When you are investing invariably you will be interested in examining companies that have a commodities focus, when prices go up, these companies share price jump. It is hard not to be interested, unfortunately unless you are very disciplined, you may own some of the shares for a long time if the price of the commodity falls after you have bought it. Until the next super cycle comes along. The key to investing in commodity related companies is understanding at what price of the commodity does the company make money? Companies report the number in their Annual Reports and analysts write about the number in their description of the company.

Understanding commodities also allows you to understand the world around you. For commodities are found around the world, it influences the governance of the country and equally important how and why the commodity price moves up and down.

In the book Gold, Oil and Avocados by Andy Robinson, published by Melville House, Brooklyn, New York, 2021 the author focuses on Central and South America’s economies through commodities.

All developed countries or G7 countries and more likely the G20 countries have something similar to the US’s Munroe Doctrine which you may have heard President Trump’s Cabinet members talk about. The Monroe Doctrine is from President Munroe telling the other European countries that essentially these countries are in our backyard or it is our sphere of influence and you stay out. That could have meant many things, but one aspect is we want and have a say in how that country operates.

The Monroe Doctrine is not particular to the US, history teaches every country that sent explorers to another country often times the second or third trip declared it as their sphere of influence. It is easy to look at British Commonwealth Countries; Britian using the British Navy to sell opium to China; countries finding raw materials for their industry in another country and then the prime export market became their country; one can see China’s Belt and Road program along the same lines.

The reality is industry is formed and an example is the steel industry in the US. The industry was formed in Pittsburg, Penn because of the location for the steel mill needed water, coal from nearby West Virginia, iron ore from Minnesota, the money came from Wall Street. This is what is learned in the school textbooks. It was all from the same country and made great practical sense. What happens when either the costs to mine the raw materials goes up? are there less expensive alternatives?

In the book, Cleveland based Hanna Mining and US Steel sent their geologists around the world or particular the US’s spheres of influence and discovered a great find in the Minas Gerais state of Brazil. The iron ore was mined, a railroad built to transport the ore to a port and then shipped to Cleveland and onwards to Pittsburg. Since the book is written showing the negative effects of corporate development, what tradeoffs did the government of Brazil give to the US to ensure the ore moved in an orderly fashion? Part of the answer is ensuring a government in power to do the work that benefited the US interests.

At the moment, the term rare earth minerals is in the news and some of those deposits are in South America. If a country says we need to have sources of rare earth, what does that mean?

Linking to dividend paying stocks, in investing we all want to make more money, and one method is to buy commodity companies when the price is low and watch the price go higher which is reflected in higher stock prices. The trick is eventually to sell at a higher price and move onto the next “hot” area and repeat. If you are not good at selling at higher prices, a way to protect yourself is to buy companies which can pay dividends to ensure you get a reasonable return, when the stock price goes up it is a wonderful bonus.

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

Every President has the ability to appoint people to their administration but how far and how much should they be able to do? This time around President Trump has an agenda, although one might be concerned with the next President or the next one, what will their agenda be and how much power will rest in the office. Most of us have grown up with the idea that Presidential authority needs to be checked in balance and out of a 8-year two term President, the last 2 are essentially are on hold or lame duck till the next President. President Trump is different this time. This time, President Trump wants to challenge the more accepted norms and what agency have more independence.

In an article by Christopher Rugaber of the Associated Press, one of the more independent agency in Washington is the Federal Reserve Bank. The agency which among other things determines interest rates, regulates banks, ensures enough cash in cash machines and the list goes on. The financial world needs an independence from politics because politicians in general want lower interest rates. Is that good for the economy? does it battle inflation?

President Trump has decided after one of the Directors of the Federal Reserve resigned from their post, to go after Lisa Cook. In the law courts, the Department of Justice lawyer said President’s Trump tweets is a notice and President Trump has the authority to fire an Governor of the Federal Reserve. Neither mind the Federal Reserve was set up to be independent, the Directors are staggered to ensure no President can appoint a majority, never mind past law cases over 112 years support the independence. President Trump the prime rate to be 1.3% rather than the 4.3% it is now. The Supreme Court has signaled the President cannot fire Fed officials over policy differences, but can do so “for cause”, typically meaning misconduct or neglect of duty. Ms. Cook has not been charged with any crime.

Ms. Cook is the first Black woman to serve as governor. She is a Marshall Scholar and received degrees from Oxford University and Spelman College. She was a professor at Michigan State University and Havard University’s Kennedy School of Government.

As the case continues, the Supreme Court said Ms. Cook job is safe until a later court date.

The Federal Reserve has to deal with President Trump’s policies on tariffs which are inflationary or similar to a tax cut on the average consumer because the importer pays the tariff and eventually, they are passed on the consumer of the product. It would take some time in the supply system not to import the same item into the US and if that price was lower than the imported price. If the imported price is 25% lower, add the tariff and the imported price is add 15%, meaning the imported price is still lower why turn to domestic manufacturing? Would will likely happen and is starting across the country is prices are increasing to reflect past margins.

Linking to dividend paying stocks, as an investor you depend on various Boards and agencies for independence in the expectation of a level playing field. If the playing field is tilted toward political influence would stay in the game? What would your expectations be? Would you spend more time with political representatives to give you inside information? Would you trust the system? Most of us are smaller players in the game, but we believe the tilt on the game allows everyone to compete. If you go back to a time before deregulation of trading prices, it was hard to make money when the commission prices were so high. People bought stock and held for a long time because the brokers were making the easy money for little work. It was good that commission prices have fallen.

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

When Henry Ford invented the Model T and sold it at a lower price, as long as it was black, all the parts that went into the car were manufactured by Ford, most of it at is Rouge complex in Detroit. The system was left alone for decades and then slowly the big 3 companies Ford, GM, and Chrysler decided that they would rather spend their money on selling the finished cars rather than the parts that went into into it. The parts divisions were sold to investors but they had guaranteed customers as the big 3. A few independents companies managed to get a foothold and soon the Big 3 sold off their shares and the parts companies were independent. The big 3 could squeeze costs from the parts companies and the system evolved to what it was.

President Trump was elected for the second time and his signature economic piece is manufacturing in the US through the use of tariffs. The premise to is impose a tariff on every country as an incentive for the companies doing business is the US to manufacture in the US and sell tariff free. On one hand it has validity, if tariffs and other incentives are changed, then the process could produce more manufacturing in the US. On the other hand, over the decades of driving down costs, companies have operations in lower wage companies, tariffs does not fundamentally alter that lower costs. In addition, the tax system or incentive structure has not been changed. The other obstacle is countries that import into the US have developed feeder systems that will be affected. Is it wise to place obstacles to friends of your country?

In an article by River Akira Davis, Jin Yu Young, Melissa Eddy, and Hisako Ueno of the New York Times News Service, the economies of car making countries of Japan, South Korea and Germany are being affected by the tariffs imposed by President Trump. In all the countries, the cars that are imported to the US, have supplier companies. The Japan’s auto parts sector employs over 600,000 people South Korea has 330,000 employees and Germany supplier sector is a third of the more than 700,000 people in the automotive sector.

Besides tariffs the other aspect that the automotive industry is being changed with electric vehicles which need fewer parts. Supplier companies often have razor thin margins, so they do not have the levers to adjust to tariffs. The shift to EVs plus the rising competition from Chinese competitors is causing companies to consolidate. Tariffs are an accelerator to the process.

President Trump at the moment to impose tariffs, although it could be struck down because it was done under emergency powers, then Congress would have to vote for it. Similar to many what seems to be good policies, the Trump administration agreed to provide a partial, 2-year reprieve for auto part tariffs for companies that finish assembling in the US. This reprieve helps both foreign and domestic manufacturers.

The irony is for manufacturers to offset the effect of tariffs is the new operations in the US are filled with robotics and AI mechanisms or fewer manufacturing jobs.

Linking to dividend paying stocks, governments have the ability to change their policies when they have a majority and that can be a good thing. However, that often means companies have to adjust to new rules and ideally they are looking for consistency. The policies that are meant to help often have unintended consequences which typically means adjustments are needed. Companies employ lobbyists to try to ensure the effects of the unintended consequences are low to them.

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

If you think back to the property crisis in 2008, property values across the US and the world decreased which sent economies in recession. The leverage in the economy was too much, but asset prices went down. Eventually they bounced back, but it took time and it is important to remember over the time, things had to change. In the US case one of the big buyers of real estate was hedge funds which now rent property for income streams, because when there is a recession no one is borrowing money or interest rates are low. If someone has access to credit when asset prices are low, and given the economy should recover, eventually those assets can be sold off at a profit.

In an article by Daisuke Wakabayashi and Joy Dong of the New York Times News Service, China has been going through what the US went through in 2008, but the property market has not improved yet. China’s Evergrande Group was once China’s biggest property developer. It had a sports stadium named after it and the owner was a billionaire. Owning shares meant only an increase and the company was building thousands of apartment buildings which investors were snapping up. Then the downturn came in China and in late August of this year, the shares have been delisted from the Hong Kong stock exchange and there is still $300 billion in debt, the company is working through.

At its peak, the property sector accounted for roughly 30% of China’s economy. Proceeds from land sales to property firms filled local government coffers and many Chinese households turned to real estate, believing it was safe investment for their savings.

One of the great things about China is its infrastructure, on the property boom, new roads and railways and everything else in the urban landscape was built. The local governments made money on the property boom. Then things came to a halt and construction slowed drastically, which is good for absorption of inventory. However, this is China with a central government which encourages some construction for the good of the economy.

The National Bureau of Statistics reported the amount of new housing is down almost 20% from the same period of a year ago, but the number of vacant homes available for sale is more twice the historical average, according to Yicai, a financial media and research group backed by the Shanghai municipal government.

China South City Holdings, a mid sized developer was ordered to liquidate because it had not made significant progress to restructure its debt.

An example of the property market is a apartment in Hefei, an industrial city in central China, the property was bought for $330,000 with upgrades costing $80,000. The property was listed for sale, dozens of real estate agents came to see, but the offer was 15% below the asking price or a loss of $100,000 if the property was sold. With the price ever get back to peak price? The owner does not think so, so a loss on the property at some point is expected.

Goldman Sachs in a research report noted that July sales showed few signs of recovering prices in the real estate market had been linked to top-tier cities.

Even the top tier cities are removing some restrictions, for example to cut down on speculative buying, the government had restricted the number of units someone could buy. The restriction has been eased in Shanghai where people can buy unlimited number of homes in the suburbs.

Linking to dividend paying stocks, asset prices go up and down, when they are down they are great buying opportunities, however you need access to credit. One method to gain credit is buy profitable companies that can pay dividends, the dividends give you cash and you can use to buy companies with low asset prices, have patience as they slowly rise again. Patience is a virtue.

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

If you ever watched a YouTube video of how a Ford F150 or any other vehicle be made you will see many robots involved in the process. There is a reason why manufacturing plants used to hire many people and now they need less, people are still needed but there are less every year. This is good for the manufacturer because robots can work essentially 24/7, with some time down for regular maintenance. For every job function that involves a great deal of repetition, there is likely a robot for the job. If you watch a YouTube video about the Robot Games, the great deal will likely fall faster than you imagined.

In an article by Farah Stockman of the New York Times News Service, across the manufacturing companies are both large and small companies. Robots are fully utilized in the large companies because they have the resources and expecting long times of usage. However the robots are coming to the smaller companies.

To buy a robot could cost as much as $500,000 which is a lot of money for a small or medium sized company, but renting is feasible. In the article, a company called Formic, a Woodridge, Illinois company takes care of installation, training, programming and repairs. The cost is about $23 a hour roughly the same as a human.

In every smaller manufacturing plant, boxes have to be stacked on pallets to be shipped to distributors to be sent to the end customer. The stacking takes bending of the knees and use of the back, if you do it enough times, possible back injury will result. A robot solves the problem and the people can do something else and there is no particular reason to hire more people.

In the US, there are 244,000 manufacturers and 93% have fewer than 100 workers and 75% have fewer than 20, according to the Manufacturing Extension Partnership. Many of these small business lack the capital and in-house knowledge to integrate new equipment into their assembly lines.

Saman Farid, CEO of Formic says this is where the opportunity is. Formic rents robots to 150 different locations. Formic’s customers are often small, family owned businesses that have to turn down orders because of lack of staffing. Automating the most arduous and repetitive jobs allows them to redirect employees to more productive tasks, keeping them satisfied (and longer employed) and boosting sales.

AAA20 Group, a Las Vegas company leases robots called palletizers that stack boxes onto pallets and wrap them in plastic for $4,950 a month.

RobCo, a German robot-leasing firm, acquired the assets of Rapid Robotics, and will open an office in San Franciso and is equipping a manufacturing facility in Austin, Texas.

Robot rentals make up a tiny but growing slice of the overall market, according to the International Federation of Robotics, an non-profit group that publishes an annual survey of robot manufacturers around the world. About 113,000 transportation and logistics robots were sold globally in 2023, up 35% from the previous year. About 5,000 were rentals.

Linking to dividend paying stocks, similar to most industries the larger companies because of the volume and money involved if they do not do it, lead the way in ensuring, in this case robots are used. A few years go by, the robots begin to come down in price, other companies start using them and when it becomes affordable smaller companies use the same processes. Rentals mean a revenue stream and after that it is doing your homework to pick a public company that is making a profit and can send dividends to you.

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

With every government policy there is always the rise of unintended consequences. The policy is destined to do something positive, to correct a wrong, to make something better and often whatever has grown up around the old policy has to change. President Trump imposed tariffs and he was thinking of the big items that could be manufactured in the US. The reality is people send packages to family and friends as well as many small and medium sized businesses rely on shipments. The trend has increases with Amazon and relatively low cost shipping so people can order almost anything and they do on a smaller scale.

In an article by Demetris Nellas and Mae Anderson of the Associated Press, ever since tariffs were announced there was an exemption for low-value packages coming into the US. The reason was often it was family sending family items. The exemption known as “de minimis” was for packages less than $800 in value to come into the US duty free. According to US Customs and Border Agency it amounted to 1.36 billion packages sent in 2024 for a value worth $64.6 billion.

It was set to expire and postal services across Europe said they were no longer shipping the packages because someone has to pay the new import duties. In the UK, they would add a 10% duty before shipping.

DHL, the largest shipper in Europe note key questions remain unresolved, how and by whom customs duties will be collected in the future. what additional data will be required, and how the data transmission to the US Customs and Border Protection will be carried out.

A trade framework agreed to the US and the European Union set a 15% tariff on the vast majority of products shipped from the EU. Packages worth less than $800 are also subject to the tariff.

In the Netherlands, PostNL said the Trump administration is pressing ahead with the new duties despite US authorities lacking a system to collect them. PostNL is working with its US counterparts to find a solution. In government there would be overlapping agencies involved and that takes time to find a solution.

If you still believe foreign governments pay the tariff, you are mistaken.

Linking to dividend paying stocks, governments are a wonderful thing, and we all need them, but eventually they make policies which have unintended consequences. Companies do the same thing, but companies tend to be more adaptable, governments will say this is the policy, The people will acknowledge the problem, but the solution is with someone else and not them. Often times in business, the person to help find a solution is closer by, for your investments are the solutions really closer to the customer?

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

The two largest economies in the world seem to be on different paths when it comes to energy development. In the US, oil is king and anything which does not enhance it seems to conflict with government policy. In the US, the President does not like windmills, although there are windy parts of every country, however he wants to stop them. The President stopped or slowed down solar installations, although the sun shines everyday of the year.

In an article by Ken Moritsugu and Ng Han Guan of the Associated Press, the second largest economy in the world is China and they are working on the world’s largest solar farm on the Tibetan plateau. It will be the size of Chicago.

China is installing solar panels far faster than anywhere else in the world and carbon emissions are down in the first 6 months of 2025, compared to a year earlier.

China’s emissions had fallen in the past, but that was due to a recession, this time demand for electricity is growing, it is up 3.7% this year.

Lauri Myllyvirta, the Finland based author of the study and lead analyst at the Centre for Research on Energy and Clean Energy. She analyzes the data and publishes it on the UK based Carbon Brief website. China installed 212 gigawatts of solar capacity in the first 6 months, which is more than the 178 GW installed in all of 2024 by the US. Electricity for solar power has overtaken hydro power in China to become the country’s largest source of clean energy. Wind power contributed another 51 GW.

The Tibetan plateau in Qinghai province is largely desert and the solar panels allow sheep to graze on the plants and act as a windbreak to reduce dust and sand and slow soil evaporation. When competed there will be 7 million panels which is enough power for 5 million households.

Transmission lines connecting Quinghai province to Henan province is operational and another line to connect to Guangdong is under construction.

One can imagine, solar farms of this size have the ability to drive down the costs of solar panels, increase employment and provide for employment and whatever company to have relatively low-cost electricity to sell to urban consumers.

Linking to dividend paying stocks, every company in the world does a SWOT – strengths, weakness, opportunities and threat analysis. One of the strengths of the any location is the weather, why people live where they live. In the early founding of the country, people lived near the sea because ships were the prime mode of transportation, rivers were found and where there are rapids, hydro power can be harnessed for inexpensive electricity. Now companies can be anywhere but capitalizing on the weather seems to be a good idea for the future.

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

For every government industrial policy is a complex situation because every government wants its people to be productive, its people reasonably well paid and its people to have good lives. In the world of industrial policy, there are building blocks and at the basic level every government wants those building blocks in its country. The issue is somebody needs to buy the output of the industrial companies. When government gets involved in any industry, invariably it will have different goals than outside investors. Does the company layoff people? how well are people paid? what is the reason for owning the shares? and the list goes on and on. For investors are more interested in their return.

In an article written by Michael Liedtke and Elaine Kurtenbach of the Associated Press, President Trump is changing US industrial policy. The government will take a 10% equity stake in Intel, the shares would be non-voting. The government has taken equity stakes in the past, usually preferred shares and some of the companies recovered after a few years the government made profits when they sold.

Intel the company was once a industry leader and many laptops have a little sign Itel inside, but the personal computer boom changed to mobile and now has changed to AI and Intel missed the mobile and has been slow to the party for AI. The computer chips that Intel is very useful for lower value which many companies used in electronics. The chips are not AI chips.

Softbank Group Corp has made a $2 billion investment in Intel for 2%. Intel’s market value is about $110 billion.

Intel has received money from the CHIPS fund of $2.2 billion of the $7.8 billion that it is pledged. Part of the funds was to built a chips factory in Ohio which has been in the works since 2022.

Linking to dividend paying stocks, while governments and corporations work together and sometimes it is seamless, it is rare for the government to directly take ownership positions in companies. The reason is while they have the same end, how they get there will be the issues. Government has many indirect ways to help corporations including research at universities, offering tax credits or incentives, but generally it is better that they do not take a equity position.

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

As investors you have 2 sides or a ying and yang, you are often a consumer and an investor. Sometimes the two will mesh with each other and you will be delighted as an investor and sometimes the traits that make the stock good from the investor point of view is lousy for the consumer, unless you are one of the exceptions to the normal business practice.

Many years ago working for a bank, some of the benefits were free checking, higher savings rates, lower interest rates to pay and a host of good things. After leaving the bank, all the things consumers said was wrong, it was easier to see, but still the stock was kept and added to.

A book from the consumer side of banking, in particular the Canadian banking is called Fleeced by Andrew Spence, published by Sutherland House, Toronto, Ontario, 2024. In the book, Mr. Spence outlines how the banks charge higher fees than comparing to either US banks or UK banks.

When it is very good to write a check when there is money in it, the NSF fee in Canada is $50 and to avoid it, the bank charges an overdraft fee per month such as $5.00. In Australia the bank fee is $5.00 Why is that important for a Canadian bank with $400 billion in consumer deposits, the fee income will be in the $4 billion range. A UK bank with $400 billion in consumer deposits takes in $2 billion in fees.

Banking’s key statistic is net interest income, the difference between what it pays you for your savings and what it makes on its loans. In Canadian banks, that is 52% of their income, the other 48% is fees, commissions, income from trading stocks, bonds and other financial products.

Canada’s small group of very large banks so thoroughly dominate the market for financial services that it can manipulate prices, stifle innovation. and choke off or buy competitive threats. The gains flow to the banks and their shareholders.

Credit card interest rates is a cash cow because in 1981, the interest rate on Visa and Mastercard was 25%, the bank rate was 21% or a spread of 2.25%. In 2024, the interest rate is 20%, the bank rate is about 7% or a spread of 13%.

There are other examples in the book about how the financial system is not very consumer friendly, but how good are the returns and how consistent are they: In the years of 2022 and 2023, TD and BMO have operations in Canada and the US – in Canada their return on equity for domestic personal and commercial banking was 37% versus 14% in the US.

Linking to dividend paying stocks, this case was used because the Canadian banks are very profitable companies and there are reasons. The reasons are as an investor you should consider owning shares in the companies is the profits are consistent. Will the government or the market change things, highly unlikely which means the patterns should continue into the future. In other sectors analyst discuss subscription or fee income, some industries do it better.

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