Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Light

Every since fire was first used, we needed light to move around. The evolution from fire to artificial light or light bulbs is a long one. From the fire to portable fire or candles. How were candles made? The best time was from beeswax, but they were expensive so most people used tallow from animal fat. The downside was foul odor and thick smoke.

The next evolution came from whales, somehow the spermaceti in the whales skull was a great improvement on tallow, better light, no smoke. President George Washington estimated he spent $15,000 a year in today’s money burning spermaceti candles. The whaling industry which killed 300,000 sperm whales created beautiful seaside towns of Nantucket and Egartown.

The next stage was to use kerosene, when the Rockerfellers went into the oil business there was little demand for oil, but kerosene large market. Eventually the car was produced and light bulk came to being.

If you think about light bulbs the name Thomas Edison comes up, but reality is people were trying to invent the light bulb for 80 years till Edison came up with the final pieces of the puzzle. The reason it took so long was the light bulb has 3 parts: some kind of filament that glows when an electrical current runs through it’ some mechanism to keep the filament from burning out too quickly and a means of supplying electric current to start the reaction in the first place. Why does Edison get much of the credit?

Edison was a master of marketing and PR. He helped the press; he would announce solutions to scare off competitiors; and he did manage to show light bulbs that would last 5 minutes, and in 1882 he did produce a light bulb that was well ahead of his competitors.

Edison found a filament that worked and equally important was the team he had assembled around him. The people were diverse in nationality and professional expertise. Edison did not just invent new technology, he invented an entire system for inventing, to make the teams creative: assembling diverse skills in a work environment that valued experimentation and accepted failure; incentivizing the group with financial rewards that were aligned with the overall success of the organization; and building on ideas that originated elsewhere. He said he was more of a sponge than inventor.

Another aspect to light is taking photographs when it is dark or flash photography. The person who invented it was interested in showing public health problems, but to see the problems people had to see what happens after dark or when the lights go out.

If you have been to Las Vegas, for many years they had no street lights because of the neon signs of the hotels. Thanks to the electricity generated by the Hoover Dam bringing electricity to the desert; and technology from France, an opportunity came forth and although neon signs are in Times Square, Las Vegas skyline is neon signs not buildings.

If you buy 99% of products there is a bar code on it. The bar code is called a Universal Product Code and uses a laser to scan it. The bar code greatly reduced the costs of maintaining a large inventory and thus allowed for stores to get bigger.

Linking to dividend paying stocks, in this book, the author looked at 6 basic ideas and linked them to improvements in how we live. It is a very interesting perspective and needs a great deal of information to connect the dots. If you can do this, you might see trends a little easier and maybe profit from them. The information also shows there are always many alternatives to solve problems, but are they the correct problems to be solved in order to make money? Dividend producing companies have a track record of doing that, but life does change over time.

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Time

Time is an interesting subject because we never gain it once it has gone. For generations, people got up when the sun came up and went to sleep when the sun went down and it was good. For many people that was good, however if you traveled then it was not good, for time was not constant. At present we live in time zones which means everyone living in the time zone sets their clocks to the same number. How the time zones evolved is an interesting story.

Legend has it in 1583 a 19 year old student at the University of Pisa attend prayers at the Cathedral beside the Leaning Tower of Pisa and noticed one of the lamps swaying back and forth. It seemed no matter how large the arc, the lamp appeared to take the same amount of time to swing back and forth. Years later Galileo Galilei, increasingly obsessed with the science of dynamics, the study of how objects move through space, decided to build a pendulum.

It was an idea that needed time to ripen for most people were not worried about what time it was. However if you were on a ship, latitude was relatively easy to figure out, the longitude was a problem. The famous Longitude Prize in England offered $1 million for the winner. (there is an interesting movie about it called Longitude to see how people tried to solve the problem). As society changed to an industrial one, time became more important. Thing about hourly wages, gaining efficiencies with time motion.

Time was a luxury item, until Aaron Dennison mass produced them and over a 160,000 were sold. President Lincoln owed a watch and so did many soldiers in the civil war. Sears was started when Sears and Roebuck launched a mail-order catalog showcasing watch designs.

As pocket watches were being used by more and more people, it came time to standardize time which happened in 1883 when time zones were introduced.

On your smartphone you have a quartz crystal because they are very accurate. To be more accurate atomic clocks were built in the mid 1950’s and this is how we have the most accurate time.

Linking to dividend paying stocks, most of us take time for granted although it does regulate us. If you buy stocks you wait until 9:30 with the New York Stock Exchange opens and trading begins. High frequency trading is based on time and speed; a number of years only a few people could have imagine the trading patterns. Something will evolve in the future, will you see it?

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Clean

If you like most people, today they went to the bathroom flushed the toilet and had a shower. When you had breakfast you likely had some water, whether that is boiled or from the tap and you did not find anything out of the ordinary doing the routine. Go back 100 plus years and world is different. For a long time in China, they believed in bathing everyday, Europeans were lucky to bathe once a month. In some cases, if a European went to a physician he would have said, the pores of the skin being a little dirty fight off infection. When we lived in smaller cities or in the rural areas, you might get away with it. As the population moved to cities, sanitation became a huge issue. In the movie, My Fair Lady the Professor Higgins first step in reforming Eliza is a bath. In London, UK people often died because of a belief diseases were air born; it was not until Dr. John Snow who used a cholera map to show the disease came from the water people were drinking. This lead to sewers, although there have been sewers placed before the pipes drawing clean water in until it was changed they were not very useful.

In Chicago, which is located on flat land, the buildings had to be raised to put the sewers in because all water and sewage systems use gravity to move the liquids. Having proper systems improves public health for all people.

Improving cleaning for cities, brought a market for cleaning in homes. Go to the grocery store and there are multiple cleaning companies, it started with Clorox. Cleaning is worth $80 billion to the economy.

The cleanest places on earth in business world are the manufacturers of computer chips.

Linking to dividend paying stocks, some of the best dividend stocks are related to cleaning. We have evolved to trying to be clean and have a clean environment around yourself which means demand remains constant and profits steady.

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Sound

Part of your day was likely hearing music, probably recorded, have you ever considered when he recorded music? For thousands of years, we as a society could not because we did not how and we did not know how we hear. Two key developments were needed, one from physics, the other from anatomy. From the 1500’s, scientists began to work under the assumption that sound travelled through the air in invisible wave. Edouard-Leon Scott de Martinville made a conceptual leap that sound waves could be pulled out of the air and etched onto a recording medium. He invented the phonautograph. In terms of the playback of the sound, Alexander Graham Bell, although what Bell thought the telephone was going to be used for, people did not use it. Bell envisioned the telephone as a method to share live music; when Tomas Edison invented the phonograph he thought it would be used as a means of sending letters through the postal system. The reverse is how the rest of the world used them. People used to the phonograph to listen to music, the telephone to communicate with friends.

One of the great result of the AT&T monopoly before it was divided, now it is 4 companies was Bell Labs. Why was Bell so good? John Gertner’s book The Idea Factory reveals it was not just the diversity of talent, and the tolerant of failure, and the willingness to make big bets. The justice department in 1956, allowed AT&T to have a monopoly, but any patented invention that had originated in Bell Labs would have to be freely licensed to any American company that found it useful, and all new patents would have to licensed for a modest fee. Meaning all ideas were shared, and AT&T would make profits.

Radio came about because of the invention of the vacuum tube. Radio opened up music in the country, first jazz was very popular because the music was clearer than symphony music. From jazz, there was a short period till rock n roll. With the internet the world is your oyster.

Sound waves travel 4 times faster underwater than they do through the air. This lead to safety for shipping including sonar. Sonar is used to find fish, to find icebergs and submarines ( a wonderful movie is the Hunt for Red October) and the same idea became ultrasound to determine the health and sex of the unborn child.

Linking to dividend paying stocks, it is hard to imagine living without communications today. The smartphone and all its features but equally important as the technology was developed what did we see. The inventors were trying to solve problems, but what did the public or consumers use the products for. As investors, you are balancing great new products and the demand for them and how to make money from them. Never an easy answer looking at many alternatives.

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Cold

Living in the northeast, there is cold weather, but generally it is bearable and over the years we have heard about towing glaciers to Saudi Arabia for water. This story repeats history for in 1834 Frederic Tudor sent ice blocks from the Boston area to the Caribbean. Similar to many families, the Tudor’s had an ice box which kept ice from the ponds and lakes of the area in a box and when the hot summer months arrived, ice was chipped to be added to drinks or cool down a bath during a heat wave.

The idea of sending ice south was a good one, except for there was no market for ice because the locals did not know what to do with it. The residents were not use to the cold, they were used to heat and organized their lives around the heat. Morning and evening work, sleeping or rest during the hottest times of the day. Most of his customers did not understand the usefulness of ice – they needed education. It took a number of years before Mr. Tudor built up the infrastructure – harvesting, insulation (sawdust and double-shelled structures), transport and storage. American ice was going around the world with the biggest customer – India. By 1850 more than 100,000 tons of Boston ice was shipped around the world. By 1860, 2 out of 3 New York homes had daily deliveries of ice.

Most of the trade in natural goods involves material that thrives in high-energy environments. Sugarcane, coffee, tea, cotton were all dependent on the heat of tropical and subtropical climates. You could make a fortune in the 1800’s by taking things that grew in high-energy environments and shipping them to low-energy climates.

Chicago owes its growth to being a transportation hub and ice-powered refrigeration. Pork can be relatively easy preserved, but beef can not so remain a Chicago area delicacy. Cattle was originally moved from the ranches in the plains to markets in New York and the eastern coast by train, but the cattle was both expensive and about half of the cattle would be inedible. There had to be a better way – and ice cooled facilities were invented along with the refrigerator rail car. Then up to 14 million animals were slaughtered in the stockyards of Chicago.

To understand the next breakthrough we need to know how they happen. It is not just a solitary genius coming up with a brilliant invention. Ideas are fundamentally networks of other ideas. We take the tools and metaphors and concepts and scientific understanding of our time and we remix them into something new. If you do not have the right building blocks, then it was not possible. By 1850, a refrigerator was coming into the possible.

Artificial cold took time – most ideas tend to come in clusters, where a handful of geographically diverse investigators independently stumble upon the same discovery. Most discoveries become imaginable at a very specific moment in history after which point multiple people start to imagine them.

For refrigeration, the knowledge of thermodynamics and the basic chemistry of ice, combined with the great fortunes made in the ice trade, made artificial cold ripe for invention.

In terms of food, Clarence Birdseye noticed the key to freezing food was how quickly it was done. We now call in flash freezing and what that does is generate small ice crystals and the food tastes better. A good method to look at the issue is, people used to go to a butcher for beef, the stores carried a very limited selection. After flash freezing is invented, it took some time, but food retailing changes to the the Super Stores that you may have gone to. a

In the household, air conditioning is consider an essential in the warmer climates of the US and we owe Willis Carrier who received his start fixing a problem for a printing company to stop the ink smearing in the humidity. Carrier first worked on industrial business, one may see or remember signs of movie theaters – air conditioning. The air conditioning for homes allowed people to move to the sun belt and live the same lives as they would in the north of the US, without the cold. The increase in people living in the Sun Belt changed how the President became President.

Linking to dividend paying stocks, in the past 100 years lives have changed, hopefully for the better but it is easy to see how lives were lived in the movies. If you think about a movie called To Kill a Mockingbird, there was no air conditioning, which meant life was a little slower. Perhaps it was better, it was different. With each element society changed and companies grew and declined or alternatives were needed. Society will continue to change hopefully for the better, which is why when you invest understand how the company makes money or a profit.

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Glass

Most of us look through glass everyday – windows in the house, car windows, windows in the workplace, but we really do not think about it. The first glass was found in the sands of the Libyan Desert. Grains of silica meted and fused under an intense heat – a piece of that glass was used in jewelry in the tomb of Tutankhamun.

In 1204, the City of Constantinople was sacked and a community of glassmakers from Turkey crossed the sea to Venice. At the time, Venice was the most important port in Europe and the glass was sold around Europe. In Venice, because furnaces are used in making glass and Venice was made of wood, fires resulted. In 1291, the glassmakers were relocated to the island of Murano which created an innovation hub. The small graphic area meant ideas were quick to flow through the glassmakers and Murano glass has been known since as status symbols.

People experimented with glass and in monasteries, monks were translating manuscripts (if you need a movie – Sean Connery – The Name of the Rose) needed to see and had glasses. With the invention of the printing press in the 1440’s, because people were generally not literate they had no need for glasses. Once printing was prevalent, people needed glasses to see and a new industry was formed. (although it took Elton John to make glasses design fashionable).

With glasses, people wanted to magnify the objects they observed and 2 spectacle makers in the Netherlands came up with the first microscope in 1590.

in 1887, glass fibers were discovered eventually the breakthrough would translate to fiber optics which allows the internet to be used by as many people as possible. Why did it take so long to understand and use glass: the furnace. If you are near people who blow glass – the heat has to be over 1,000 degrees. By learning how to generate extreme heat in an controlled environment, we unlocked the molecular potential of silicon dioxide which transformed the way we see the world.

Linking to dividend paying stocks, in the book the unlocking of glass took time but each segment we learned more what we can do with glass. As long as people are curious, we still have more learning to do. As our society discovered what we can do with glass, new industries and avenues for more learning developed, hopefully we still have much to learn.

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

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

The book is about an innovation or cluster of innovations, in one field ends up triggering changes that seem to belong to a different domain together. In Mr. Johnson’s book, he does not discuss the value if the change is for the better, but how did the change come about in the first place? If we can understand innovation, we can make better predictions, if you can make better predictions, you can invest in growth stocks and increase your wealth or try to determine what you should avoid which will save you money.

Linking to dividend paying stocks, we use the past to indicate if the companies can and still earn profits and pay the dividend. It is a very useful thing to do, however every year the competitive environment becomes tougher and you need to know if the companies you put money into are up to it? Growth stocks are often about ideas that could be, dividend ideas are about proven ideas the market has embraced. There are always alternatives being conjured up to gain a piece of the profitable companies, you need to know is how to determine if you should seek alternatives or maintain where your positions for a longer period of time and one of the methods is ask how does your company make money?

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

When we invest, we make choices to invest in some companies and not others. Sometimes we pick companies because they are local , you love their product(s), they are great generators of cash and profits. One of the companies which has been and is a great generator of cash is Altria which sells cigarettes.

Whether you smoke or do not, smoking is still legal and people do it. It is true smoking rates in the US has fallen 4% over the past year, compared to the normal 3% decline. Altria spent almost $13 billion to own a 35% share in Juul Labs the leading e-cigarette maker or vaping.

In an article by David Berman, he examined the bond market because with the bond market, the biggest issue is can the company generate enough cash to pay back the bonds with interest? At the moment the bond market investors are not worried about health concerns and Altria. S&P Global Ratings and Fitch Ratings cut their ratings to BBB from A# after Altari financed its $13 billion with Juul. S&P noted the investment in Juul would not bring an meaningful return to Altria for a couple of years.

Altria remains wildly profitable, with price increases on cigarettes offsetting declining smoking rates. In the second quarter, the company reported a profit over nearly $2 billion up 6.4% from last year.

Altria 10.1% in InBev grew by 46% to $19 billion or 2/3s of the Altria’s debt.

The company distributes 80% of profit to shareholders and now pays 84 cents a shares quarterly up from 80 cents.

Linking to dividend paying stocks, in the past cigarette companies have paid penalties for smoking related diseases to states but those lawsuits are over. The company is profitable and as long as it is legal, pays very good dividends.

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

Often the public gets way ahead of the politicians and business has to make decisions to continue to operate and move on with fewer distractions. Gun violence has increased and one of the solutions to less gun violence is to ensure civilians to not own assault style weapons. In an article by Pat Eaton-Robb of the Associated Press, the manufacturer of the AR-15, Colt Industries for business reasons to stop the production of riles for the civilian market. The company will still produce the rifles for the police and military, where they belong, because the people are trained and generally their mental health is watched more closely.

The Chief Executive of Colt, Dennis Veilleux note the market for modern sporting rifles has experienced significant excess manufacturing capacity or they have a large inventory of guns not selling.

Adam Winkler, a gun policy expert at the University of California , Los Angles School of Law noted FBI data show more than 2.3 million people applied for background checks to purchase guns in August, up from 1.8 million in July. He also said, given the sales and history of Colt being a completely disorganized, dysfunctional company that goes into bankruptcy and can not keep anything going properly, my assumption is that not manufacturing the rifle is a business decision driven by their own business problems.

He also said, in the past when gun manufacturers are viewed to have given into to gun safety advocates, gun owners will boycott them and really hurt their business.

Linking to dividend paying stocks, similar to many other businesses, there are considerations for doing the right thing. In my mind, there is no need for a civilians to have an AR-15 rifle or similar rifles. If you are hunting, for thousands of years, people did not need that kind of fire power; if you are protecting yourself – if you shoot what kind of damage will you do? However, for a company to discontinue something their tradition base of buyers do not like, consequences at gross sales will happen. What is the best alternative?

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