If you are interested in logistics, then 2 of the best companies to watch and learn from are Amazon and Wal-mart. If you are interested on You Tube, companies such as the Wall Street Journal videos can by found which are interesting to watch and there are others.

In an article by Haleluya Jadero and Anne D’innocenzio of the Associated Press, Amazon, Wal-Mart and Target are working hard to increase their shipping speeds to please shoppers expecting faster and faster deliveries.

Amazon is the fastest at speed of delivery followed by Wal-Mart, Target, Shein and Temu.

Amazon has a built in advantage over the others because of Prime membership. A customer pays $139 a year for free 2 day shipping and other perks. The way same day delivery works is Amazon stocks the top 100,000 products customers want in smaller distribution centers located in 8 parts of the country. The idea is have shipments travel shorter distances with fewer touch points, this speeds up delivery and cuts costs.

Before the changes, Amazon shipped everything from massive distribution centers. In July, Amazon said 76% of customer orders were being fulfilled within the 8 regions, up from 62% before the change.

Neil Saunders, managing director of GlobalData Retail, said psychologically, fast delivery is very important to the consumer when ordering online. However, it is expensive to support and often requires a lot of new infrastructure.

Wal-Mart is planning catch up to Amazon, and its model uses from than 4,000 stores as fulfillment centers and delivery hubs for online orders. In addition, Wal-Mart is adding 40 parcel stations to stores in 9 states to process more goods to get them faster to customers.

Both Wal-Mart and Amazon use a high level of automation to help speed up deliveries. Walmart is automating all of its 42 regional distribution centers which hold non-perishable items. In terms of perishable items, Walmart is building 4 automated warehouses. As well it is planning to add more than 100 smaller facilities that are connected to its stores and handle online orders.

Walmart has 3 fully automated next generation fulfilment centers which hold the most wanted items. The company says it has reduced the number of steps to pack and ship orders from 12 steps to 5 steps. The goal is to increase online fulfilled orders and expand next and 2-day shipping to 90% of the US.

Target is spending $100 million on its own warehouses. The warehouses called sortation centers receive their orders from 30 -40 surrounding Target stores. The company expects to have a delivery volume of more than 50 million packages this year.

Linking to dividend paying stocks, one of the reasons to invest in the first in the class stocks is to maintain their dominant position the companies need the resources to invest in satisfying their customers’ needs and perceived needs. If customers believe they need quick deliveries, it takes great resources to satisfy the demands. By satisfying the demands, that means they will be repeat customers and spend more over the long run as satisfying customers. The problem for the competition is the resources to continuing to meet customer demand and have margins to make profits, which is the reason why it is often easier to invest in larger companies than smaller ones.

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

If you ever seen pictures of Germany in the early 1930’s you may have see German citizens using wheelbarrows to pay for their goods. Inflation was very high, the money almost worthless and no one really had a solution. The problem arising politically because something seems better than nothing, and a person with a charismatic personality will tend to rise in the polls. The status quo has to be changed, to what is often ill defined.

In an article by Paul Wiseman of the Associated Press, the latest country with overwhelming inflation and money almost worthless is Argentina. Unfortunately for the country, it has seen this chapter before, the last time was under the Peron’s regime and Broadway had a musical including the song by Madonna singing Don’t Cry for Me Argentina about some of the times of the country.

A new President, Javier Milei has been elected, and he has started with cutting government spending and trying to pay off debts. The proposals including slashing the currency’s value in half, reducing aid to provincial governments, suspending public works, cutting subsidies for gas and electricity and raising some taxes.

In Argentina, inflation is 161% and for a country that depends on agriculture including raising beef cattle, the drought has lasted 5 years. The result is Argentina has debts of $45 billion owing to the IMF or International Monetary Fund and 1 out or every 4 live in poverty.

One of the problems according to Monica de Bolle, a senior fellow for the Peterson Institute for International Economics is the solution being proposed will make the life of all Argentinas harder in the short run for a long term solution. By any measures, a recession is forecasted for Argentina with a growth rate of – 1.3%.

President Milei believes by slashing government spending and debt, the fiscal house of Argentina will for the first time in many years be in order. The theory includes by slashing the value of Peso, exports will rise because they will be less expensive for other countries’ consumers.

Linking to dividend paying stocks, the easy place to become wealthy is invest in a company or country that has been beaten down to low asset values. The hardest place to become wealthy is the invest in a company or country that has been beaten down to low asset values. The reason is time, how much time will it take and what will be your reward? In Argentina the time will be years, often times for a company it can take a couple of years, but one has to monitor the situation closely. It is easier to watch from a distance, invest in profitable companies which can pay dividends and if you wish to invest in beaten down country do it through ETFs or companies which have operations in the country.

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

Ever since Adam and Eve, people have been wearing some type of clothes and that has been a driver of the economy ever since. People are needed to sew the clothes, distribute the clothes, sell the clothes and generally there is a healthy markup or the ability to make a profit selling the clothes. All of these elements, investors are constantly examining how to make money in all these areas and it is possible to innovate. One of the latest companies on the rise is called Shein.

In an article by Katherine Masters of Reuters, Shein accounted for 1/5 of the global fast fashion market in 2022 outpacing Zara and H&M.

Shein’s actual strength is acknowledging that they have no idea what you want to wear, according to Rui Ma, an analyst and founder of Tech Buzz China. What Shein has is the confidence in their ability to ramp up production very quickly.

Shein’s ability is to tap a network of largely China-based suppliers which accept small initial orders and scale based on demand. This makes Shein have an ultra-flexible supply chain.

In contrast, Spanish based Zara or Swedish based H&M which pioneered shorter production timelines rely on predicting what styles shoppers will buy. For the most part, the companies still anticipate fashion trends, preordering the product between 3 to 12 months ahead of sale and committing to fairly large order volumes, says Simon Irwin, a former Credit Suisse analyst.

One 2022 study found Shein typically receives orders within 5 to 7 days and can send the products directly to consumers via air freight. Shipping can take up to 2 weeks, depending on the product and a shopper’s location or this a direct-to-consumer model.

Zara and H&M has a brick-and-mortar retailers who must distribute apparel across a global network of stores and keep those locations stocked. Of the 2 companies, Zara has the fastest speed according to Patricia Cifuentes, senior analyst at Bestinver’s securities division.

One thing to notice is how much are returns and can the chain put the clothes back into the system to maximize the chances it will receive full price?

Linking to dividend paying stocks, in every company there is the ability to innovate and have new competition into the marketplace, in all likelihood the next few years of how AI works, the barriers will change again. It is important to do your homework which includes access to industry journals to see what is going on in your investments. Why are those barriers to entry or moats still enough for the company to raise prices and keep their margins?

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

Many years ago, worked for a hotel which had a great location but was part of a small chain, a few years later, the contract was not renewed and became a Ramada. The profitability of the hotel increased, because it was linked to a reservation system and people knew the name. The reality is most hotels are owned a one chain or another and there is value in having many franchise hotels.

In an article by Michelle Chapman of the Associated Press, Choice Hotels International launched a hostile takeover of Wyndham Hotels and Resorts. If you do not know Wyndham you may know some of their franchises – Days Inn, LaQuinta, Ramada and 21 other brands encompassing 95 countries and over 9,000 locations, in addition to the reward card if you are a frequent traveler. Choice Hotels includes Radisson, Clarion and EconoLodge and Rodeway.

Choice Hotels has offered $49.50 in cash and 0.324 shares of Choice which is worth about $90 a share or a total of about $8 billion. Choice’s CEO Patrick Pacious said he would prefer a negotiated outcome, and a mutually agreeable outcome. Choice is willing to offer 2 seats of the Board of Directors. Choice presently owns 1.5 million Wyndham shares.

Wyndham Chairman Stephen Holmes said the offer was too low and it undervalued Wyndham’s growth potential.

Linking to dividend paying stocks, when a company does a merger or wants to do a merger, if the merger is not quick, it will consume more time of the senior executives in the company. They will spend more time which translates into offering more money and often there is no willingness to walk away. The more money which is offered changes the rational and potential profitability of the deal because of debt or higher interest payments. This means everything to create synergies has to work near expectations including sales of potential assets. Unless you believe the two companies are really great cash cows, it is generally better to move to alternatives.

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

Most of us are geography centric and that is a very good thing. Where we live is what we are most concerned about and then it spreads to a region within a couple hours of driving and within a few hours of flying. The world can be travelled, but most of us most of the time will be in a small part of it. When you are investing, many of your first choices will be products and services you use. For example, if you were going to buy a telecommunication company you likely will examine which company you pay a bill to. You can choose others, but you will have a bias and that is normal. Often outside of your scope the national government determines a policy which may or may not have a direct affect on you, but it tends to make you aware of it. For example, the war in Ukraine and Russia.

In an article by Geoffrey York of the Globe and Mail, the backstory is the western governments including Europe and the US imposed sanctions on the economy of Russia. The idea was to make the economy less active and have internal dissent among the Russian people – is the war worth it? When sanctions are imposed, countries have to find alternatives and it is always possible, but they tend to be more expensive and takes time to change the logistics.

One method is to form new alliances, in the case of Russia one group is called BRICS meaning Brazil, Russia, India, China and South Africa. It is noted the countries are not limited to only working with each other, but if the western governments impose their will, the countries have an alternative. In the case of Russia, their main source of income is oil and gas, Europe cut off most of their exports now oil and gas goes to India, China and South Africa. The cabinet of South Africa approved state owned Gazpombank (Gazpro) to be the preferred investor in a mothballed refinery on its southern coast. Media reports there were other bidders, but 19 were disqualified for technicalities or the process was rigged towards Gazpro. The rules after the bids came in were changed to criteria the bidder received extra points for being majority owned by an oil and gas producing state.

The refinery is a 45,000 barrel-a-day gas to liquids refinery at Mossel Bay. The deal was recommended by South Africa’s state-owned oil company PetroSA. In 2019 and 2020, French oil company TotalEnergies discovered gas offshore of South Africa.

In Washington, the state department said the deal could provoke US lawmakers to expel South Africa from preferential trade access agreements. However, it was the South African cabinet which made the decision and likely they considered the response.

Linking to dividend paying stocks, often times you will buy into a stock for many different reasons and then governments around the world will do things in their interests. It is nice if the government interests and the corporate interests align and that makes the marketplace much easier, but there are many different agendas in the global world. It is a reason most of us are bias towards our geographic part of the world. If you wish you can test it, if you have family members living on one coast or the other, ask them which provider would you invest in? Sometimes their answer is actually the better one.

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

The are many theories of how to play the stock market, some will make you money, some will not, but generally the consistency of making money on the markets without being an insider has been and is very hard. Some theories work better than others for a few years, but then they lose money or give back most of the money in a very short time. Still new theories and strategies will come forth.

In an book called The Man who Solve the Market – How Jim Simons launched the Quant Revolution, by Gregory Zuckerman, published by Portfolio Books by Penguin Random House, NY, 2019, the author gives a history of Renaissance Technologies. Their track record between 1988 to 2018 an average of 39.1% annual returns.

The head of Renaissance Technologies is Jim Simons and he started off as a math wizard working for universities and the government. During WW II, Mr. Simons was part of the group trying to decode the German communication and make life easier for the allies. Part of the solution was to look for patterns.

Eventually, Mr. Simons helped an University build up a strong Math department and this was good to learn management skills including recruiting.

In the world of math departments, they are dependent on university budgets, but some want to make more money and use their math skills in other areas of the economy. Mr. Simons wanted more money and he started in the commodities field because it was easier to gather data and understand what goes into commodity trading.

Eventually, he examined stocks, lost money and started gathering streams of information to find a small pattern that tended to repeat itself. Understanding the patterns and stock trading repeating itself eventually means making small amounts of money on thousands of trades.

In the book, the algorithms were not perfect and lead to losses and understanding the bottlenecks of the programs. Once it was sorted out, the profits came again.

The reality is it still possible to make small amounts of money on many trades but it took the continual declining of buying and selling commissions; it took programming great amounts of information for the machines to learn; and patterns tend to change as everyone sees the same patterns. It is a credit to Renaissance for leading the quant revolution, and with AI in the future for more people, perhaps we will see how Renaissance reacts to higher levels of computing.

Linking to dividend paying stocks, Mr. Simons did not really care what he owned, as long as the patterns make money. If you want a 39% consistent return, you have to take considerable risk and be fortunate more than you are not. If you want a consistent return by not losing money and getting paid along the way, dividend investing is a great method to do. In the book, when Renaissance was making billions, everyone in the firm was wealthy, do they still work hard or do they want different things in life when the money flowed into their bank accounts? With dividends investing the balance tends to be better.

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

If you are an investor you will pay more than a curious passing to the politics of the day. As an investor, it is possible you will learn about the process of government and government contracts which could influence the way you invest. If you are aware of how the process is supposed to work and somehow it does not work that way, your radar or smell test will go up. It may take a little why to understand what is going on, but your radar will go up. Sometimes you will invest, sometimes you will leave it alone. Often times it will depend on a word or two and the intentions.

Recently read a book called Civil War – A History of Ideas by David Armitage published by Allen Lane or Penguin Random House LLC, New York, 2017. In the book, Professor of History at Harvard University David Armitage wrote about civil wars since the Roman times. What is a civil war, what has to happen and who classifies war as civil or not. What should people do?

A parallel to what is happening in the US are lawsuits regarding should Donald Trump be on the ballot in various states because of the word insurrection. In various states, the one in Colorado has both side in court debating whether the January 6 was or was not an insurrection. The debate centers about the 14th Amendment to the Constitution and what did it mean when it was passed after the Civil War. The clause was deemed necessary to exclude people from being involved in government processes if they tried to change the administration with violence.

Linking to dividend paying stocks, fortunately with stocks, we rely on the numbers and the numbers should not lie. They maybe fudged, but if enough people see the statements and do analysis, the flaws come forth. Traders who specialize in short selling, often are the best folks at finding something wrong or not quite right. As an investor, you expect the company you are investing in to be above the law, one of the methods to ensure this is asking does the company make a profit for a number of years, can it easily pay its dividends and expect to do so for a number of years, and does the company tend to stay out of the courts. The courts have a great function in many aspects of people lives, ideally as a dividend investor you want to see less of them.

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

Mergers and acquisitions happen in all sectors and the process is the same for every merger. A company continually looks at strategy and sometimes it is determined a company would add to the existing company. The company has assets, delivery services that would make a great fit for the existing one. Then the hard begins of determining the best price which the other company will agree on and the merger can go forward. If the price is too low, the answer is no, and every company believes it is worth more, or the price is both an art and science. Sometimes it does not work.

In an article by Anirban Sen of Reuters, US health insurer Cigna Group called off its attempt to buy a rival company Humana after the pair agreed to the correct price.

If Cigna-Humana combination had gone through the 2 companies would have a value of $140 billion. It was expected the antitrust scrutiny would have been an obstacle to come. Cigna and Humana have business overlap concentrated in Medicare plans for older Americans.

Cigna Group announced plans to buy back $10 billion worth of shares for President and CEO David Cordani believes the shares are undervalued. This year the company has bought back $1.3 billion in shares.

Linking to dividend paying stocks, companies that are profitable have an active strategy group because they have the abilities to pay the bills – there is movie line in crime drama which says follow the money. The mergers go through a process and when the process reaches the press release stage, there is no plan B. The game plan is plan A. When things do not work out, as an investor you need to ask how does the company react? The merger process takes many hours of work and executive time, how does the company go forward?

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

In most industries particularly in commodities, bigger is better for efficiencies and profitability. In the domestic oil industry, Exxon bought Pioneer Natural, Chevron bought Hess Oil, Occidental Petroleum is buying CrownRock and the list goes on. While investors typically focus on the Europe and US, there are other countries with significant oil and gas companies, including Australia.

In an article by Scott Murdoch, Emily Chow and Lewis Jackson of Reuters, two of the largest oil and gas companies wish to combine to be larger. If the deal is completed, the biggest liquefied natural gas(LNG) producer in Australia, the world’s no. 2 exporter of the super chilled fuel that is expected to see decades of growth to meet Asia’s energy transition needs.

Woodside is headquartered in Perth, Australia and has a market capitalization of 56.91 Australian dollars, while Santos is headquartered in Adelaide is valued at 22.1 Australian dollars.

The two companies would have 260 million barrels of oil production, while the total production plus probable reserves at 5.39 million BOE. In turns of LNG sales would be expected to be 60 million tonnes.

Jun Bei Liu, a Tribeca Alpha Fund portfolio manager who owns shares in both companies said in today’s world oil is almost done so you need to get scale and generate as much profit as possible to invest for the energy transition.

Linking to dividend paying stocks, the world economy changes over time and to meet the classic supply and demand companies have to change. What has profitable at scale changes and sometimes to maintain margins, the companies need to consider and do mergers. The industry can still be and is profitable but the number of players changes, it is neither good nor bad, it just is.

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