If you live in an urban area, the reality is most people do not really think about how their food came to the place it is. Whether that is a restaurant or supermarket, if it is a restaurant we look at the menu and decide what we want to eat. If it a supermarket, we pick a variety of foods and put some of them together to eat. How they got there and why they are there is less of a concern that if is good to eat or do we want to eat it? A book called Food Routes by Robyn S Metcalf published by The MIT Press, Cambridge, Mas, 2019 does. The book examines the logistics of eating.

Ms. Metcalf works with a nonprofit called foodandcity.org to really search where and how our food arrives at our plate. In the food industry there are 4 very important ingredients – reliability, trust, adaptability and technology.

Reliability is requisite because consumers expect some degree of consistency in products they consume. A reliable supply chain allows for consistent pricing and quality.

Trust comes from experience. Food suppliers rely on the transit of assets and funds in exchange for products human consume.

Adaptability because failure to deliver food happens. Most of us use the global supply system, even if we do not know it, and there are friction points that cause the supply chain to halt, break, leak or misdirect our food. The most glaring example is Hurricane Helene in western North Carolina. How does the system adapt?

Technology includes AI to make it easier for consumers to track their food to ensure they trust it. Technology is the big ingredient that will drive our food system forward. This includes more greenhouse growing closer to the consumer.

Interesting facts

Shipping containers were invented by Malcom McLean in the 1950′ and 1960’s. There are 20 million shipping containers in the world and about 6 million are on cargo ships. Shipping containers transport 70% of what we eat every year and account for half of all seaborne cargo.

For war time logistics, the pentagon does it best – ensuring military personnel are fed on time and on budget. That includes mobile kitchens and tracking food shipments. The US military and the Colonels who run have been in the thick of logistics planning for decades. (the old saying armies run on supply chains, target the supply chains and the front lines do not get fed).

In any disaster in the US, FEMA depends on private and public assistance. On the private side, Wal-Mart and the big food companies have plans to ensure food and water are available as they use their incredible distribution networks. An example is Sysco partners with the Red Cross to plan food distribution through the Red Cross network. Sysco also sends in its mobile kitchens once the US Weather Service declares a hurricane watch.

Big data is used and in demand by every food company.

Linking to dividend paying stocks, behind the scenes in the food industry there are billions of dollars in the logistics to ensure the consumer buys again. Most of the time, the consumer does not worry about how the product came to the store, but it is at the right price for their budget. As an investor you should have an understanding of the logistics of the company to determine how well it works. If it works well, other things being equal the results will come in. Often times, one of the few areas the company can control costs is on the logistics side.

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

When you are investor, the ideal thing to invest in is a company which is profitable and growing. A company you can hold on for a number of years, if it does a stock split so much the better and overtime the value of the holding becomes larger or your wealth increases. That is the ideal but if you examine the top companies 30 years ago or 20 years ago or 10 years ago things will change. The change is the hard part because if you bought a profitable company and made money you will have an attachment to it – your read the financial reports, you read stories about the industry and you are thinking you have a winner in that group. However, names change over the years and some companies while still profitable are less profitable and you hope they can turn it around. We all do it, but the lesson is what did you miss over the years, before you bought an alternative.

In an article by Steve Lohr and Don Clark of the New York Times News Service, one of the names for the past 30 years was Intel. The computer chips that powered many computers was Intel and one of their advertising slogans was Intel inside.

In 2005, long before the Artificial Intelligence or AI was considered an investable technology, Intel’s Board of Directors was presented with a proposal to buy Nvidia. The price was about $20 billion. The proposal was eventually turned down because Intel had a poor job of absorbing companies and it would have been Intel’s most expensive acquisition.

Today Nvidia is worth over $3 trillion and Intel is worth about $100 billion. Will somebody buy Intel?

The story of how Intel got left behind in the AI is representative of the broader challenges the company now faces. There were opportunities missed, wayward decisions and poor execution. The trail of missteps was a byproduct of a corporate culture born of decades of success and high profits when Intel’s chips and Microsoft’s software were the twin engines of the fast-growing personal computer industry.

The culture was hard-driving and focused on its franchise in personal computers and later in data centers.

It was a corporate ethos that worked against the company as Intel tried and failed, repeatedly, to become a leader in chips for AI. Projects were created, pursued for years and shut down because Intel’s leadership lost patience or the technology fell short. Investments in newer chip designs invariably took a back seat to protecting and expanding the company’s money-spinning mainstay – generations of chips based on X86 architecture.

In terms of profits, it was a very good course of action, profits roll in.

Going back to Nvidia, Intel’s microprocessors chips excelled in rapidly executing calculations one after another, Nvidia’s chips delivered superior performance in graphics by breaking tasks up and spreading them across hundreds or thousands of processing working in parallel – an approach that would pay off in AI computing.

After the Board decided not to buy Nvidia, Intel worked on a project called Larrabee effort. They spent millions of dollars to be better at graphics than Nvidia. Larrabee was a hybrid, combining graphics with Intel’s PC-style chip design. The chip was not that good and did not meet expectations, after spending millions and every quarter falling behind, the project was cancelled in 2009. Nvidia became a leader in graphics and now the AI revolution.

Linking to dividend paying stocks, profits are wonderful to an investor. Profits in one area will eventually lead to a decline. If you think about a company similar to P&G, they have multiple brands making billions of dollars or are diversified. If the company you invest in is making most of its profits in one area, enjoy it, but be aware that at some point there will be a change and they will make less or grow less.

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

All CEOs report to the Board of Directors and ideally the CEO and Board of Directors work together to implement the plans of the CEO. The Board is to provide direction on policy and discuss who the next leaders are because even though it seems some companies go run on autopilot, they do not. When a company makes a profit and things are going well, the Board of Directors are not in the limelight, however when the company loses money who is on the Board is very important. Are members of the Board providing good governance? are they asking questions? or are they seemingly going along with the CEO and picking up their compensation packages? When there is a boardroom fight the issues come to light.

In an article by Dawn Chmielewski of Reuters, Disney announced the James Gorman with become Chair of the Board. Mr. Gorman was formerly the CEO of Wall Street investment firm Morgan Stanley and did a terrific job. (my bias is I own share in the company). Recently he changed the structure of the company through acquisitions to become a wealth-management powerhouse as well as investment bank. Often times when a new CEO comes into being, some of those who were considered successors leave the company to take leadership positions at other companies. Morgan Stanley has kept the 3 names that were considered as leading candidates, which is a rare thing.

The past history of Disney is Bob Iger was CEO for a decade and transformed the company to a media powerhouse through acquisitions such as Pixar, Marvel and Star Wars franchises. He became Chair and his successor did not perform as expected and was let go and Mr. Iger took over as CEO planning on staying for 2 years but that has been stretched out to 2026.

Mr. Gorman’s task as Chair of the Board will be to find a replacement for Mr. Iger. The skills Mr. Gorman learned and used at Morgan Stanley to find a new CEO and retain talented people in the organization should be transferable. Reuters reported the 4 top contenders to be new CEO are: Disney Entertainment co-Chair Dana Walden; Disney Experiences Chair Josh D’Amaro; ESPN Chair Jimmy Pitario and Disney Entertainment Co-Chair Alan Bergman.

Linking to dividend paying stocks, if you like sports you will notice there are many teams that play the game but not all of them challenge for the Championship. They all have talented players, they play in the same arenas, what is the difference? Why should not all of them challenge for the cup? Sometimes it is the people and team or culture of the organization. Sometimes it is the execution of the game plan. Sometimes it is something else. For your investments are the independent directors ensuring the company is on the right track?

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

In the past election, politicians often painted the economy in 2 different ways – one was reasonably good, the other was not good. It seems both were correct, it dependent on where you were in the income spectrum.

In an article by Christopher Rugaber of the Associated Press, why? despite higher prices, have Americans kept spending at retail stores and restaurants at a robust pace?

One of the key reasons is wealthier consumers boosted by strong gains in income, home equity and the stock market have been spending more of their money.

The Federal Reserve suggests if that consumer spending, the primary driver of the American economy, could help sustain healthy growth this year and next.

Lower-income families have been disproportionately squeezed by higher rent, groceries and other necessities leaving them with less disposable income than before the pandemic.

The Federal Reserve noted inflation-adjusted-spending rose 3% in 2022 and 2.5% in 2023. For the quarter between April and June, spending was up 2.8%.

The Federal Reserve reported the value of housing increased 70% from the first quarter of 2020 to the second quarter of 2024 to $17.6 trillion. Stock market and mutual funds increased 86% to $37 trillion.

One sign of struggles for the lower-income consumers is the proportion of borrowers who are behind on credit cards or auto loans have risen in the past 2 years to the highest level in a decade.

Linking to dividend paying stocks, anyone who owns some will have more disposable income that is very good position to be in. In the economy, it is always very good to have choices and for monetary choices they often come over the long term. Investing allows compound interest to take care of the gains and as your wealth increased, hopefully you had managed your spending expectations. Many financial planners will tell clients at some point you can spend if you want to, rather than not spend, there are many ways to spend, but it is harder to earn. In all economies there are conflicting stories and with dividends you can decided to reinvest, buy something else or take the money out of the market to spend elsewhere and those are good choices to have.

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

In general terms, you will read or hear, stay away from investments in the publishing world because of the continuing changes from physical to digital assets. However, in every industry it seems someone is figuring it out better than others. That is the good and your homework involves determining which company is figuring it out.

In an article by Benjamin Mullin and Lareen Hirsch of the New York Times News Service, Axel Springer, the owner of Politico, Business Insider and a portfolio of German newspapers with split into 2 companies. Mathias Dopfner and Friede Springer will assume control of the media properties. Axel Springer biggest outside investors KKR and CPP Investments will take control of the company’s classified advertising business.

The deal values all of Axel Springer at $15 billion and the company’s publishing assets worth $4 billion.

Mr. Dopfner has ambition to turn Axel Springer from an influential German newspaper publisher to a global media conglomerate. With the split, he can move towards more acquisitions.

The advertising properties include Stepstone, an online jobs board and Aviv, a digital real estate company.

Linking to dividend paying stocks, in investing people often treat industries with the same brush stroke, but that is not necessarily true. It makes good sound bites, but by doing your homework you can find out what companies actually are profit generators that can pay dividends. They are doing something others are not and finding them will help generate wealth for you.

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

In the real estate market, the tag line of location, location and location is often seen because it is true. Where you are matters. In many communities some areas tend to be more stable than others, it the city, because of government buildings, there tends to be more stability than in areas with few government buildings. The same thing it is for work. Most of us believe that education is a path towards higher incomes and often times higher incomes are paid in larger cities, which means moving to larger cities to try to access those larger incomes. Then COVID happened and companies changed procedures to allow people to work from home. But where is home? could it be anywhere that stable internet is found? in some cases yes.

In an article by Emma Goldberg of the New York Times News Service, business leaders and local officials in Tulsa, Oklahoma puzzled for years how to fill the openings as people left Tulsa to go to either coastal cities? What would keep professionals in Tulsa?

The short answer is money. A local foundation the George Kaiser Family Foundation offered $10,000 to remote workers willing to move to Tulsa for at least a year. It has been paid to 3,300 people. This has led to other cities such as Topeka, Kansas; Savannah, Georgia; and West Virginia and northwest Arkansas to duplicate the efforts.

A study was done to find out if it was a good investment for Tulsa? A survey of 1,248 people found that the average person saved $25,000 on annual housing costs (cheaper rent or can buy a bigger house for rent in the big cities); the state brought in more annual income tax revenue and more sales tax revenue.

Why is this a good thing. In Tulsa, there are a number of colleges and universities including University of Tusla; Oklahoma State University (OSU) Tulsa; Oral Roberts University. but over 1,000 people that were college-educated were leaving the area than staying.

Remote workers has jumped from 4% of the country’s workers to 43% in the spring of 2020. The good news for Tulsa is that nearly 3/4’s of the people have stayed longer than one year. Some of them have been thinking Tulsa will be home for a long time. (The foundation has said it will continue to fund Tulsa Remote for the foreseeable future)

Linking to dividend paying stocks, initially many decisions are tied to money. Can you keep more of it and make more? then other factors will influence other decisions and all things equal, money while important is not the sole reason. You can think it is great to invest in a company to make money, but if you could make the same money and be within your values what is the better investment? only you will know the answer.

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

For every industry, there are benchmarks because they give you a reasonable snapshot of what is going on. The benchmarks allow you to formulate a theory and other data allows you to determine if the theory is good. If the theory is good, you can make decisions to do something or nothing and sometimes doing nothing is a good thing. A benchmark in the countries which consumers led the economy is how are luxury sales doing?

In an article by Mimosa Spencer and Dominique Patton of Reuters, French luxury giant LVMH reported a 3% fall in 3rd quarter sales.

The world’s largest luxury group generated $28.6 billion in revenue for the 3 months ending in September, a 3% fall on organic growth. The consensus was 2% growth cited by Barclays.

Fashion and leather goods comprise about half of LVMH revenue and 3/4’s of its recurring profit. The group is home to brands such as Louis Vuitton and Dior reported a sales decline of 5%.

In Asia, excluding Japan, of which China is the main market, the sales decline was a 16% slide from a 14% drop in the prior quarter. In Japan, growth slowed to 20% from a 57% jump the previous quarter.

Linking to dividend paying stocks, those that tend to shop for luxury goods tend to have the highest disposable income, if they are shopping less, then either the economy is not doing as well or they are preserving the income for something else because they expect the economy not to do as well in the future. This is why benchmarks are wonderful snippets, but they need further information to determine if the theory is correct, doing your homework is required.

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

We are undergoing a shift in how the world buys a vehicle. When the horseless carriage was invented there were a number of ways it could have gone. People tried steam, they tried battery or electric, but the technology at the time was the internal combustion engine. The horseless carriage replaced the horse and carriage for a number of reasons including thousands of horses walking around cities meant the streets were full of manure. A car meant cleaner streets and the choices that were made influenced how the normal family lived and worked. Years later, the public discovered a downside of a car meant pollution from automobiles and there has been efforts to change that. One effort is electric cars, but the profit per vehicle is less than the internal combustion engine or until costs to produce electric fall to the internal combustion model, automakers are hesitant to change. China which did not have many vehicles until recently, the government went all investments in electric vehicles. At present, because many of the investments in the infrastructure to build electric was done by the government, the producers who put the cars together have relatively low costs. In America, the government prefers the industry to put in the investments. The fact of the low costs means both European Countries or the European Union and the US want to impose tariffs on Chinese made electric cars to push the price.

In an article by Eric Reguly of the Globe and Mail, in the recent election in the US many politicians talked about manufacturing jobs. It is the same in Europe and the country of Hungary welcome Chinese investments. The second largest city in Hungary is Debrecen and a new $7.3 billion CATL battery plant is being built. CATL stands for Contemporary Amperex Technology Co. Ltd and the plant of 9,000 workers will supply batteries for more than 1 million electric vehicles.

Hungary is led by Prime Minister Victor Orban and his government courts both Chinese and Russian investments as well as being active in NATO which is helping Ukraine fight Russia.

The US imposed a 100% tariff on imported Chinese EVs, effectively eliminating the low-cost models from the market. (in China it is possible to buy an EV for $10,000 as a commuter vehicle).

In Hungary, the government welcomes investments from EV manufacturing including CATL, Eve Energy, Sunwoda, Samsung SDI, and SK Innovation.

Originally, VW, BMW and Mercedes welcomed the Hungarian battery plants and Mercedes will be the largest customer of the CATL batteries.

BYD, which overtook Tesla to be the largest maker of EVs, measured by unit sales, announced it will build a plant in Szeged located in southern Hungary. It will be the European Union’s (EU) first Chinese=owned EV assembly plant and its products will be sold tariff-free across the EU’s 27 member countries.

For Hungary, foreign investment was over $15 billion. For the auto industry in Europe, question marks are high. Prime Minister Orban wishes to be in the world’s top 5 battery makers.

For Chinese EV companies, the land in Hungary is relatively cheap, as is labor and energy. In addition, Hungary offered subsidies of $2.5 billion.

Linking to dividend paying stocks, sometimes countries use tariffs to protect the companies within its borders and that can be a good thing, in the past and likely in the future using tariffs have been election issues. However, when the foreign company builds a factory in the country to get around the tariffs, is that good politically? economically? will the local politicians now try to protect the foreign company and its domestic workers. Often times, profitable companies have and can have longer term horizons, politicians tend to have short term horizons and longer term tends to win out in the end.

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

Most people look at the weather forecast whether it is their app on the phone, watching the Weather Network, listening to the weather forecast when they wake up on the radio or TV, knowing the weather forecast is important. For the insurance industry, when the forecaster says it will nice that is music to the ears of the insurance company. Ideally in the insurance world you want few claims and many people paying their insurance. If the law or the bank requires you buy insurance, the insurance company feels that much better.

In an article by Emily Flitter of the New York Times News Service, the cost of hurricane season weighs heavily on the insurance industry. Things were going well, hurricane season was manageable, then Hurricanes Helene and Milton came calling.

Sridhar Manyem, an analyst for insurance ratings agency AM Best, noted while it is early, estimates of Hurricane damage costs will be in the $200 billion range. In the early stage of a storm, analysts look to past hurricanes and add onto what is seen and expected costs to get a number.

If the storm is too expensive for insurers, it will have a knock-on for customers. It will give the insurance companies a reason to either raise rates or stop selling policies in the certain areas. If a house has damage, the insurance companies are very picky on what caused the damage. If it was wind, then likely to be covered. If it was water, then likely not to be covered.

If the damage is flooding, then the number one insurer is a creature of the government called National Flood Insurance Program, which provides 2/3’s of all flood insurance coverage in the US.

The program is plagued with problems and owes $20 billion to the US Treasury. In normal circumstances this means insurance rates need to be increased. However, that would make insurance unaffordable to the people who need to buy flood insurance in order to keep their mortgages.

Similar to every industry in the marketplace, small insurers that are poorly managed or have concentrated business too narrowly, they could collapse under the weight of claims from storms. It was noted, since 2021, nine property and casualty insurers have gone bankrupt in Florida.

Linking to dividend paying stocks, while the overall economy is dominated by small and medium sized business, there are many large businesses that are profitable and can pay dividends on a yearly basis. Sometimes being large means a diversification of cash flows which helps the company through all the crisis which occur. Companies till have to well managed and execute on their business plan, but size can help. In private business, the rule of thumb is the company can have the customer it wants or does not want, in government, the organization is expected to appeal to everyone, not participating in an area is good for the company. If you were a consumer, you might have a different opinion, but the health of the company is why you invest and you like nice days.

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