In every profession, there is a search for patterns and the patterns can tell the expert what has happened. The easiest way to consider this statement is to think about paintings. In some Reels or Facebook video clips from the National Gallery in London, UK are videos to help people look at paintings and gain greater enjoyment from the art which hangs in their galleries. As you look at art differently, you may come more often to the art gallery. In journalism, there are the 5 W – Who? Wait? When? Where? and Why? and if you are curious to ask, you will be rewarded with a many destinations. No matter what industry or event, there will be patterns or references which helps you determine the origin or source material.

In a book called The Lazarus Heist by Geoff White, published by Penguin Random House, London UK, 2022. The Lazarus reference is to the evolution of cybersecurity crimes and links to North Korea.

In the age of the internet, eventually most of the world’s institutions and largest companies are connected into the internet because of the tremendous benefits it brings. The downside is everything that can be used for good of the company and mankind can be used to the opposite of good. Sometimes the people are on the other side are crooks, sometimes they are paid by someone wealthy enough to pay them to steal from others and there are many permutations along the way.

In the book, the writer Mr. White explains how cybersecurity works and equally how those that are trying to protect people try to see which patterns exist and how seemingly isolated events are connected. When the US government says another government is at fault, it is based on the patterns of the programs and where they send the money if they are successful in stealing.

In the US there are multiple divisions in the government that focus on cybersecurity and they are typically embedded in National Security, Treasury and the Secret Service, whose job is more than to protect the President. The role of government is technically for everyone, which implies a certain openness to information. The people who wish to steal money, need access to the openness to move towards the people that can pay money to have their systems running normally. It is a cat and mouse situation that really never changes.

Linking to dividend paying stocks, reading a book such as The Lazarus Heist explains why cybersecurity budgets are here to stay and the firms that offer protection are similar to insurance payments. Everyone pays for insurance in the hopes of never using it, but it is there if you need it. You will have to do your homework because not every company is the best in the breed for every industry, but having one in your portfolio is a good thing.

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

In our daily lives we have choices to spend our money and one way is to walk through a supermarket. On the shelves will be thousands of products and you will have a choice to buy particular items. There are industries designed to reinforce your decision to buy – whether that is marketing and advertising. You may make a decision based on price or brand or likely a combination of many factors. One of the factors which could influence the decision is who owns what products? and are they investable?

In an article by Anirban Sen, Savyata Mishra, Jessica Dinapoli and Abigail Summerville of Reuters, family owned candy giant Mars Inc is buying Kellanova Co for about $36 billion. Mars has brands such as Mars, M&Ms and Snickers while Kellavova has brands such as Pringles and Pop-Tarts. Kellanova was formed when Kellogg’s divided the cereal brands into Kellogg’s and the rest into Kellanova in 2023. The offered is for $83.50 a share a 33% premium from the price on August 2.

Mars has a 4.54% of the US snacking market, while Kellanova has a 3.9% share, the market leader is PepsiCo with a 18.8% share. The last acquisition of Mars was Wrigley in 2008.

It is expected because there are few overlaps for the antitrust regulators not to agree to the merger, once the deal should be completed in mid 2025. Kellanova will become a part of Mars Snacking led by global President Andrew Clarke, based in Chicago. The present CEO of Kellanova Steve Cahillane announced he would be leaving the company. Mr. Cahillane previously worked at Coca-Cola.

In the pandemic, snack food companies led by Pepsi were able to increase prices, retain market share and increase profits, but this helped inflation go up. Mars CEO Poul Weihrauch said he aims to hold prices steady and not pass on costs from the deal to consumers. Mr. Weihaunch said we are a big and strong company.

Analysts say the deal is a bet that people will continue to buy branded products over cheaper alternatives or buying private label goods. (the brand of your local supermarket).

Linking to dividend paying stocks, as you move through your daily life you can see companies that are potential investments. Many of the companies are not sexy but very dependable in revenues and profits and you can relatively easy monitor your investments. If you are a buyer, are others? do you like the product or service? do you get good value? if the answer is yes, then you can do your homework whether to invest or not in the company. If the company is profitable, then it is easier decision to make and it is easier to decide to hold the shares or seek alternatives.

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

If you think about the California gold rush in 1848, the state of California was sparsely populated as the bulk of the population of the US lived on the east coast. Trains tracks had not been laid across the US and people had to travel on horse or oxen drawn carts or take a ship. If you took a ship from New York it had to go around the tip of South America and come north to California. It was a long journey and anyone who has been on a long journey asks is there a short cut? It turns out Central America offered a short cut and eventually the country of Panama was chosen.

The French had tried to build a canal, but there were many obstacles and many of their people died of sickness. The US overtook the process and completed the canal and ships had a short cut. At the time, the US took ownership of the Canal Zone and when they did, they did not ask about whose land it was or being used for, the land was going to be a canal, and the canal was built.

In an article by Peter Goodman of the New York Times News Service, the canal has a problem – all the water in the canal is fresh water but there was been a long standing drought in Panama. It used to be 36-38 ships a day could pass, but that has fallen to 22 ships a day. Those totals meant over a year 13,000 ships most them load with containers went through, the totals have fallen to 10,000.

Given the number of containers, there are many ideas of what to do? Build a railway to off load some of the containers on one side and put them back on the other side? Gain access to more fresh water?

Vasquez Morales is the administrator of the Panama Canal which is both the economic heart of the region and a central artery for global trade. More than half of the containers moving from Asia to the East Coast ports passes through the Panama Canal.

The Canal is 80 kilometers and typically takes 12 hours to go through. The canal is a series of locks which function as ladders to Lake Gatun and then down again. In terms of water usage, a single ship needs about 50 million gallons of water. The waters of Lake Gatun is the source of more than half of Panama’s drinking water for more than 4.4 million people.

This year there was rain and the fresh water rose in the Canal making Mr. Morales happy as he likes it when there is a rainy day.

Lower water levels make the Lake more salty, which is something to avoid. There is a solution to build a dam on the Rio Indio. At the time of building the canal, governmental mindset was this was an economic solution to our problems and people in the area have to adjust. Now days, it is important to talk to the people who would be affected by the dam as lands would be flooded. Government will decide what is more important and what compensation is offered.

Linking to dividend paying stocks, most of us have grown up with the idea of economic progress and those of us who benefited still believe that economic progress is a good thing. As years go by we can ask was building particular infrastructure a good thing? sometimes the answer was probably no, but it was in the name of economic progress. As times evolve the number of stakeholders change and compensation levels change, if the company you invest in has evolved, that is a good thing. There is no perfect answer for economic progress but one hopes benefits are seen by the majority than the few. Sometimes owning shares in profitable companies allow for seeing the options for all.

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

On the stock market there are lots of moving parts and cycles in the economy, however one thing is certain when former highflyer shares are down, at some point various hedge funds will take positions. The hedge funds will examine the company and if it has good solid bones to build from and underlying value that under the correct positions be unleashed, then that is even better. For other companies, if they are reasonably consistent with their earnings, then they have more freedom to execute their strategic plans. One of those stocks which was a highflyer is Starbucks.

In an article by Svea Herbst-Bayliss, Granth Vanaik and Waylon Cunningham of Reuters, the Board of Directors announced Brian Niccol, the CEO of Chipotle Mexican Grill Inc is taking on the job of CEO of Starbucks. The announcement sent the shares up 20%.

The backstory is in March of 2023, Laxman Narasimhan took over as CEO to engineer a reinvention, but the stock did not respond under his leadership as it went down 25%. As CEO Mr. Narasimhan was under pressure from Elliot Investment Management which owns a $2 billion stake to do things to increase the price of the stock. Another hedge fund with a large holding is Trian Fund Management which has many discussions with Disney.

Starbucks has faced increased competition and slower sales in its 2 biggest markets – China and the US. It was not helped with the working from home as many of its shops were located in or near office buildings.

Over at Chipotle, under Mr. Niccol’s leadership sales have grown every year and the stock has more than tripled. According to Thomas Hayes, Chair of Great Hill Capital, Mr. Niccol is a fixer and a doer and an executor. Mr. Niccol begins work at Starbucks on September 9.

Linking to dividend paying stocks, as long as the company is profitable, investors worry less who is the CEO, but once it loses money then the spotlight is on the executive team. Is it the correct one? how will they get back to profitability? If you own shares in a profitable company, all you need to worry is about the strategic plan and its execution, are they doing it well? There is always a worry, just some are easier to handle than others.

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

If you ever watched Star Trek or know something about it, you will know the main character was Captain Kirk and the other leading character was Spock. The character played by Leonard Nimoy was the science officer and first officer and came from the planet Vulcan. Did you know for many years there was a planet Vulcan?

There is a book called The Hunt for Vulcan written by Thomas Levenson published by Random House, NY, 2015.

Have you ever looked at the sky and wondered how it worked? Perhaps you just looked at cloud formations to see pictures in the sky and were content with that. There are people who wondered and did the next step to try to figure out how things worked. One of the key people was Aristotle from Greece and because he was the first to teach or write it down, all the planets are related to the Greek Gods. In Aristotle’s day, the explanation for the how and the why of any phenomenon related to the planets which people could see was planetary motion: the planets riding on rotating spheres. If you jump to Sir Issac Newton’s time, he came up with a better explanation – gravity. You may have heard of the story of an Apple falling on Newton’s head and he called in gravity. This law could be applied equally to everything in the universe and math and physics developed an explanation.

In the 1850’s Urban Jean Joseph Le Verrier discovered the planet Neptune. His rational for Neptune was Nepture was God of the sea and Jupiter’s brother. Saturn was both Jupiter and Neptune’s brother and Uranus was Saturn’s father. Le Verrier was promoted to head of the Paris Observatory in 1854. One of his tasks was to figure out why the planet Mercury did not confirm to all the other planets direct path around the sun. Mercury deviated a little bit called the perihelion shift. There must be a logical, sound reason and many including Le Verrier thought it was due to a planet or comets interfering with the gravity forces to push Mercury off.

People examined the night sky, most are passionate amateurs, but the professionals vertify. It was the case that an passionate viewer Dr. Lescarbault’s saw something and passed the information onto Le Verrier who confirmed the findings and a new planet Venus’ husband. the lord of the forge or Vulcan was named.

Dr. Lescarbault saw the planet, others said they did, but many could not. However the sky is big and complex, and the best opportunity to verify was during a solar eclipses. Even Thomas Edison was involved in looking at the Eclipse and hoping the clouds did not block their view. No shows are hardly alien to science. Theories predict. Ever since Newton’s ideas evolved to subjecting nature to mathematics, this has come to mean that particular solutions to systems of equations can be interpreted as physical phenomena. More theories arise and the math tries to evolve and many times it does.

A new visionary arrived in the 1905 when Albert Einstein produced 4 new works on theoretical physics including what we now know as quantum mechanics and the theory of relativity. He showed light was not straight, but it bent, if light bends so does gravity. In addition, gravity bends time.

Einstein worked with various math professors to understand the variation of Mercury’s orbit and the planet Vulcan disappeared from the maps in 1915 only to arise in connection to a fictional character on a TV show.

Linking to dividend paying stocks, in investing there are multiple theories on what is the best strategy and if you make money looking backwards, those ones worked. The magic of Wall Street is the only perfect information is past information or history and does history repeat itself. There are definite cycles in the market, but can you capture the top to sell and the bottom to buy? One strategy is to invest most of your money in profitable companies which pay a dividend and although the stocks will go up and down, the dividends can pay you while you wait for the top. In every cycle, at some point profitable stocks will trade at higher multiples than non-profitable stocks and most of the stocks on the exchange are non-profitable ones. However sometimes the percentage of growth is higher, but often with high flyers, they descend back to where they started. Learning never goes out of fashion.

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

Hopefully over the summer, you watch or caught clips of the many athletes at the Olympics. Some of the settings were amazing and highlighted the best of Paris and France. Ideally you were exposed to many different athletic competitions, even though you likely had your favorites and maybe someone who you were cheering for won a gold medal or a medal or a personal best. The competition is one aspect of the Olympics. There are 2 other aspects – city building or spending on infrastructure and product placement or advertising.

In an article by Shelia Dang and Mimosa Spencer of Reuters, part of the cost to hold the Olympics is paid by sponsors and they have exclusive rights to marketing their products and services. In Paris, a new level was brought forth and expect the 2028 Olympics in LA to surpass it.

Most of the people who sat in the stands had a cellphone and the Paris Olympics made the most of it. Winning athletes in Paris received their medals on Louis Vuitton trays before being handed a Samsung flip phone to take a victory selfie. None of that happened by chance.

18 months ago, Samsung began talks with the IOC or International Olympic Committee to plot the product placement drive. The boundary-pushing of wares by high-profile sponsors LVMH and Samsung is illustrative of how sponsors are seeking new commercial opportunities from an event that has strict rules around advertising inside competition venues.

Samsung said the strategy was driving awareness of the new Galaxy Z Flip6 globally. Samsung has not provided details on sales.

At LVMH, online searches grew 43% in the US during the first week of the games according to digital analysis provider Captify. LVMH owns a number of brands including Dior, Louis Vuitton.

Organizers of the Olympics in LA will be embracing the trend of Paris and more as LA is head of entertainment in the US. The games will cost $6.9 billion which will privately funded through a combination of sponsorship, ticket revenue, broadcast and merchandise revenues. The sponsorship total is $2 billion and LA officials say they are at about $1 billion.

Henry Poole, VP of marketing solutions at Excel Sports Management says LA’s reputation as a city that oozes celebrity glamour, wealth and ostentation was a tantalizing prospect for sponsorships.

Linking to dividend paying stocks, most events have sponsorships and if you like the event and the sponsorship you may be glad the companies gave money. As an investor you want tangible feedback that sponsorships actually help sales which helps makes profits to pay dividends.

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

If you are a particular generation one of the more important aspects of growing up was the car or vehicle. The internal combustion engine was invented in Detroit and Henry Ford applied the assembly line aspect to the making of The Model T and soon Detroit was the center of automobile production. As the years went by and particularly the interstate highway building and suburban living, many communities had auto plants nearby or in their communities, these plants provided good paying jobs and many people benefited from the auto industry. There was a famous quote by a GM executive as GM goes so does the US or something similar and in reality that was correct. For those of us outside the auto industry, many of us thought it would continue.

In an article by Keith Bradsher of the New York Times News Service, the idea that no matter what changes the auto industry, it could adapt was born that innovation was done in the US – decades ago, a university lab in Texas, researchers discovered how to make batteries with minerals that were abundant and inexpensive. That knowledge was shown to the world, but the US did not take advantage. Companies in China are now building vast numbers of batteries that are inexpensive and reliable, producing most of the world’s electric cars and many other clean energy systems.

Batteries are one of a long list of how China is catching up or passing the US in its technological and manufacturing sophistication. The list includes pharmaceuticals to drones to high efficiency solar panels.

At the universities in China, a majority of undergraduates major in STEM or math, science, engineering or agriculture according to the Ministry of Education. In comparison, the US data shows only 1/5 of American undergraduates and half of doctoral studies are in these categories.

According to the Australian Strategic Policy Institute 65.5% of widely cited technical papers on battery technology come from researchers in China, compared with 12% from the US.

Two of the world’s largest makers of electric-car batteries are CATL and BYD both headquarter in China. Not surprisingly, China has close to 50 graduate programs that focus on either battery chemistry or battery metallurgy. By contrast the US has only a handful of professors working on batteries. One of those universities is Swarthmore College which only has a limited number of spots to do battery research.

In Central South University in Changsha, it has 60,000 students on campus. The chemistry department is a 6-story building with many labs and classrooms. Peng Wenjie, a professor has set up a battery research company that employs 100 recent doctoral and masters program graduates and over 200 assistants.

Manufacturing makes up 28% of China’s economy compared with 11% to the US. One of the reasons is according to Robin Zeng, chair and founder of CATL, building and equipping an electric-car battery factory in the US costs 6 times more than in China and the work is 3-times longer.

In a recent story about electric car vehicles and Thailand, one of the electric car companies set up a plant in 78 days and had 40 showrooms to sell the cars. Could they do it the US?

All is not lost, the US does lead China in overall research spending in terms of dollars spent and in terms of the share of the country’s economy. R & D is 3.4% in the US compared to China’s 2.6%.

Linking to dividend paying stocks, while 2/3s of the economy involves spending on consumer goods, those goods need to be designed, renewed every year. There are always break throughs, check the latest advertisements which highlight the R & D developments, however the US used to lead in all areas of the economy. Part of spending vast amounts of government dollars on post-secondary education was its links to R & D, is that changing?

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

In all industry there are cycles tied to the quarter or quarters where the revenues tend to be higher for good reasons. The quarters tend to be related to both the school year and weather because it makes a great deal of sense, in the past the quarters were related to agriculture cycle. Given the economies changed, agriculture is less important to the economy, but we all look forward to fresh farm produce at the supermarket. In the classic case, retailers do better in the fall because of the back to school and holiday season. If you were in the retail industry, you need to think months in advance to have the promotions ready for the peak seasons.

In an article by Siddharth Cavale and Lisa Baertlein of Reuters, retailers look at the macro aspect of logistics. The retail industry needs labor peace at the ports and railroads, and they are reasonably happy, as they can spend greater time on the shop or website.

For the all the political slogans of Make America Great Again, most retailers are depended on imports from around the world. Container imports and freight rates surged in July, signaling an earlier than usual peak season for an ocean shipping industry that handles about 80% of global trade.

Jonathon Gold, the National Retail Federation (NRF) VP for supply chain and customs policy, said customers are shopping earlier each year and retailers do not want to be caught back-footed.

Part of the reason is a potential US port strike, which a vote will be held on October 1st. The seaports across the US from Maine to Texas are affected at the negotiations are held between the International Longshoremen’s Association and the US Maritime Alliance.

In the July US container imports registered the 3rd-highest monthly volume on record with 2.6 million 20-foot equivalent units (TEUs), UP 16.8% from a year earlier, in part due to record imports from China, according to supply chain software provider Descartes Systems Group.

The NRF is chair by the CEO of Walmart and includes CEOs of Target, Macy’s and Saks on its executive committee, said it expects a strong August for imports. Walmart is the nation’s largest container shipping importer.

In every market there is a spot rate to cue to go quicker and in the container the world, if there is a threat for a strike on the East Coast, the prices to from China to the west coast rose. The rate went up 144% between April and July but fell back 17% in July. Depending on the talks will depend on prices falling for shipping containers with things for consumers to buy.

Linking to dividend paying stocks, all companies hope for normal conditions to be present and for the average consumer they are. When normal conditions are present, it is entirely possible to make good margins which translates into profits which allows to pay dividends. Built into the margins is the possibility of higher costs when alternatives have to made. Often alternatives are linked to logistics and there are multiple methods to find alternatives, hopefully larger companies have contingency plans built in. For your investments, how do companies adjust to contingencies?

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

In every industry there is a wealth of information that is readily accessible to make decisions. We all try to simply the basic decision, but it should be based on a wealth of information. It is up to the decision maker to decide what information is more important and what information is more subjective. A classic case is in the movie the Big Short, the New York traders after going through realms of data and understanding what could go wrong, if something did go wrong. The traders went on a road trip to Florida to visit subdivisions and a strip club where the strippers were buying condos with no downpayment. The traders visited mortgage traders to see how the system was working and investment bankers who was buying and holding the paper. The underlying assumption was the mortgage market was strong and there was an expectation the government would ensure very few mortgages lost money. It was a big if, which is why many did not see it, but the facts were the facts.

In an article by John Kemp of Reuters, what is going on with the oil markets or crude oil. Is the price going up or down?

Commercial stocks of crude and refined products in the advance economies belong to the OCED or Organization for Economic Co-operation amount to 2.761 million barrels at the end of June.

Stocks were down 120 million barrels (-4%) below the 10-year seasonal average and the deficit had widen from 74 million (-3%) at the end of March.

US crude inventories declined in each of the 5 weeks since the end of June by a total of 19 million barrels according to the EIA’s Weekly Status Report.

Typically, US crude inventories decline in July and August as refineries ramp up processing to meet elevated demand for gasoline during the summer months. (People go driving for holidays, did you or your neighbors?) But the seasonal depletion this year was the largest since 2019, and among the largest in the past decade.

Most of the depletion occurred at refineries and tank farms in Texas and Louisiana along the Gulf of Mexico, the most closely integrated with global oil markets.

Hedge funds and other money managers have been increasingly bearish about the outlook for petroleum prices. The primary concern is the deteriorating outlook for the global economy and petroleum consumption.

Purchasing managers surveys and freight data have shown the 1st quarter rebound in manufacturing ran out of momentum in the 2nd and 3rd quarters.

A valid expectation is current prices and positions are consistent with a broad economic deceleration, a mid-cycle slowdown dampening petroleum consumption and halting or reversing the depletion of inventories.

If the slowdown does not happen and depletion continues, prices are primed for a rebound towards higher prices.

Linking to dividend paying stocks, if you worry about commodity prices it is really about supply and demand, if you own a dividend paying stock then you need to ask at what price does the company make money? If the price is higher, profits will be higher, if the price is lower it is best to move to alternatives which would do better with lower commodity prices. All investment decisions in hindsight could be relatively easy to make, it is the homework which helps you pick the winners and to try to avoid the losers. Part of your homework is to look at industry specific publications to see trends.

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