We all know the baby boom generation is getting older and when an individual gets older the body does not heal as fast as when it was younger. To help with healing drugs are used, those prescription drugs can be billion dollar sellers which makes pharma companies potentially attractive as a stock holding.

In an article by Danilo Masoni of Reuters, global health care stocks have not been this cheap in decades, which incites the fund companies to begin to buy, but the shares have not jump, highlighting the uncertainty over drug pricing policies since President Trump returned to the White House.

Global pharma companies’ earnings outlooks is being obscured by concerns over revived most-favored-nation drug pricing rules in the lucrative US market and potential 200% tariffs on pharma imports into the US.

During COVID 19 years, money flowed into pharma stocks, but since then the sector is cheap and unloved.

At 15.9 times forward earnings, health care trades 11% below its long-term average and 20% below global equities, its steepest discount in 16 years.

Stephanie Aliaga, global market strategist at JPMorgan Asset Management in New York, said there is a good reason for the discount, US policy risks.

On the positive side, innovation is accelerating, pipelines are maturing and M&A is showing signs of picking up- yet stock prices are unmoved.

Is this a value trap or buying opportunity?

Historically, health care has traded at a modest premium to world stocks, thanks to its defensive profile and steady earnings.

Eddie Yoon, health care sector leader and portfolio manager at Fidelity in Boston, said Being cheap is not necessarily a reason to buy. You need a catalyst.

Linking to dividend paying stocks, what is the catalyst? sometimes the catalyst is the dividend yield, a profitable stock at a lower price paying a dividend and because the stock price is low, the yield goes up. At some point, the price should go up, but in the meantime getting a good yield is a wonderful thing.

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

When you invest in stocks, part of how the stock will perform is based on expectations. The company offers guidance or what it should do and then reports on how well it did or actuals. If it did better than expected, the market says YEA! and the price tends to go up, if it did not then the price tends to go down as allocation happens – shifting from one stock to another.

In a report from Mattel, the large toymaker which has it headquarters and design staff in the US but essentially makes most of its toys in China. It is a bell weather stock on President Trump’s tariffs. How does the company adjust to tariffs? Do it bring manufacturing to the US? Mattel sells to the giant retailers, what are they doing about tariffs?

Mattel reported weak Barbie sales in North America (President Trump said a girl can have 3 or 4 dolls not 30) and cautious inventory planning by retailers amid global trade uncertainties weighed on demand.

Mattle expects a 1% growth rather than a 2-3% growth. It is still making profits, just less, its prior estimate was $1.66 to $1.72 but changed the estimate to $1.54 to $1.66.

Mattel’s finance chief Paul Ruh said retailers such as Walmart, Target and Amazon were limiting building up inventory going into the key holiday season to minimize exposure to higher tariff rates.

Mattel had fewer new product launches for Barbie and worldwide gross bills for dolls fell 19%, while the infant, toddler and preschool category dropped 25%.

Mattle had net sales of $1.02 billion for the quarter just less than the $1.05 billion which was expected.

Linking to dividend paying stocks, sometimes companies can do everything right from their perspective and still not perform to expectations, but that is why they have plans to do something which they can control. As an investor, you have to determine if what the company’s plans are is something you want to be on the ride with them. Sometimes the answer is yes, sometimes it is no for it depends on the company.

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

In many industries the hardest job of senior management is to raise prices. People know many things about every industry, where the fixed costs are? what variable costs are possible? but sometimes government policies make it easier.

In an article by Peter Eavis of the News York Times News Service, American steelmakers are raising prices, forcing new costs onto domestic manufacturers.

Two big US producers Cleveland-Cliffs and Steel Dynamics reported they have charged more for their products in the 2nd quarter than they did in the 1st quarter.

About 1/5 of the steel sold in the US is imported. Tariffs went from 25% to 50%, which made imported steel more expensive. And as imports have declined, US producers have more power to opportunistically increase their prices, buyers say.

In the 2nd quarter, the average price of Steel Dynamics’ steel was $1,134 a ton, up from $998. Cleveland-Cliffs price went from $980 to $1,015 a ton or an increase of 16%.

Thomas McCartin, a senior economist with the pricing and purchasing service at S&P Global Market Intelligence, stated these are profit-maximizing firms, the domestic mills are going to try to get as much as they can.

According to the American Iron and Steel Institute, the top exporters of steel to the US are Canada, Brazil, South Korea and Mexico.

American-made steel is the most expensive in the world, and some analysts say domestic producers have gained a tight grip on US trade policy that allows them to charge more.

Linking to dividend paying stocks, tariffs increase prices. It tends to be a lagging indicator, but over time tariffs increase prices and companies that seemingly are immune from tariffs will use them to increase prices. Increasing prices over things being relative equal means greater revenues, the equation is simple, the execution is the most watched element by investors. Does the company have the ability to raise prices to increase revenues or will alternatives be found?

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

President Trump has decided that the world the US has dominated for generations will not be dominated anymore. Ever since WW II, because the war did not affect the properties inside the US, the country has played the role of leadership. The Marshall Plan helped rebuild Europe, the outsourcing of jobs built up Southeast Asia and as China grew it drew raw materials from around the world. There was also relative peace in the globe as raw materials flowed from where they were found to countries that used them. In President Trump’s second term he decided that should change which is why he put a tariff on every country. Under Newton’s physics law of for every action there is an equal reaction. If a country pulls back, then another one steps in.

In an article by Somini Sengupta of the New York Times News Service, the auto companies have been global giants for years. There was truth in a statement made by a GM VP – what is good for GM is good for America. Part of the global dominance was auto companies had factories in many countries around the world, but times are changing.

In Brazil, home to 200 million people and the world’s 6th largest car market, the Chinese car companies are turning to Brazil to make cars. Chinese auto companies make and export more cars of all types than any other country in the world. Chinese companies dominate the global manufacture of battery-powered vehicles of the future. They also control the supply chain for virtually everything that goes into those cars.

In Sao Paulo, Great Wall Motors has moved into a factory that used to make Mercedes Benz vehicles. Great Wall specializes in affordable electric vehicles.

The Chinese has set up factories in Hungary, Indonesia, Russia, Thailand and Turkey.

In Brazil, BYD took over a factory that Ford used to manufacture vehicles for over 100 years. The street where the factory is in Camacari, is called Henry Ford Avenue.

Chery, has teamed up with a Brazilian company, Caoa, to produce cars in central Goias state.

Marcia Lima, head of the Brazil automaker association, noted so far, the new Chinese company are mainly assembling cars with components imported from China. That does not advance the Brazilian auto industry.

Linking to dividend paying stocks, President Trump can believe that tariffs are designed to open borders, but someone has to have the correct item at a point where sellers meet buyers. It might be wishful thinking because the competition has walked into an opportunity. If made in your home country is important to your domestic consumers, why does that change when you cross a border? Politics is about many interest groups; business is about the monetary transactions, when you are investing pay attention to the money, the politics sometimes will help, sometimes not so much.

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

After you have made money and the dividends are flowing into your account, you might think about diversifying your portfolio into art. For hundreds of years, people have been collecting art and artists need patrons to exist. For every type of artwork, there is somebody who really likes it and wants to own it. Sometimes figuring out who they are is the tough part to selling art, but there is a market. As prices begin to rise for the artwork, there is somebody who wants to copy the style and sell you their art disguised as the original or there is fraud in artwork.

Only after an artist becomes famous and their artwork is catalogued and carefully maintained can a person buy the art without really knowing it is a fake or not. If you think about the great masters, they often had apprentices, did the master do the work or the apprentice, but it was the master’s vision. After learning, did the apprentice copy the master or develop their own style? who knows.

In an article by Tara Deschamps of The Canadian Press, for one artist Norwal Morriseau there is an app for that.

Mr. Morrisseau was an artist for most of his life but became famous late in life. He lived a varied life with and without a great deal of money which meant that people knew and like the style, but few people knew if the paintings were fake or not. In the past years, many collectors have discovered their paintings were fake as more than 6,000 fake paintings were sold at a cost of $100 million. The fraud is known as the biggest art fraud in world history.

In the case of Mr. Morrisseau, an app called Acrylic Robotics founded by Chloe Ryan. The software runs on AWS or Amazon Web Services and logs every movement, detecting millions of details in one piece, including the strokes, brush pressure, pigment and speed.

If anomalies can be detected, then art experts, historians can dig further.

Apparently most art experts who value art are staying away from Mr. Morrisseau’s art because of the great many fakes.

Linking to dividend paying stocks, in all businesses, fraud is a concern. It is rallying cry to cut fraud from the public service. What is fraud? AI can help and over the next few months and years, we soon will see the auditors used AI to detect fraud in the books.

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

In recent weeks, President Trump went to Pittsburg to announce major AI investments at the Pennsylvania Energy and Innovation Summit at Carnegie Mellon University. Companies are spending over $90 billion in projects such as data centers, energy innovation center. The private sector companies investing include: Amazon, BlackRock, Alphabet, Gecko Robotics, EQT, and PNC Financial. The collaboration between universities, the government and private companies will make Pittsburg a hub.

In an article by Meaghan Tobin of the New York Times News Service, when China is contrasted to the US, it is the government allocating the resources to AI.

China is closing the gap which the US leads, to make technologies that rival the human brain. The Chinese government has spent a decade funneling resources in AI as well as electric vehicles and solar power industries.

Kyle Chan, an adjunct researcher at the RAND Corp, said China is applying state support across the entire AI tech stack, from chips to data centers.

For the past 10 years, Beijing has pushed Chinese companies to build manufacturing capabilities in high-tech industries for which the country previously depended on imports. That approach helped China become maker to a 1/3 of the world’s manufactured goods and a leader in electric vehicles, batteries and solar panels. It also applied to the essential building blocks of advanced AI systems: computing power, skilled engineers and data resources. A Wall Street Journal video on Black Factory – an automobile factory lights were on low because 99% of the work being done was by robots, people were needed to maintain the robots. The auto company was lowering prices because the robots work 24/7.

In the US, the emphasis is on private companies, in China it is the central government. To concentrate talent, the Chinese government financed a series of labs where much of the advanced AI research takes place, often in collaboration with big Chinese tech companies such as Alibaba and ByteDance.

The Chinese government has directed banks and local government to go on a lending spree that fuelled hundreds of startups. Since 2014, the semiconductor fund has spent nearly $100 billion with $8.5 billion to startups. For local government, they have sent up entire neighborhoods that function as startup incubators such as Dream Town in Hangzhou, which is home to Alibaba and DeepSeek and is known as a hot spot for AI talent.

The government covers 10-15% of the costs for startups. When Deep Principle moved to Hangzhou, it received $2.5 million subsidy as well as local officials helped with office space and housing for employees.

There are advantages and disadvantages with the Central government setting directives such as the many are caught off guard with advances in generative AI behind ChatGPT model.

Chinese companies use open-source models as the fastest way to catch up to Silicon Valley which makes it easier for engineers around the world to build on their systems. What will be the world’s standard?

Linking to dividend paying stocks, some of these companies are profitable because what they do is the standard in the world. Everyone else has to do the same thing and as long as the company can continue to offer leadership, they will be the first choice of customers. In technology, things change quickly, but the returns tend to be built over the long-term. It is hard not to start with the largest companies as your partner. Companies often see their competition from around the world, while western governments want to focus on inside their borders because consumers see what is in front of them. There are many competing interests, which makes even if there are flaws in the model, the government is looking in the correct direction.

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

One of the many methods large companies stay large is to buy smaller companies particularly when they have assets which offer profits for generations to come. The larger companies can afford to pay a healthy premium and the owners of the smaller company will typically convert some of their shares into owning a piece of the larger company. It is easier to see the process in the commodities or natural resources sector. In the tech sector, companies are buying talent.

In an article by Michelle Chapman of the Associated Press, in the oil industry, one of the biggest discoveries of oil is off the coast of Guyana. The country will soon be the 4th largest offshore oil producer in the world being ahead of Qatar, the US, Mexico and Norway.

In the world of offshore drilling, because of the expense and risk, companies often partner up and fight for the best blocks. Three companies of Exxon, China’s CNOCC and Hess have squared off in a heated competition for the lucrative oil fields in northern South America,

Chevron was late to the party, decided to buy Hess for $53 billion in October of 2023. With the ruling, Mr. Hess (also owner of the New York Jets football team) joins the board of directors of Chevron.

Exxon sued Chevron at the International Chamber of Commerce in Paris, France which Chevron won. Exxon said they disagree with the ICC panel’s interpretation but respect the arbitration and dispute resolution process.

Linking to dividend paying stocks, in the world of natural resources, all the players know each other, they serve on many industry associations, but they are competitive in the marketplace, particularly with trophy assets. A trophy asset means a license to print money, if the asset is well managed. Often smaller companies find the assets, but it costs a great deal of money to develop the asset and for that the larger companies are needed. When the company you own has a trophy investment, all you have to do is determine if the asset is well managed and will continue to produce profits for the company otherwise it is time to find alternatives.

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

In every country, what is in the national interest is an issue. From an outsider, the answer seems confusing, because the laws do not seem to be applied equally. However, if the desired national interest is successful, then the results could be construed as the ends justifies the means.

In an article by Joyce Lee and Heekyong Yang of Reuters, the South Korean top court cleared Samsung Electronics Chairman Jay Y Lee of accounting fraud and stock manipulation removing a long-running legal risk for the country’s biggest company.

Samsung Electronics is the world’s top memory chip and number two smartphone maker. It is part of the Samsung Group is the most successful family-run conglomerate which helped Korea transform after WW II to a leading global economy.

The court case cleared Mr. Lee for charges related to two Samsung affiliates, Samsung C&T and Cheil Industries, which prosecutors said was designed to cement Mr. Lee’s control of the tech giant. The merger was $8 billion in 2015.

Analysts said the ruling clears a layer of legal uncertainty, which could be a long-term positive for the company.

Samsung’s lawyers said they were sincerely grateful to the court for its decision and added, the merger was legal.

The Korean Enterprise Federation said the ruling removes a major legal burden for Samsung and comes at a time of intensifying global competition in high-tech industries such as AI and semi-conductors.

Linking to dividend paying stocks, every profitable company gets sued and that is why they have legal staff in house and on call. The legal system takes time and sometimes companies go into the grey area. In this case, there was a disagreement over a $8 billion merger because one can easily imagine that given Mr. Lee’s pardon from a former President of the Korea and the prominence of the Lee family in Korea, the case had to be very good, or it would not have gone forward. Many profitable companies that can pay dividends, the relationship between the President and government officials means the case has to be extra airtight to go forward, it is just a fact of life.

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

,

If you have been following the news since President Trump announced Liberation Day or tariffs on every country in the world, the heaviest tariffs were place on China. The US is the world’s largest economy and China is second. They both share values in capitalism, although the internal politics are different and for that reason China is an enemy or a friend worth watching. The US is the biggest consumer of Chinese goods, so tariffs make goods more expensive or should have an effect on inflation in the US.

In an article by James Griffiths of Reuters, the Chinese economy grew 5.2% in the 2nd quarter, a better-than-expected rate.

According to official statistics, GDP growth was down from the 1st quarter of 5.4%. One would have expected GDP to be up in the first quarter as companies stocked up on items before the tariffs were imposed.

China has focused on domestic consumers buying more of the goods being produced for the US but now they are more expensive, there are surpluses. In a statement for China’s statistics bureau said consumption is now the backbone of growth.

In addition to the emphasis on domestic spending, the central government of China was ramped up infrastructure spending, added consumer subsidies, the bank rate or interest rates were cut in an effort to cushion the economy from the effects of tariffs.

China is aiming for a 5% growth, but companies such as Oxford Economics believes that growth will only be 4.7% up from 4.3%.

Linking to dividend paying stocks, while China is the second largest economy and is the manufacturing hub for the US, the US only accounts for 15% of the GDP. The country is diversified which means tariffs hurt, it does not mean the economy goes into a tailspin. If you buy a profitable making company that can pay dividends, you can determine where the bulk of the revenues come from and how they will and could adjust to markets being cut off for a period of time. Most profitable companies are reasonably diversified and can continue making profits, it is just not as big till the company adjusts to the markets they were cut off from.

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