Most of us have some sort of routine which we start the day, because that is the easiest part to manage. The time we wake up, what we have for breakfast, the commute to work and then your work begins and things change because you do not necessarily control everything. That is normal and we tend to do it because one we like it and two your can concentrate on other things. Every once in a while, the routine is changed, whether it is the time you wake up, the breakfast or the commute, but something changes and we have to adapt.

In an article by Tim Hepher and Rajesh Kumar Singh of Reuters, United Airlines has approached Airbus about buying more A311neo airplanes. What has changed is Boeing’s concerns with 737 Max 10.

United Airlines has a long history of buying planes from Boeing and has not cancelled any orders but CEO Scott Kirby has removed the order from internal plans. The history of United includes companies they merger with such as Continental Airline that were long time Boeing customers. The problem for United is there are 2 manufacturers that dominate the passenger plane industry Boeing and Airbus and both have heavy back orders on their books. However, according to trade publication Air Insight, the companies are in talks about squeezing in if an opening should occur.

The issue at Boeing is they do not know how long the latest concerns – a door fell off an Alaskan Airlines flight. All the doors need to be checked and what type of fix is needed and for the regulators to sign off on the safety.

United has 45 A350s on order to be delivered by 2030. The planes would replace Boeing 777s.

Linking to dividend paying stocks, many companies deal with single suppliers for the bulk of their products, partly due to history and partly due to mergers within the industry, however the same companies are quick to have backups or alternatives if the supplier’s reliability changes. One of the elements you are buying with a dividend producing company is the ability to pivot if necessary.

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

Most of us are local people, we live where we live and like it, as you are living in an area for a number of years you appreciate the surroundings more. Whether it is a hill or mountain in the area, a river or ocean to see water, and the list goes on. While we are personally local, the commerce around is global. Part of that is the design of supply systems, there is always another area where costs are lower or to maintain and grow margins, lower costs typically must be found. If a company can also raise prices, so much the better for the company’s revenues.

In an article by Paul Wiseman and Mae Anderson of the Associated Press, they show how global the economy actually is. The least expensive way to ship goods is by ship and with mega container ships carrying 10,000 containers, using water will always be the least expensive. The Red Sea connects to the Suez Canal which connects to Europe, it is trade route than has been used for thousands of years. On both sides of the waterway, various countries have undergone transformations of their economies and government. For a shipping company, going through the Red Sea saves the traffic around Africa. The path through the Red Sea means everyone receives their deliveries as quick as possible.

In the article, a company near Baltimore makes washable keyboards for hospitals and is named Man & Machine. The company imports parts from China and its normal route is to go to Europe and then the US. The issue is the normal passage takes about a month, with the Red Sea shut down, the secondary alternative is to through the Panama Canal, but the Canal has been affected by drought. If you think about the next alternative – truck or rail means extra costs. Will the customers wait and want to pay higher prices? Who eats the extra costs?

Tesla has a factory near Berlin, Germany, it was shutdown for 2 weeks because supplies were delayed.

Marks & Spencer is a British retail chain and has warned the new spring collection will be delayed as well as home-goods collection.

Roughly 20% of clothes imported into the US arrive via Europe going through the Suez Canal said Steve Lamar, CEO of the American Apparel and Footwear Association. The number climbs to over 40% in Europe.

A trip around Africa adds a week or 2 to the journey of the shipment and 25% of global shipping capacity was going around Africa. The cost of the container has risen from $1,500 to $5,500. The only good news, things could be worse at the height of the pandemic the cost was $15,000.

The good news is after the pandemic, global capacity rose as shippers brought more ships to the market. There is currently a state of overcapacity, which is the reason why prices have not jumped more.

In most of life, there are alternatives, it is possible to ship clothes by plane, but not furniture. The reason clothes go by plane is clothes are fashion sensitive.

Linking to dividend paying stocks, while most of our lives are local, the economy is global. The supply system is a moving part and we all depend on world peace. The good news is in business all great businesses have a plan B and plan C when something happens to the supply system. Very often they have used in the past and can tell good stories about it. In your research you might want to know how the companies uses its alternatives to maintain margins.

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

After accumulating money, many people tend to change their buying habits to more high end stores. In the large cities you can think about 5th Avenue, Magnificent Mile, Rodeo Drive and there are many others, but all in come you can spend lots of money on clothing and accessories.

In an article by Mimosa Spencer of Reuters, one of the largest luxury goods group LVMH who’s stable includes Louis Vuitton, Dior and Tiffany, sales worldwide were $35 billion in the final 3 months of 2023. The growth of 10% was just ahead of analysts’ expectation of 9%.

LVMH CEO Bernard Arnault said the highest end products are those that have the highest demand in the world. Mr. Arnault believed the trend was going to continue in 2024.

Spending in China has increased and business at Louis Vuitton from high end Chinese spenders in Europe reached 70% of the level generated in 2019, before the pandemic.

Spending by Americans and Europeans remains subdued, partially offset by Chinese tourists to Europe. Analysts expect sales to increase 5% this year.

Linking to dividend paying stocks, when your dividends have increased to the point where you can buy high end goods, you will likely be a customer for life. The dividends come to you on a monthly or quarterly basis and through any downturn the economy may or may not go through. With your dividends you can spend, reinvest or do whatever you wish, knowing the next quarter is only 3 months away.

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

In the early 2000’s, Professor Aswath Damodaran on talking about valuation, used to say people to justify a growth projection used to say China or the Chinese market can be used to justify their valuation number. In some cases, that was correct, China emerged as the number 2 economy in the world and if the company made transactions it was possible. One area that tended to be correct was in Hollywood movies, but times have changed.

In an article by Claire Fu, Brooks Barnes and Daisuke Wakabayashi of the New York Times News Service, it seems the big blockbuster movies from Hollywood can no longer depend on China. The Chinese market is still important, but if you consider Aquaman and the Lost Kingdom. The studio made $1.2 billion worldwide on the first Aquaman and China represented about 25% or $293 million. Expectations were high, marketing budgets were spent and the movie brought in $60 million in its first few weeks down from $90 million.

In 2023, no US films ranked among the top 10 highest grossing movies despite movies such as Mission: Impossible, the Fast and Furious and Spiderman franchises. In 2012, 7 of the top 10 were US Hollywood movies.

Part of the reason is China produces more high-quality movies that resonate with domestic audiences. The top 2 movies were Full River Red and The Wandering Earth II.

Hollywood once viewed China as a market where they would always make money. Consumers are spending less on movies and box office sales have are below pre-pandemic levels.

Linking to dividend paying companies, all markets mature and local companies mature with the competition so the quality demanded is the quality produced. Many industries do not have wide barriers to entry and with technology, it is possible to do the same thing as the big players. The growth in capacity is a good thing in general, but sometimes companies lose market share and begin to lose margins or profitability. If the reason you are buying an investment and the seller says we can capture 1% of the Chinese market, remember the golden rule of investing – try not to lose money.

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

All companies around the globe do strategic planning as they decide to vertical or horizontally integrate their company. The companies have their core business and then decide to enhance something or capture a different piece of the market. Only after the merger goes through does the issue of how much did it add to the company is found out. There are potential savings and potential growth, but the execution of the plans is done after the merger.

In an article by Nishit Navin and Chris Thomas of Reuters, Japan’s Sony Corp scrapped plans for a $10 billion merger of its Indian unit with Zee Entertainment which would have created one of South Asian biggest TV broadcasters.

Sony submitted a brief to the Indian Stock Exchange asking for a $90 million termination fees for alleged breaches of their merger agreement and emergency interim relief by invoking arbitration. Zee denies the claims.

While neither statement said what conditions were breached, what is known is Sony did not want Zee Chief Executive Punit Goenka at the helm of the merger company because Mr. Goenka is the subject of India’s market regulator. Sony want Mr, Goenka out before the merger, Mr. Goenka wanted to leave after the merger as he denies the allegations.

If the merger had gone through Sony and Zee would have a portfolio of 90-channel plus.

Sony said the collapse of the merger would not expected to have any material impact on its estimates for the year.

Linking to dividend paying stocks, similar to many things in life, people and who they are the big factors in any merger. A company can have great assets or great potential assets, but does the other side want to work with them or is there a culture situation. Often times in startups, the culture is much different than older mature companies, but older mature companies have access to credit or potential to grow the business. People still count.

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

When you buy a share on the stock exchange, you own a piece of the company and that entitles to a number of features such as using capital gains if you sell at a profit or capital loss if you sell at a loss. For taxes, capital losses can be carried forward to lower capital gains in the future. You have a right to vote at the annual meeting for the Board of Directors, executive compensation, the auditor and ask questions at the meeting. Sometimes people who want change to policies will submit questions in advance and the company will offer advice on whether to vote for or against a proposal. If you never voted, there is often an option to vote for management’s recommendations. Some stocks are widely held or there are no controlling shareholders, but if the company makes money on a consistent matter, the odds are the institutional shareholders will vote with management, individuals will tend to vote with management.

In an article by J Edward Moreno of the New York Times, Exxon Mobil is suing 2 activist investors to prevent their proposals from coming to a vote of shareholders.

All companies have rules and regulations to submitting questions before shareholders, and generally it is time sensitive, meaning at some point the materials must be printed and mailed to shareholders so the questions need to be done before that point. The shareholders filed their questions before the deadline, but Exxon does not want to submit the questions.

Exxon has filed a suit in the US District Court for the Northern District of Texas (ExxonMobil is headquartered in Houston), accusing the shareholders of abusing the process for proposing shareholder votes because the proposal would mean the company’s existing businesses would be diminished. The shareholders want Exxon to speed up the process to become carbon neutral.

Under the securities law, Exxon says they have the ability to toss petitions that deal with matters relating to the company’s ordinary business operations. Exxon says the proposal does not seek to improve ExxonMobil’s economic performance or create shareholder value.

The company asked the SEC to offer an opinion but it was informal and subject to interpretation and for that reason it has gone to the courts.

Linking to dividend paying stocks, if a company makes money and can increase its dividend on a consistent basis most shareholders will vote for management. When the company does not make money, then all the complaints and issues with the company will surface and shareholder fights will result, likely new management will be the outcome. When a company makes profits, often shareholders will overlook the negative aspects to the company and hope overtime technology will improve outcomes.

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

Most of us live and work in a small geographic area and because we do, we all tend to have a regional basis towards investing. It is not a bad thing, but it is reality. However, as we travel and read we often see people doing the same thing elsewhere. In business, ever since accounting was invented and profits mean profits, wherever in the world you are, the principles apply.

In an article from Reuters, the European Central Bank (ECB) policy makers in December appeared confident that inflation was back to target but saw plenty of risks that still warranted steady policy and high borrowing costs according to the minutes of the meetings.

The ECB left interest rates unchanged and made in clear no further hikes were coming, but it was too early to discuss cutting rates. The minutes said there was no room for complacency, and it was not the time to lower its guard. A need was seen for continued vigilance and patience and for the maintenance of a restrictive stance for some time. The task has not yet been completed.

Investors are expecting rate cuts, but the bank noted it needed to push back against market expectations for rapid policy easing, even if there was unusual uncertainty around the inflation and economic growth outlook.

If the ECB was changed to the Fed would you notice any difference?

Linking to dividend paying stocks, one of the reasons to invest in these types of stocks is the rules for investing are the same throughout the world. You may stick to where you live because it relatively easy to monitor those companies, particularly if you are a user of those services. Companies around the world need to have revenues exceed expenses in order to make profits which means doing your homework can be consistent no matter where you are in the world.

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

Every year, the smartphone becomes more woven into our daily lives and every year the features make the smartphone become a necessity into our daily lives. For the makers of the phone and the providers of the service, this makes the continuous monthly payments of consumers a joyous sound. Soon people will think of necessity services as housing, food and cellphone service. This makes the companies that receive the continuous monthly payments as worthy of your investment dollars. In the smartphone world, the leaders are Apple and iPhone and Samsung Electronics which produces the Galaxy phones powered by Android which is owned by Google.

In an article by Michael Liedtke of the Associated Press, the new smartphones which have been available for sale since January 31 include AI features. Naturally the better technology comes with an increase of price, in the case of Samsung S24 Ultra a price increase of 8% to $1,300. The Apple iPhone Pro Max also increased prices.

Among the features is live translation during phone calls in 13 languages and 17 dialects. The S24 will introduce Google’s Circle to Search feature. You can use your finger to circle snippets of text, parts of photos or videos to get instant search results about what has been highlighted.

Another feature is to point the camera at an object and have a summary about what is captured by the lens.

The increasing use in smartphones comes after OpenAI thrust the technology into the mainstream with its ChatGPT bot.

Linking to dividend paying stock, it is easy to say that a profitable company has to embrace new technologies, but some are a given and others are a nice thing to have. As the year passes since ChatGPT was open to more of the population, consumers have raised expectations the AI will be used to make better products and services. Does it?

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

There is an expression which shows lets see the numbers or show me the money. What it means is there is always a method to express optimism, but sometimes reality is different. For example if the you say the economy is doing well, but 40% of the people cannot pay an unexpected $1,000 bill. It is good that people are working and have some money, but can it last? What shocks would send people, because living often means there will be shocks from unexpected expenses.

In an article from Keith Bradsher of the New York Times News Service, he observes car production set records, restaurants and hotels were increasing full and construction of new factories surged. All those are good things until you look behind the numbers. Deep discounts helped car sales; dinners chose cheaper meals (the cheeseburger rather than the Big Mac) and less expensive hotel. Many factories ran at half capacity, during COVID they were at a quarter or less.

China’s economy rose 5.2%, but that was from almost no growth for 3 years. The real estate housing market prices continue to be 20% lower which is not good for previous buyers and developers wanting to pay back billion dollar loans. China had a one child policy for a number of years, now that policy is hurting it as the population ages and it is expected China’s population will decline.

The government has spent money on infrastructure which helps people move around except most infrastructure leads to more debt because public infrastructure is not taxed and makes no money.

Linking to dividend paying stocks, every company around the globe can point to optimism otherwise they would be selling or winding down their business. When a company is profitable and can pay dividends there is true optimism to keep doing what it is business to do. It is important to be cynical when you hear the results, but optimistic after you have done your research or looked behind the numbers.

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