Every company in the world relies on technology to run their businesses and everyday senior executives go over the key data in terms of revenues, expenses and projections. Technology allows it to be ongoing and seamless until the system does not work. For every company in the world, a choice is made to do everything or close to everything inhouse or contract the work out. There are advantages and disadvantages to each, but most companies choose to contract out some of the work. One of the disadvantages of contracting out the work is every once in a while, and everyone hopes that the once in the while is rare, something goes wrong. In the case of airline companies across the US, they use a service such as CrowdStrike to protect themselves from the cyber-attacks.

In an article by David Koenig of the Associated Press, CrowdStrike was doing a normal software upgrade, if you have a phone or personal computer, the companies offer regular updates, and they happen and life goes on. The problem was there was an error in the upgrade in the cyber security software affecting Microsoft operating systems which cause computers to go down.

Compounding the problem was for the airline industry, the technology issue happened on the busiest day of the holiday season with occupancy levels of planes at 90% and more. The software affected some of the older software programs which affected systems used to check in passengers, schedule crews, and make preflight calculations about aircraft weight and balance. The airlines could not offer solutions to passengers and had to cancel flights which compounds the problem till Delta Airlines total of flight cancellation reached 5,500, United Airlines total was 1,500. The good news was by the weekend or by Monday United’s total of cancelled flights was 19. American Airlines, Spirit Airlines, Frontier Airlines and Allegiant Air were back to normal by Monday.

Alaska Airlines and Southwest Airlines were not affected as they are not CrowdStrike customers.

Delta has offered waivers to make it easier for customers to rescheduled flights. In recent weeks, Delta Chief says company is facing $500 million in costs from the outage.

Linking to dividend paying stocks, with technology at some point there will be concerns, the system is not working, the issue is always what does the company do about it. Every year, the expectations for seamless service gets higher and higher and when things do not go perfect, people react to the system differently. Some can wait, some do not want to wait, and what does a company do for them? No days, people who do not like to wait, will post something on social media for good or bad and it may or may not be read by hundreds or thousands of people and will they change their buying of the service or product? We do not know but it could, so the issue is how does a company react? If you think they reacted well, then you can hold on the stock, if the company acts badly then it is good to find an alternative.

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

In all companies there always needs to be a host of opinions because all companies represent many different aspects. The company provides employment, they provide customers a good or service they want and hopefully need on a regular basis. The company by doing those things has supplier firms and the list goes on. If the company wants to and has a desire to grow, eventually it will need advisors to help them through the process. In most things in life, the best solution often needs a little massaging for everyone to agree to the best solution.

In the world of mergers and acquisitions, there will be different viewpoints and they have to be addressed one way or the other. What maybe a great economic decision, may not be a great political decision because of the things people believe at the time.

An article from Reuters, in the steel making world, Japan’s Nippon Steel which has had a presence in the US for years, made an offer to buy US Steel based in Pittsburg for $14.9 billion. In the world of politics, made in America or manufactured in America is a political concern and various interest groups have tried to strengthen their positions.

Nippon Steel reading the tea leaves, hired former US secretary of state Mike Pompeo to advise them. It would not be surprising they have many other advisors and public relations firm.

Linking to dividend paying stocks, after the economics works for the company and the price is agreed to many companies need a government agency to sign off on a merger and acquisition. If they need approval, the budget includes higher people who had senior levels of leadership in the government to go through the process and hopefully make the economics work. Individuals can be of different political stripes, but companies have to work with governments and do not want to tied too much to one party or another.

Linking to dividend paying stocks, the larger a company becomes the potentially greater influence it has and working with the government agency is a key element of its success. Somewhere in the regulations a government can use all the tools, but they rarely use all the tools, they can use some of them. Government relations are important element of large companies, and it is one of the reasons why they sponsor events to buy goodwill, what events do the companies you sponsor have and do you support them?

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

Many people around the world eat a slice of pizza at least once a month some do it more. It can be good for you, is tasty and affordable. Given the wide choice of pizza and the shops that make it, it maybe a tough choice to pick your favorite. Sometimes you see chain stores and forget how big they are.

In an article by Juveria Tabassum of Reuters, Domino’s Pizza believes sales around the world will be a slower and trimmed its target for new international store openings.

Dominio’s Pizza Enterprises is the brand’s largest franchise and has more than 3,800 stores in 12 international markets. It is based in Australia and is expected to open 600 new stores down from 925 originally expected. The master franchise said it was rationalizing stores in Japan and France.

Elsewhere around the world, Domino’s has over 14,000 international stores.

In the US, there are about 7,000 stores and according to CEO Russell Weiner, Americans continue to look for value. The company expects sales to increase by 3% rather than 4.8% in the 2nd quarter. The company has refreshed its loyalty program and offers such as the carry-out boost weeks that provide a 50% week-long discount. The program will drop from 2 boost weeks in the quarter to one.

A company the size of Dominos depends on managing supply chain costs and last year was able to lower them, which helped the company earn a profit of $4.03 a share compared to estimates of $3.68.

Linking to dividend paying stocks, sometimes the brands you love or go to can move across the globe because people like it. There will be logistics concerns about opening branches outside the original market, but they can be overcome with time and growth of the brand. Sometimes what you like it, can make you money but homework is the key because many brands do not become international brands.

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

If you look around in the community you travel through often times there is a large employer which affects the area. Sometimes that is educational such as college or university; sometimes that is a service center of government – state or regional government; and sometimes a manufacturing facilities and every combination of the above. It is often thought the longer a company is operating the more stability they provide for the area and the better the stability of the economy. One large manufacturing company is Boeing.

In an article by Rajesh Kumar Singh and Allison Lampert of Reuters, Boeing is one of the large institutional manufacturers and because it has a duopoly with Airbus, it can be taken for granted it will continue to operate the way it always has.

Boeing is the largest US exporter and employs nearly 150,000 people domestically. It supports millions more through a supply chain that includes thousands of business big and small around the world.

Economist Joseph Brusuelas estimates it contributes $1 trillion a year to the US economy and supports more than 5 million jobs.

A door fell off in flight in mid January, the plane landed safely. The fallout meant a slowdown in deliveries of Max 737. One of the fallouts is Southwest Airlines was expecting to replace planes in their fleet with Max 737s, the planes are slowly coming and Southwest had to adjust their flights by cancelling some and slowing pilot hiring.

Boeing expects to get back to a Max production of 38 a month in the back half of the year. This year Boeing delivered 175 jets in the first half of 2024, which is down 34% from a year ago. The slowdown ripples to suppliers such as GE Aerospace which has slow downed engine production as most supply lines are just in time to save money on inventory costs.

Similar to a person buy a new vehicle and there are fewer costs to run it, airlines which depend on Boeing to continually upgrade their planes are flying on older planes with a higher costs to run which affects their bottom line. Allegiant Air says that amounts to $30 million a year. Southwest the number is larger because it was expecting 85 new planes and have only received 20 planes. Fewer planes translates into less routes and greater concentration on profitable routes, which means some smaller airports lose flights.

Linking to dividend paying stocks, often times when you purchase these stocks you expect the stock to be slow and steady and that often wins the race in the long run. The companies can face the changes economies and cycles bring and as a shareholder you are better off for being a shareholder. We are seeing that a small event can cascade in bigger implications which is why after you read the slogans of the company, ask are they doing it?

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

It is the rare exception that people do not use social media and many of us are on more than one app. There are many wonderful reasons to be on social media including to be social. After you have used it, the reality is it still exists is to sell advertising. The marketing dollars of companies are in search to find a willing buyer who actually spend money and they use social media for that purpose.

At the start of the internet age the focus was on clicks and a company called AOL sent millions of dics for people to download and they did. The prevailing sentiment was this is great and the people which ran Time Warner thought they had bought a bargain in AOL. The merger did not go well for lots of reasons, but people found out rather quickly just because there were viewers, it does not translate in buyers of consumer goods.

The internet evolved and a company called Google after inventing the best search engine invented ad words to take advantage of print dollars moving to the internet.

The next breakthrough was Facebook, connecting people but still using a similar model taking ad dollars from print. Facebook.is very good at it and has one of the best analytics departments in the industry.

Technology continues to evolve with the introduction of the smartphones and soon people were doing different things with their phones besides using it to phone someone. In a book called How to Turn Down a billion dollars – The Snapchat story by Billy Gallagher, published by St. Martin’s Press, New York, 2018, the story of the rise of the video sharing company.

For the social media, how to evaluate it has always been an issue. The CEO of Snapchat Evan Spiegel talked to an expert in the name of Anthony Noto, for a while a co-head of Goldman Sach’s Global Tech, Media and Telecom Investment Division and an expert in how Wall Street valued social media companies. Mr. Noto explained Facebook ad impressions had declined year over year but were offset by revenue per impression increasing. The reason was the shift from desktops to smartphones.

Mr. Noto explained that although ad impressions were declining, mobile ads were earning more than desktop ads. This was primarily due to higher prices per click (the amount an advertiser pays when a user taps on an ad) or higher clickthrough rates (the rate at which users actually tap on the said ad). This was a crucial difference because the issue is whether advertisers were spending in a manner that was likely to continue and be long term or were they merely trying a new ad format and then abandoning it? In the 2014, mobile was potentially a bigger market and Snapchat was only a mobile app. The other issue was Snapchat was an addicting, high frequency app, which potentially advertisers would love to be a part of.

It is said the big guys have the advantage and besides greater access to credit, they can have greater advantage to data. For example, in 2013, Facebook bought Onavo. It creates a log of user’s actions on Facebook servers. Facebook product information teams examine the data for example how frequently and how long are people using specific apps. Apple and Google do the same thing because they own iOS and Android.

From Onavo’s data, Facebook saw that What’s App was installed on 99% of the phones in Spain.this helps explain one of the reason Facebbok bought What’s App.

In 2014, everyone was comparing themselves to China because of very few landlines, people had cell phones. However WeChat was the most popular and people did everything on one app. IN North America people were using iOS and A ndroid or Apple and Google.

in 2016, brand advertising was estimated to be a $578 billion business. For an app that concentrated on young people and was additive to the app staying for long period of times, brand advertising was interested.The downside is Snapchat was seen as fun and a lightweight to spend time. Snapchat came up with Stories and Live. People doing their own videos and posting it.

Linking to dividend paying stocks, every company needs to make money and every investor has to know how the money is made. Sometimes the answer is simple, sometimes it is more complex and everything in-between. As an investor you have to also understand how Wall Street values the company and that way you can decide to hold the company or look for alternatives. If you decide to hold, when you examine the company, then when the company tells you how it is doing every quarter, you will be able to say how long will that continue? Perhaps the answer is a lifetime, then you do not have to do anything. Bringing the company to simple, allows you flexibility to do something or nothing.

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

When you think about the economy your first thought is your situation, then the country where you live in and finally other countries around the world. The 2 biggest economies in the world are the US and China. If both of those countries are doing well, then the world is considered to be doing well.

In an article from Reuters, China’s economy grew much slower than expected in the 2nd quarter as protracted property downturn and job insecurity knocked the wind out of a fragile recovery. There is increasing speculation Beijing will need to add more stimulus to the economy.

China’s economy grew at 4.7%, the slowest since 2023. China’s government is aiming for growth over 5% which is low considering what it once was. The retail sector sales growth has slowed to a 18-month low as deflationary pressures forced businesses to slash prices.

Lynn Song, chief economist for Greater China for ING noted the road to hitting the 5% target growth remains challenging.

Among those reporting slower sales is Swatch Group, the world’s largest watchmaker, it reported a steep drop in sales and earnings amid weak demand in China.

New home prices continue to fall, battering consumer confidence and constraining debt-laden governments’ ability to generate fresh funds through land sales.

Linking to dividend paying stocks, as every country around the world moves from resources to low level manufacturing to higher level manufacturing to services, the nature of the economy does not change. This means the solutions offered by the government tend to be similar or what works in China also works in the US also works in many countries in Europe. As an investor you believe that your companies are best for you and they are different, but the reality is many similarities exist for other companies and countries. The simple phrase of profits = revenues – expenses is universal and owning a profitable company is always a good thing. Making profits and the ability to pay dividends is even better.

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

If you think back to the invention of the telephone, the Bell system evolved, and AT&T became the monopoly for Americans using the phone. That system was changed in 1984 when the government of the day broke up the company to what was known as baby bells and over the past number of years the phone giants which we have today exist. As technology evolved many people moved from landlines to cell phones and today that is the dominate way of using the phone. All companies compete for business, but sometimes have a long record of being in business counts for customers.

In an article by Michelle Chapman of the Associated Press, AT&T reported that in April data of nearly all the customers of AT&T cellphone service was downloaded from a 3rd party platform in a security breach. The data mostly involved data from 2022. AT&T is a large company which means more than 109 million customers were affected. The timeframe affected is May 1, 2022 and October 31, 2022 of more calls and texts. The data was held in the cloud by Snowflake Inc.

Snowflake and AT&T have been working with the FBI and Department of Justice. The DOJ noted the breach met the security standard for a delayed filing aby AT&T with the US Securities and Exchange Commission. The filing made the report public. The US Federal Communications Commission which regulates the phone industry has an ongoing investigation.

Linking to dividend paying stocks, while it is important in this case AT&T is working with all the agencies and boards of the government, the question for all the customers is what is AT&T doing for them? In the past we have seen companies offer free monitoring of your credit report because generally people that steal what money from the individual or company. We will see what happens, but what would your company do if there was a breach in security?

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

When prices increase more than normal, all politicians talk about the disastrous effects of inflation and on an individual basis it can be. If you work for someone else, you want to increase your income at least what inflation is. However, what is good for the individual is not great for the economy because if the majority do it, inflation continues to rise. The government’s role is to try to find methods to decrease inflation and what is good for the majority is good for the individual.

In an article by Brendan O’Boyle of Reuters, one country which has been wrestling with inflation is Argentina. The country elected President Javier Milel partly on the basis on fighting inflation to the mat and it appears he is on his way. President Milel made a number of cuts to government and government programs which did not help his popularity but inflation has fallen from 25% in December to presently 4.2% in June. For the economy in general that is a very good thing.

In countries such as Argentina, they have their own currency the peso, but in reality the American dollar is the still the currency of choice or comparison. The government is always concerned about currency rates between the two. The Economy Minister Luis Caputo announced a strategy to continue to fight inflation.

Argentina’s central bank started to sell US dollars in the country’s parallel foreign exchange market in an effort to fight inflation and freeze the country’s money supply. The bank issues pesos to buy US dollars on the formal exchange market, then the bank will selling an equivalent amount on the parallel CCL exchange market. The Economy Minister believes this process will be a knockout to inflation.

In the middle of July, the official exchange rate traded at pesos per dollar was 919.5, the so called CCL rate was 1.416.2 which the widely used black market was 1.500.

Linking to dividend paying stocks, all governments do not like inflation because other markets develop and become normal as people deal with inflation. In all industries there are always alternatives but most of the time the alternatives are the normal, however people quickly learn and use them. For your investments do you know about the alternative markets? what keeps your senior executives from getting a good sleep?

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

When a CEO is appointed, for some companies due to market share or a seemingly monopoly it is often considered the person has won the lottery because they will be well compensated and for the most part the company can run by itself. In a normal decade the CEO will be changed, and little has happened. This could be very good because the company remained profitable and paid dividends. Sometimes the opposite is the case, the CEO makes decisions which dramatically affects the company for the better.

In an article by Karen Weise and Cde Metz of the New York Times News Service, one of these cases is Satya Nadella of Microsoft. In the past 2 years, Microsoft has spent billions on AI and the stock is up 70% and the company is worth more than $3.3 trillion.

Mr. Nadella sees the AI boom as an all-in moment for his company and the rest of the tech industry. Mr. Nadella aims to ensure Microsoft which was slow to the dot-com boom (even though they used a Rolling Stone’s song in one of their advertisements) and missed the smartphones (Apple and Android dominate), Microsoft wants to dominate this new technology using AI.

Mr. Nadella has made billion-dollar acquisitions before including $69 billion to acquire video game publisher Activision Blizzard to add to Xbox. (people spend more money on gaming than they do to watch movies or entertainment).

Mr. Nadella pushed Microsoft to embrace cloud computing and open-source software that Microsoft that customers could freely adapt. Every company has a tradition of either doing it themselves or with the help of others. Microsoft was a company that want most of the work done in house. Open source means any software developer can add on ideas. That decision helped Microsoft become the number 2 market share behind Amazon or AWS in cloud computing.

In 2018, Mr. Nadella made a final decision after a 20 minutes meeting with other senior leaders at an annual executive retreat at the Suncadia Resort in the Cascade Mountains to buy GitHub. After spending years debating whether to link with GitHub, a decision was made to go forward and within weeks, Microsoft bought GitHub for $7.5 billion.

To make Microsoft’s cloud more sophisticated, Mr. Nadella made a $1 billion investment in OpenAI. The investment allowed for rights to OpenAI’s products and the innovative cloud customers. The main reason for the investment was Mr. Nadella believed OpenAI was doing something fundamentally different and better than Microsoft. (doing your homework never stops). After acquiring the rights, Microsoft went into the metaverse products but they did not sell well. The next product was GitHub Copilot, a tool for software developers to automate code writing. It was very well received and Mr. Nadella was all in for AI products.

Linking to dividend paying stocks, sometimes who is the CEO is extremely important for they can change the company for the better in the eyes of shareholders. Companies spend a great deal of time and effort, particularly at the Board level of who will lead the company. At the Board level there is a committee to examine the senior management and their performances and decide on their futures. You will often hear the President talk about the quality of the people and the bench strength. For your investments, do you have confidence in the next level of senior management? Is there someone who you expect to make changes to the company?

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