account, because they are living paycheck to paycheck, you can either question the system or look for guidelines to ensure you are never in that situation.

The writer belongs to Toastmasters club and one of the speakers recently heard from was a financial planner with over 30 years in the business. He caters to people in the $5 million in assets plus group, but he had his start working with average folks. His name is Tomas Ohannessian and his email is tomasglobal@yahoo.com. His 5 steps to building a strong foundation are:

1. Mind Blueprint – Tomas studied architecture as a student but moved to financial services as a profession. As an architecture you need to start with a strong foundation and then build the walls and roof to last your lifetime. The foundation includes you, spouse and family and support systems.
2. Living within your Means – there is a book called the millionaire next door, many people are young enough that a million dollars meant living in the best part of town and having money in the bank. However, the reality is where you live often dictates the typical of lifestyle you live. If you live in an area where your neighbors go away for vacations twice a year, send their kids to private school and drive the latest vehicles, you will tend to do some or part of the same thing. If you live in a different area, you might go on vacations once a year, send your kids to public school and drive an older vehicle because you like it. One area will be more expensive than the other because we are human and there is an element of “keeping up with the Jones” or doing what your friends do in your life. Try to live within the income you receive.
3. Understand Credit – after you start working the banks will offer your credit in mortgages, credit cards and car loans. Depending on what you do, you may be offered other types of credit – lines of credit, investment loans, etc. Some of the credit is wonderful, some of it is expensive. You need to know the difference and learn how credit works for you. You need to understand compound interest.
4. Invest in Yourself – everyone needs savings and money in the bank to do something, what you wish to do is up to you. One of the best methods is at your financial institution start putting money in a fund whether you start at $10, $50, $100 a month or paycheck, you need to start. The compound interest will work for you. It feels easier as the fund becomes larger. The number can be 1% up to 30% of your after tax income as the nike ads say Just Do It.
5. Autopilot – ensure the payments are regular they automatically go out of your account or you do not have that to live your everyday life with. The money is for piece of mind, the future, to allow compound interest work for you. At some point when you need it, it is there.

If you do the above you will be in the 60% group which has savings and more financial choices. It will seem hard at first, but learning about compound interest will allow you to many choices and eventually from a financial perspective that is what life is about.

Linking to dividend paying stocks, one of the reasons to invest in dividend paying stocks is dividends are paid to you and then you have choices of what to do with the money. Do you buy more of the same? invest in something else? use the money for other things? the important issue is having the choice.

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

Likely you will have heard or remember 9/11 as it relates to the World Trade Center building in New York. One of the things you may or may not know is for a long time, the buildings at the World Trade Center were relatively inexpensive office space so a number of companies including the New York Stock Exchange had their servers in the building (they also had back up in New Jersey or across the river from New York City). When the tower came down, the Stock Exchange was down but it was up and running 2 days afterwards on a reduce workday. It took about a week to become normal.

In the Russian war against the Ukraine, the western world imposed financial sanctions on Russia and one of the many elements was the Russian Stock Exchange was closed. There are a number of Russian stocks which trade on the London Stock Exchange that have not traded since the sanctions and maybe there are good speculative reasons why you might wish to buy when the sanctions are off.

In an article from Reuters, energy and metal firms led a jump in Russian stocks on the Russia Stock Exchange. According to Boris Blokhin, head of Moscow’s Exchange stock department said they were trying to do everything possible to open all segments of the stock market soon.

When the war started, because of Russia’s supply of oil and metals coming to a halt or slow downs, the commodity price of oil and metals have increased.

The government says its National Wealth Fund would buy up to $13 billion or one trillion rubles to buy stocks or support the market.

The Moscow Exchange said 567,000 private investors had accounted for 58.2% of the volume, with 121 professional participants conducting the remainder.

Linking to dividend paying stocks, every country which has a stock market the government put great faith and resources to ensure the market functions as well as possible. In signs of trouble, governments ensure stock markets are open and trading to reflect the future. From a value perspective when the sanctions are lifted (meaning Russia has lost) the economy will become open again and the large companies will be profitable once again. It may take time, but there may be value in Russian stocks when the London Exchange trades them again.

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

In the world of commodities, rules have been established over the years, first the dominate currency was the English pound, then it moved to the American dollar. In another century it might move to another currency, but the world accepts the traditions. Every commodity producing country would prefer the other countries pay for their goods in their currency, but we are not there yet.

In an article by Nina Chestney of Reuters invaded or stared a war with the Ukraine, one of the measures of the western world is to limit the financial system in Russia. No or very limited outside movement of money into or out of Russia. Countries would pay into an account which Russia would have access to once the war is over and sanctions are lifted.

Russia President said countries which are abiding by the sanctions would have to pay rubles for the gas which Russia sends into their countries (for example Germany in 30% user of Russian gas and Italy has been receiving 40% of their gas from Russia). In total Russia accounts for 40% of Europe’s consumption of natural gas or roughly $800 million of gas a day. The President reassured Europe he is not turning off the supply, the changes only affect the currency of payment.

The President order the government and central bank to come up with a solution within a week and Gazprom would be ordered to make the changes to clarify how they might pay for the gas. According to Gazprom, 58% of sales of natural gas was settled in euros, 39% in US dollars and 3% in British sterling.

Leon Izbicki an associate at Energy Aspects, said it was unclear how easy it would be for European clients to switch their payments to rubles given the scale or size of the purchases, however there is nothing in the sanctions in place that would prevent it.

Linking to dividend paying stocks, when countries sell outside their borders they have currency issues. In an ideal world the currency of the country outside the border does not fluctuate too much as it is a stable well run government. In reality elections happen, different governments do something which they think will benefit them and often times affects how currency traders see their currency. Companies pick a currency which allows them to hedge to keep stability in the exchange rates, when the amount becomes large it can affect profitability. As long as the company is making money on the sales and on the exchange, it can do business, if not then it has to ask are the sales worthwhile?

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

Ever since the Russia war with Ukraine, prices of oil and other commodities have risen and many people have bought oil stocks and hopefully the price has gone up. Generally when a crisis happens we look domestically first, but afterwards we need to look around to the international world. For if a domestic industry has benefited that means an foreign industry has benefited. In this case the non domestic industry is Saudi Arabia.

In an article by Saeed Ahar and Maha El Dahan of Reuters, the biggest producer of oil in the world is Saudi Arabia and a couple years ago, the Saudi Arabian Oil Co went public which means it reports its results. The company profits doubled in 2021.

Saudi Arabian Oil Co or Aramco made $110 billion in net profit up from $49 billion a year earlier. The net profit was in line with analysts’ expectation of $106 billion. Analysts are expecting net profit of $140 billion in 2022. The dividend was $75 billion.

Saudi Arabian Oil Co says it would boost capital expenditures (capex) to $40 billion to $50 billion this year up from $31.9 billion. The company expects to have production of 13 million barrels of oil a day by 2027 and to increase gas production more than 50% by 2030.

Linking to dividend paying stocks, if your investments are linked to a commodity and the price of the commodity goes up and stays higher, expect higher dividends and higher share prices. There are many analysts following every industry, which means you can have an idea when prices are expected to go up and expected to go down, just try not to time the market. You will know when prices are down when dividend payments are cut, however being positive when prices are up, expect higher dividends.

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

If you listen to Kevin O’Leary of Shark Tank when interviewed about what he is buying and selling, we will often say if a stock goes above 5% total holding I sell or trim my position. He does this because the stock has made gains and for Mr. O’Leary the risk – reward position will change if he does not trim positions. There are many other funds which do the same thing, it is a good discipline to have.

Another type of fund is the US defined benefit pension funds, when they are set up they offer a set percentage of 60% stock and 40% fixed income combination. In stable times or in low growth the funds do not have a large effect on the market. However, they have a reporting regulation for the government which is the end of March. At the end of March, they need to start April with the 60/40 combination.

In an article by Scott Barlow, a report by JPMorgan quantitative strategist Nikolaus Panigirtzoglou says the US defined pension funds have about $7 trillion in assets. The 60/40 asset allocation needs to be adjusted and $126 billion of selling of fixed income assets and buying equities needs to be done. In Norway the world’s largest sovereign fund and Japan’s government pension fund needs to shift $62 billion between asset classes after the end of March.

Linking to dividend paying stocks, there are many variables on the stock market and when the largest players are institutional investors, it means they have reporting requirements which must be met. This means sometimes there are rational reasons why the markets go up and down, sometimes there are less rational reasons, but in the end if a company earns a profit that can pay a dividend, it will be worth more in the long run.

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

If you consider a tax haven of money, one of the critical aspects is data is hard to find, there are estimates but no one really knows for certain because then people might have to do something about the number. Generally in official ideas the number is always lower than reality and to the critics of the system, the number is always higher than reality. Then a crisis happens and the truth slowly comes to the forefront.

In an article by Oliver Hirt and Brennan Hughes Neghaiwi of Reuters, the Swiss banks hold up to $213 billion of Russia wealth. When the western world imposed sanctions on Russian wealth, few expected the Swiss or any jurisdiction that holds tax free assets to reveal or put holds on the money inside their vaults. However the Swiss Bankers Association (SBA) estimated the banks holds $213 billion of Russian client money in offshore accounts.

The SBA stressed this was small compared to the overall assets held in Switzerland. The share is in the low single digit percentage range (around 5%) of the total cross border assets deposited in Swiss banks.

Linking to dividend paying stocks, in every crisis new information is released because the other side has its estimates. The company has to be closer to the truth, not the accepted wisdom because the truth eventually comes out. If the company is not giving the truth, others wonder about the numbers and ask journalists questions so the truth does come out. When a crisis happens and the numbers you expect from your investments are not the same or the expected, it is time to find alternatives.

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