If someone were to ask you – what company was started in a garage and now is one of the most admired companies in the world? Most people would likely say Apple. The company was founded by Steve Jobs and Steve Wozniak in a garage, because the 2 guys had little money but believed in a hobby type computer which eventually helped changed the world. The company introduced its first product the Mac and sales went through the roof. Afterwards it came out with products but not all were successful and eventually the Board asked Steve to leave. New management came in, could not achieve the same success, a few years later the Board bought NEXT which was started by Steve Jobs and he came President once again. Soon new products came and with the launch of the iPhone everything changed both the world and the company. Mr. Jobs was on the top of the world, however he got cancer and passed away too quickly. What happens to the company?

In a book called After Steve written by Tripp Mickle published by William Morrow, an Imprint of HarperCollins Publishers, New York, 2022 the author examines what happened at Apple.

There will be 2 people introduced who made Apple what it is today. Jony Ives a brilliant designer and present CEO Tim Cook.

If you think about Apple, you often think about the brilliance of its designs. The 2 people most responsible were Steve Jobs and Jony Ive. The design team was led by Jony Ive and it was the design team’s job was to bring the impossible to reality. Steve Jobs tended to drop in once a week and say yes or no, more often no until the simplicity of the use of the product pops out to the public. Jony Ive has the same exacting standards of Mr. Jobs and would carry on his legacy. Often bringing the impossible to possible is expensive but all accounts the design is beautiful and functional.

Mr. Cook has shows his brilliance in different areas than design. Mr. Cook came up through operations and spreadsheets and became a master at inventory control. One year, his control was so good, Apple almost had no inventory. The companies in China which made the products of Apple had a yellow line in the middle, the companies financed the inventory, and it was not until the product went over the yellow line to be made into computers and laptops that Apple booked the inventory to their books. That yellow line helped make billions for Apple.

Mr. Cook negotiated a deal with the largest Chinese Mobile Phone company – China Mobil to sell iPhones the same as they do in the US. Most people do not buy the phone outright but pay installments. China Mobil has the biggest customer base and outreach in China. This action helps sales, which is the reason all analysts look to sales of Apple products in China.

Another thing that Mr. Cook did was to enhance the services aspect of Apple. Once a person buys a Mac or iPhone or an Apple product, they are in the Apple universe or ecosystem. The company started small by focusing on music with iMusic and then buying the company Beats. After the success of iMusic, Apple expanded services to include TV and Movies and other entertainment features. If you are an Apple shareholder you are thinking iPhone has sold over 1 billion units in sales, there are many people that are in the Apple ecosystem or potential buyers of services and every year some will upgrade to the next level of Phone.

The book has a focus on Mr. Ives contrasting to Mr. Cook – do Apple products change because one of the best designers in the world is no longer focused on the design of Apple products. Mr. Cook is one of the best bean counters in the world which is wonderful to shareholders. A book such as this one also shows how public relations works from a crisis situation and how congressional hearings work from the CEO perspective.

Linking to dividend paying stocks, all companies have good faith and reputation about its consumers who look at the company in a million different ways. The customer base often changes as time goes on, that does not matter the company better or worse, just different. For investors, you may love what the company is doing, but overtime the emphasis on what they are doing changes, do you still love it? the best description is often a small company will do something extraordinary well, then it expands and the company changes, it is better or worse?

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

In our daily lives, we are exposed to many of the same concerns as countries face. What is good for the individual, does not often translate into what is good for the country. All around the world, most people have felt higher prices or your money does not go as far as it seem to the past. As an individual you have to make choices or gain income. As a country, you have to pay the debts but the people in general may or may not like it.

In an article by Libby George, Karin Strohecker and Aaron Ross of Reuters, two countries where people are not liking it are Kenya and Bolivia. Both countries have faced opposition from the public to higher taxes to pay down deficits. Bolivia’s credit rating is junk and Kenya owes over $80 billion and both governments want to increase taxes.

The public has seen inflation eat up the value of their spending power, they also see less spending on public infrastructure are the country seems to be falling apart. If they pay more taxes what will be fixed? The public is not happy and are protesting.

In Kenya, the country borrowed heavily in the mid 2000’s when interest was law and China was splashing cash to lend to emerging markets worldwide via its Belt and Road Initiative. Kenya borrowed money and roads, railways and factories were built. But not all the projects were finished resulting in many Kenyans feeling they had not benefited and not surprisingly there was some corruption along the way.

Debt can be wonderful, but it has to be paid back whether you are an individual or a country.

Linking to dividend paying stocks, hopefully when these companies take on debt they are buying a company to increase their profits and sell off assets or doing mergers. Debt can be a four letter word, so it is always wise to monitor your investments debt levels or changes will be made frrom investors on the outside.

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

If you are thinking of buying a car or truck, you would go to a dealership and you may think it is an independent company but in the reality the software system which helps run the dealership makes it all interconnected. In many companies, they buy software systems from software makers because the software helps makes the business better. The software companies tend to specialize and because they specialize if something goes wrong with the software, the public finds how interconnected the system really is.

In an article by Wyatte Grantham-Philips of the Associated Press, the software company behind car dealerships is called CDK Global Inc. In late June, CDK was cyberattack and the system was down for at least a week. Customers of CDK include Group 1 Automotive, a $4 billion automotive retailer, Lithia Motors Inc and AutoNation Inc.

CDK Global is based outside of Chicago, provides software technology to dealers that helps with the day-to-day operations such as facilitating vehicle sales, financing, insurance and repairs. GDK servers over 15,000 retail locations across North America.

GDK press release noted it receive back to back cyberattacks on June 19 and out of an abundance of caution, shut the whole system down and is providing alternatives to its customers.

Stellantis, Ford and BMW were affected. Group 1 Automotive owns 202 dealerships and franchises and 42 collision centers, said it took measures to protect and isolate its systems from the GDK platform. Lithia Motors and AutoNation did the same.

Mike Stanton, President of the National Auto Dealers Association noted dealers are committed to the protection of their customers’ information. Cybersecurity experts noted if a customer believes their data is breached, they should monitor their credit or freezing their credit and monitor any suspicious phishing messages.

Linking to dividend paying stocks, when you buy shares in a company, you often think it is reasonably independent, but if you look closely most companies buy software systems from other companies and hopefully adapt it for their own uses. There are companies who have large technology groups, but surprising most companies purchase software from others. You may want to know what groups provide the software which runs the business.

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

In every country, traditions develop over the years and people generally like them. Why the traditions develop is a different story but in general, what people eat has developed over many years. The food traditions typically developed around the landscape – in moderate temperatures where beef cattle roam and there is plenty of land and food, people eat beef. In climates which are have a lot of moisture, people developed and harvested rice. Often as people move around the country and the world, those habits will change but in times of festivals they come out again.

In an article by Candelaria Grimberg of Reuters, if you think about the country of Argentina, you likely will think about temperate weather, wide open plains and lots of beef cattle. Not surprisingly, beef has been a stable food item for generations. Many Argentine home have built in grills to cook the beef. Steakhouses dot street corners around Buenos Aires and barbecues can be found at constructions sites and protests.

Beef is an integral part of the Argentine diet. Looking at the diet of a country and examining it for trends can tell you what the average person in the street is worried about. Argentina’s economy has been going on a rough patch with triple digit inflation (about 300%) and a recession. While new President Javier Milei is pushing through austerity measures to lessen the government’s role in the economy, the economy is not doing well.

One of the places you see it, is in the butcher shop. People are still buying beef, but they are choosing less expensive cuts and looking for alternatives for their protein. There are alternatives as much of the world lives without meat, but it takes a changing economy to do the alternatives.

Beef demand is down, for the cattle industry the good news is exports have risen with the biggest customer China has increased buyer of Argentina beef.

Linking to dividend paying stocks, all areas of the world have traditions and some of the traditions will benefit particular stocks. For your investments, for the biggest markets, what traditions help continue to sell the goods and services? Why would that change? by looking at people’s traditions it can help you understand the overall economy and why they continue to buy the goods.

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

If you have flown from coast to coast, you may have been surprised about the prices and wondered where are the cheap fares? You may have heard for the past few years, it was possible to fly from London, UK to Venice, Italy for the price of the pizza. There were many stories about people going away for the weekend and the price of the flight was the least of their concerns.

In an article by Eric Reguly of the Globe and Mail, the cycle of economics using the airline industry is explained. The first step was in Europe every country believed and did have their own national airline for the health of their economy. Most lost money and after numerous years, deregulation or cutting the expenses of the airline was the cry by the politicians and citizens. Deregulation happened and 20 new airlines started operations and many them competed on the same air routes.

When the plane leaves the runway, it either has people in its seats or not, has cargo to be flown or not. To ensure passengers were in the seats, fares went down and people flew more, although over time fees started to increase. What was good or great for the passenger was not good for the company flying the planes. Airline consolidation is under way and that translates into less competition and rising market share for the big incumbents.

An example of the above is the US, there was deregulation and the system has an effective 4 airline oligopoly. The Big 4 are Delta, Southwest, American and United. The combined passenger percentage is 70% with each holding a 16 -18% market share, according to the US Department of Transportation. In 5th place is Alaska Airlines with 6%.

A recent IATA, the International Air Transport Association found that in the US to reach 50% of scheduled seat capacity, 3 airlines were needed. In Europe, it took the top 10 airlines to reach 50% capacity. It was not surprising European fares were less expensive.

The European market is now consolidating – Germany’s Lufthansa bought 41% stake in Italy’s ITA, the successor to bankrupt Alitalia.

IAG which owns British Airways, Iberia, Vueling and Aer Lingus has agreed to buy 80% of Spain’s Air Europa.

Air France-KLM wants to buy 20% of Scandinavian carrier SAS.

The Portugal government has put up its airline for sale, expect bids from Europe’s big airlines.

The airline bosses’ say consolidation means the bigger airlines profitable allowing them to renew their fleets and offer reliable, expanded services. They do not say fares are going up.

The consolidation of Europe’s airlines will mean by 2025, the top 5 groups will control about 73% of the market.

Linking to dividend paying stocks, in every industry there tends to be competition which is good for the consumer, but eventually consolidation which is good for the companies. As an investor, you want to own the industry stock in the consolidation phase as the companies are profitable but compete on the margins.

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

If you think about Amazon Prime members, which is 230 million people worldwide, and membership includes free shipping. As a Prime member you may start small, but soon rather than going to a store and looking for an item, you will likely see it on Amazon and it will seem easier to order it. Billions of packages are sent and equally Amazon makes billions of dollars from the subscription in 2023 it was a little over $40 billion. For years, if you ordered something, the package needed to have filler and that was supplied by plastic air pillows.

In an article by Michelle Chapman of the Associated Press, Amazon has announced it is shifting from plastic air pillows to recycled paper. The reason is two-fold: it is environmentally better and for Amazon the paper works better. (for a company the size of Amazon, it needed to be less expensive too).

Amazon began transition away from plastic air pillows in October at an automated fulfilment center in Ohio. The company was able to test and learn which resulted in a transition process including changing out machinery and training employees on new systems and machines.

During the testing, Amazon discovered the 100% recycled paper offers the same, if not better protection during shipping compared with plastic air pillows.

Linking to dividend paying companies, it is a long process to change processes and while the worthwhile goal of being environmentally friendly is good, for companies the cost to change machines and training people is more important. It took time to change from air pillows to paper and that is the way it should be. Companies are always examining process to find cost savings, hopefully the cost savings meats other corporate goals and the result can be relayed to the public to improve goodwill. There is a reason why it takes time in a large organization.

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

Every country loves to have a surplus of trade going to other countries for foreign exchange and that is what free trade is important issue to every President of every country. The President of the country will travel to every country where the host country spends goods in order to ensure good relations and hopefully free trade. The other country has business people who over time develop competing goods and they believe theirs should be sold without tariffs.

In an article by Zhang Yan, Joe Cash and Christina Amann of Reuters, for decades European vehicles have been sold in China, but Chinese have built up expertise in EV vehicles. These Chinese automakers have urged Beijing to hike tariffs on imported European gasoline-powered cars in retaliation for Brussels’s curbs on exports of Chinese-made EV, the state backed Global Times newspaper reported.

China’s Ministry of Commerce organized a meeting attended by Science Applications International Corp., BYD, BMW, Volkswagen, Porsche, Mercedes-Benz, Stellantis NV and Renault SA. The main aim of the meeting was to put pressure on Europe and lobby against the tariffs the EU announced to shield its car industry from Chinese competition.

The Chinese auto market is the 3rd largest in the world after the US and Europe or billions of dollars are at stake. EU car exports to China were worth $28.5 billion in 2023, while the bloc bought about $14 billion of electric vehicles from China according to EU statistics agency figures. China accounts for 30% of German carmaker sales, which also accounts for employment and economic activity in various cities or many vested political interests.

The EU would imposed up to a 38.1% duty on imported Chinese EV. This is one of the reasons companies similar to BYD have announced plans to build plants in Europe and Mexico.

Linking to dividend paying stocks, tariffs and free trade are very important to companies to sell their goods beyond their borders. The issues are complex and every country believes in free trade as long as in balance the trade helps their businesses more than it hurts them. Over time every country’s policy lines shift depending on their economy and how it is doing, which is why tariffs are complex. Companies prefer relative stable legislation then they can allocate resources (build plants) in relationship to the tariffs and return on investments. If a company sees the competition bending the rules, one of the many ways to maintain its advantages is to see tariffs and free trade rules to fight the competition.

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

If you own more than one stock, when the time for companies’ Annual Meetings, there is a tendency to vote for as management recommends. For some companies, there is a button to choose what management recommends or the slate and in other companies to vote means to go through all the motions. One can imagine most institutional shareholders, unless the company is losing money, tend to vote for management. On the retail side, there are reasons why you own the company and the reasons for voting or not voting will be a little more complex than institutions. Thus is it not usual for the nominees to the Board of Directors receive well over 90% of the vote, often it is in the 97 to 99% range.

In an article by River Akira Davis of the New York Times News Service, when Toyota released its voting results, one person received 71.9% while the others received in the 95% plus range. The one person is Akio Toyoda, the grandson of the founder of Toyota and the Chairman of the Board for the past 14 years. Typically, in the past, Mr. Toyoda would receive 96% plus of the vote.

Ahead of the vote, several institutional shareholders had planned to vote against Mr. Toyoda. Andres Schelde, chief investment officer of Akademiker Pension said better governance is needed at the Board level.

Mr. Toyoda is not stepping back from the company and noted he would assume responsibility for addressing the problems the led to Toyota violating vehicle-certification tests.

Linking to dividend paying stocks, even though many large companies have multiple shareholders, there tends to be shares in friendly hands that very few boards ever lose votes. If there is a loss, the vote tends to closer to 90% or less rather than 96% plus. Boards take the voting seriously and present the results in news releases and posts on the website after they have taken place. To have a vote in the 70% means Mr. Toyoda, even though he is the grandson of the founder likely needs to consider letting someone else be Chair.

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

If you are a regular person investing in the stock market invariably you will have a combination of index funds or mutual funds and individual stocks. The reason you need both is because the best stock to buy tend to be closer to $100 or more and if you have limited funds such as $1,000, you can only buy 10 shares. You need the company to do very well to make lots of money. With an index fund, as the markets over the course of the year performs to expectations, you assets will increase. The secret to great performance is to be invested in the handful of companies that are leading the market and at some point you will need to sell some or most of the holdings as another sector does even better. The way to minimize the risk is to ensure the companies that you are buying pay dividends to reward you because the stocks will go up and down with the cycles of the economy.

If you are a retail investor, you will likely spend more time watching and learning about the stock market, while some of your friends are content to park their money in index fund or mutual funds and that is okay. How does a retail investor stay current with the trends on the market? the same way everyone does – social media.

In an article by Preet Banerjee of the Globe and Mail, recently read a study that examined the impact of social dynamics on retail investor trading behavior helps to quantify how these social influencers affect performance. Not surprising the results are not good for the investor, it is good for the fees made in trading.

One of the key aspects of the research was to look at something called upward social comparison or the tendency to compare ourselves with someone who appears to be doing better.

In the study, participants were divided into two groups: one group was presented with information about top traders, while the other served as a control group. All the participants had better than average knowledge of investing. The researchers used a dynamic trading simulation that mimicked trading activity on real world online platforms to observe the participants’ behavior.

The results – the group exposed to top traders took significantly more risk, traded more actively and had higher overall trading volume compared to the control group.

The participants who traded more actively, did not match the best traders’ performance leading to decreased satisfaction with their own performance.

The social trading can be completely automated and big business. For example, eToro advertises a copy trader feature which allows you to have your account execute trades that mirror another user in real-time proportion to your account. The most copied account is a former trader managing his own account and his 23,700 followers.

There is a large role in social media in learning about stocks and investing and that is the good news. The harder part is realizing that one of the most important tasks of a retail investor is to take your time, learn and invest for the long-term will minimizing your risks.

Linking to dividend paying stocks, the reason you buy these stocks is the price of the stock tends to trade at a higher multiple than the rest of the market and every quarter the company pays you money to your account. With that money you can reinvest in more stock, you can buy something new, use in your daily lifestyle or your have options. The best traders have multiple strategies and making a little everyday, while trading millions of stocks is a good return. Most of us can do that, what we can do is try not to lose money or limit risk while enjoy a good return on your money.

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