Ever since the internet, many companies have been disrupted from the long standing ways of doing things and as long as does not affect you personally most of it we can live with. Some industries were seen as harder to disrupt and narratives of why they are more stable lead to investments of billions of dollars. One of these groups was the AI use of computer chips to generate AI. The leader was Nvidia chips which have a high margin and Chat GPT which cost at least $100 million. Then something changed.

In an article by Meaghan Tobin, Paul Mozur and Alexandra Stevenson of the New York Times News Service, the change was a Chinese company with an AI app called DeepSeek.

DeepSeek’s origins are in finance, not technology for technology’s sake. Its parent is a Chinese hedge fund called High Flyer. It was using AI to make bets in the Chinese stock market.

In the Chinese stock market, if retail investors are jumping in and out of stocks, the Chinese government will mandate speculation is to be kept at a minimum for the long-term viability of the market. High Flyer decided to align itself better with the Chinese government priorities: advance AI.

High Flyer CEO Lu Zhengzhe said we want to do things with greater value and things that go beyond the investment industry. High Flyer started a startup called DeepSeek.

DeepSeek’s latest model for AI is believed to be nearly as powerful as American rivals but far more efficient. Its success is despite Washington efforts to limit Chinese access to the advanced chips needed for AI.

DeepSeek’s revenue model did not rely on making consumer-facing AI products for revenue, and only this month released its first chatbot, which allows anyone to generate text and photos with simple commands. High Flyer has been subsidizing DeepSeek with profits from AI trading.

The research and development approach allowed DeepSeek to side-step stringent regulations the Chinese government has placed on AI use by the public.

DeepSeek is run by its CEO Liang Wenfeng, an engineer who studied at Zhejiang University at Hangzhou.

Unlike many Chinese companies, which tend to focus on hiring programmers. Mr. Liang has given a reputation for employing people from outside of computing. Poets and humanities majors from top Chinese universities train the model to write classical Chinese poetry and ace questions from the country’s difficult college entrance examination. Most of the staff graduated from top universities in China – they are very smart and very young.

DeepSeek uses 10,000 advanced Nvidia A100 chips.

The DeepSeek model allows developers to build applications using its model and at the moment it was one of the least expensive models to work with. (Think of the Apple ecosystem – Apple is the foundation and developers build apps from the foundation).

Linking to dividend paying stocks, it seems every industry has the ability to be disrupted. You may believe that your SWOT analysis means few threats, but the lesson is for now. Things can change.

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

One of the biggest trends of the world of computing is Artificial Intelligence or AI and one of the keys to AI is faster and faster processing computer chips. To be faster and faster takes a great deal of electrical power. Companies that are building data centers examined the country to find out where there is surplus power generation and locate data centres near those sites. This is a good thing for both the company and the company producing the electricity.

In an article by Marc Levy of the Associated Press, what is good for the company and the company producing the power may not be good for the rest of the users. The story is if you live in a home, you turn on a light, the electricity comes from the grid which is a mixture of wires to your home, which come from the wires from the transmission towers which connects to the wires from the plant which makes the electricity. The deals between the power plant and data center directly avoids the potentially longer and more expensive process of hooking into electrical grid that serves everyone else.

In the article, the example is Amazon Web Service or AWS has signed a deal with Talen Energy which owns the Susquehanna nuclear power plant in eastern Pennsylvania. There are advantages to both companies.

2 eclectic utility owners – Chicago based Exelon Corp and Columbus based American Electric Power says the deal would allow AWS to avoid a $140 million a year for grid payments it would otherwise owe. Or if AWS does not pay, someone else has to pay for the maintenance of the grid.

The Federal Energy Regulatory Commission or FERC is the agency which must make the decision.

Linking to dividend paying stocks, for a long-time investor-owned utility companies have been a wonderful investment. They operate a monopoly like operation with the consent of the government and the regulator typically allows rates to increase every year. As long as the economic environment for the area is reasonably stable, the utility should be able to produce profits and implement capital spending plans that stay on budget which allows for stable growth and consistent profits including dividend payments. However, with every industry that can be changes and regulations can change.

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

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If you read a newspaper either online or turning the pages, invariably stories about the media will be in the newspaper. Similar to all organizations, there is a bias towards one sector or another, the news is bias towards the media business – it is their jobs. This is the reason it is good to read the magazines that are focused on your industry or the industry you work in.

When CNN started it was the age of regional broadcasting and CNN was part of Turner Communications which launched super stations on cable TV. Then the broadcasting world became easier to do and today we have podcasts, that allow people to do their own thing. It is good for the consumer, but how does a broadcaster adapt to the changing way people consume media news?

In an article by Benjamin Mullin of the New York Times News Service, Mark Thompson, CNN’s CEO says CNN must abide by the words of Ted Turner – give people news when and where they want it. Mr. Thompson says if we do not follow the audiences to the new platforms with real conviction and scale, our future prospects will not be good.

Mr. Thompson was previously the CEO at the New York Times and director general at the BBC, and for the past year and half. At one time most households in the US had cable TV, but changes have many people no longer relying on cable TV. They do many things including receiving news on the smartphone and streaming services. The solution for CNN is do the same thing.

CNN is expanding the number of data scientists and product engineers and will release a new subscription product later this year. The $70 million venture will be funded by parent company Warner Bros Discovery.

One of the priorities has been vertical videos which can be easily viewed on smartphones. CNN plans to release 50 to 100 videos a day. One of the keys to releasing videos is fact checking the information, and ensure it is up to legal standards. CNN has a new unit called CNN Fact Check that works closely with editors and producers.

Linking to dividend paying stocks, most people consume the news, and it is important as investors to read good information because you may make decisions on the information. Ideally many of your investments you can take your time with because the critical information includes are they profitable? and can they pay your dividend? If the answer is yes, then you can wait till the next earnings season before making decisions. Consume the news and to verify opinions, but make financial decisions based on facts.

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

In dealing with inflation, President Trump said the US will drill baby drill, and somehow inflation would drop because of lower energy prices. It might work in a different era, but it is not likely to happen. There are a number of reasons including: unlike the era around Rockefeller, drilling for oil is very expensive. The oil world is dominated by large multinational companies including Chevron which recently signed a $50 billion deal with Kazakhstan; Exxon has monster oil field in Guyana; and as well in the US, the production level reached a new high in 2024 and the list goes on.

In an article by Shelia Dang and Valerie Volcovici of Reuters, US oil and gas companies are unlikely to expand development in Alaska and the Arctic.

US oil production is already at record levels owing largely to increase production in Texas and New Mexico and companies have limited spending on new projects to focus on returning cash to shareholders in either/or buyback of stock or dividends.

Analysts say drillers may not be in a hurry to take advantage of drilling in Alaska.

The first risk is since many of the areas which are opened by President Trump have been closed for years, it would take a lot of time and effort to get to a position to drill. The risk is the next administration may stop the drilling. According to the American Petroleum Institue, drilling in Alaska is a high-risk venture involving decades of work and billions of dollars in investments. (once the oil is discovered in commercial quantities, it needs a pipeline to transport to the coastal holding tanks to ship the oil to the Houston area refineries.

Energy consultancy Rystad said Mr. Trump mantra of drill baby drill, overestimates the industry’s willingness to prioritize growth over generating shareholder returns.

Linking to dividend paying stocks, some of the major oil companies have been paying dividends for generations and with the thought of peak oil coming, it will be hard to convince shareholders growth is better than shareholder returns. At Exxon, the CEO discusses the disciplined approach they have to managing their capital spending and expected returns for the money. It is hard to imagine they would change course to drill more.

One other comment is when Trump says drill baby drill, it generally only applies to small and medium sized companies. The large companies already have their capital budgets and expectations of returns. If one thinks about penny stock promoters, the President sounds like them.

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

When President Trump was running for President, one of the many things he said was he wanted to reduce prices. People liked that, although he did not talk about raising individual incomes, but the price of things. In reality, prices are determined by a wide variety of factors, including what the happens at the White House.

In an article by Jessica Dinapoli and Ananya Mariam Rajesh of Reuters, Proctor & Gamble or P&G will again look at raising prices on its household basics such as Tide detergent, if the US imposes new tariffs.

P&G CFO Andre Schulten said, we will deal with what the administration does, first they will try to offset tariffs with cutting costs. What we cannot offset with productivity, it might result in incremental price increases.

P&G is a powerhouse in consumer products and buys inputs such chemicals, razor blades and small electronics from around the world and manufactures the final product closer to consumers in local factories.

P&G has increased prices over several years as it faced escalating costs of fuel and labor.

One of its many products is Gillette, over the past 4 years P&G has overhauled its razor blade supply chain, a move that could cushion its margins under new tariffs.

In 2024, P&G locked its pricing in for Chinese chemical supply for its sunscreens.

P&G also has formulation flexibility, meaning it can adjust the ingredients in is products if they become too expensive or unavailable owing to tariffs.

After COVID hit the world, P&G invested $6 billion in US manufacturing in the past 6 years.

Linking to dividend paying stocks, P&G is a dividend favorite because it has close to 20 brands that generate well over $1 billion. If you look in your house, you will likely see some P&G brands. Those kind of products and marketing abilities ensures P&G continues to generate profits and pay dividends. When you examine the companies you earn, have they adjusted their supply systems to ensure.

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

As an investor, you are interested in results, did the company make a profit? can it pay a dividend? and if can and does, the company is worth looking at, keeping your holding and maybe investing more money into. After the results are in, there are always other issues in how the company functions, maintains and keeps workers and will continue to make money.

In an article by Emma Goldberg of the New York Times News Service, 5 years the world reacted to COVID by shutting down and working remotely. Is it time to change to in house or hybrid or something in-between.

President Trump wants federal workers to be in the office and not work remotely. CEOs of Amazon, JPMorgan Chase and AT&T have told their employees they want them in the office 5 days a week.

Amazon moved from 3 days required since May 2023 to 5 days starting Jan 2 or as soon as space is available. CEO Andy Jassy said the office would be better allow workers to invent, collaborate and be connected to one another and the culture of Amazon.

JPMorgan Chase believes that in person would support better mentorship and brainstorming. JPMorgan will have 5 days starting March 1.

Nick Bloom an economist at Stanford University, believes sometimes a back to the office push is a way to reduce head count, because some will decide not to come back. Data from a Stanford project tracking work from home rates show that more than 1/4 of paid full days in the US are remotely working. About 3/4’s of Americans whose jobs can be done remotely continue to work from home some of the time. according to Pew Research. The main reason is the flexibility that remote working allows.

Some companies have no plans to change remote work including investment firm TIAA.

Other companies such as Yelp believe being remote helps them attract and retain employees and that is the way they are going to continue.

Linking to dividend paying stocks, while everyone can have an opinion of what works best, it is the results that investors are looking for. Ideally, you want the company you invest in to be recognized as a good company to work for because it cuts costs on both recruiting and retaining people. If the company is a good place to work for, the company can focus on making money and that is a good thing.

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

If you ever watched sporting events on TV or have participated in them, when the team wins the championship, bottles of champagne are opened and sprayed around the around. Champagne has an image and the celebration of winning goes with the image of champagne. In the movies, champagne is often used seen in weddings and opening of major marketing campaigns, champagne often goods with celebration. Think of New Year’s events and the popping of the champagne bottle as an image.

In an article from Reuters, the key markets of champagne are the US and France. It turns out French champagne shipments fell 10% as economic and political uncertainties hit consumers appetite for the sparkling wine.

Full shipments were down 9.2% from 2023 at 271.4 million bottles. Maxime Toubart, president of the Syndicat General des Vignerons and co-president of the Comite Champagne, said Champagne is a real barometer of the state of mind of consumers.

The French market made up of 118.2 million bottles, down 7.2% compared to 2023.

David Chatillon, co-president of the Champagne Committee said, we must prepare for the future, maintain our environmental standards, conquer new markets and new consumers.

Linking to dividend paying stocks, in every commodity field, the supply and demand graphs are one of the most important elements to the profitability. When prices rise, more fields produce the crop, when prices fall, the fields produce something else. There is always a demand, but at what price? and what margins? In your life did you drink champagne when you were celebrating? in not, it shows how trying to conquer new markets and consumers is a hard job to do, but it can work and for champagne producers how do you celebrate?

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

In the old days, living in the northeast meant at times thinking and sometimes going south for the warmer weather. It seems this winter, to get the warmer weather, you needed to go further south than the southern states. If you did, you would come across countries that look and do similar things to what you are doing are trying to do. In countries outside the US, there are many families trying to earn a living, grow their savings and have a reasonable safe experience. After you notice that, then you ask what companies are the people dealing with? and are there any opportunities?

In an article by Elisa Marinuzzi and Brad Haynes of Reuters, the fintech that created Latin America’s most valuable lender is called Nubank which is owned by Nu Holdings Ltd. The founder and CEO David Velez is considering expansion into the UK.

The company was started a decade ago in San Paulo, Brazil and has grown past 100 million customers in Brazil, Mexico and Columbia, making it one of the world’s largest digital challenger banks.

Under President Trump’s administration, Mr. Velez said it has signaled a likely embrace of regulation for digital services which should create a more favorable environment for Nubank to consider entering that market.

Nubank is headquartered in the Cayman Islands has 40 people working for it in Berlin, Germany. Nubank recently made a $150 million investment in a Singapore based digital bank Tyme Group which has 15 million customers in South Africa and the Philippines.

Linking to dividend paying stocks, if you examine your portfolio, you will likely have a bias toward the country you live in. There are many good reasons, you can easily follow them, there is a market for them, some of them will have exposure to other countries. It is important to remember outside the US there are companies doing the same thing companies in the US do. In this example, if you happen to go south to warmer climates, one of the things you can do is examine who the companies are that people are dealing with? When you get back, you can do your homework to see if you could invest in them. There are always multiple opportunities, sometimes it is better to have a bias toward your area and country, sometimes it is good to stretch your horizons.

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

In the world of investing, the number one rule is try not to lose money. Most investors are focused on the upside, because your wealth will increase if you are close to being correct, just a matter of how much of an increase. With the emphasis on the upside, every company no matter how big or small is focused on showing they are growing, unless there is a recession and why they would be one of the few companies making tremendous profits. After a few years in business, companies tend have assets – land, bonds, etc. that have gone up in value and to ensure reasonable stable earning they can sell some assets to ensure they meet the expectations of the street. But what happens when a company stretches the true of accounting or uses accounting tricks to show a profit when in reality they are losing money. Fortunately, for investors there are some possible solutions.

In an article from Reuters, one of the solutions since 2017 is a short seller firm called Hindenburg Research. Ideally under AI, the process will get easier, but there are companies such as Hindenburg that are skeptical of every earnings report. Some sound great, but they are built on a house of cards and can come tumbling down. However, it takes a great deal of research, then the correct conditions before everyone sees what the Research team sees.

Hindenburg Research went through a number of companies and did not believe the story being told, some were outright lies. Then the company began to short the shares of the company, it involves borrowing stock to sell it and hopefully buying the stock back at a lower price and pocketing the difference. The risk is if the price rises, the seller can be exposed to potentially unlimited losses. To short means the cost of borrowed money, plus margin, plus needing the stock to fall drastically to make money.

Over the years, Hindenburg Research shook some empires that we felt needed shaking up and nearly 100 people have been charged by regulators, said Nathan Anderson, President of Hindenburg Research.

Once reports have been written, regulators examine them, and there is time delay before verification of either fraud, accounting issues, or mismanagement.

After the short seller’s report is issued, senior management of the company will accuse the short seller of having a vested invested, use the Public Relations to explain what a sound company it runs, and the list goes on. To be a short seller, one needs a thick skin.

Linking to dividend paying stocks, ideally because a number of analysts follow the company and over the years they should understand the company as it meets expectations, no short seller should be reported on your investment. We all know companies shares go up or down or fluctuate but over the long term, many will rise in value. The issue for the larger company is that there should be no reason for fraud in the accounting books, if there is quickly find alternatives because there will be a time delay before the stock will tend to go up.

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