As an investor you have many decisions to make on the risk reward spectrum and one of the points of the interest is what will the policy of the Federal Reserve be? Similar to many organizations who leads the organization plays a role, otherwise why would shareholders give large payments to senior management? The Federal Reserve among other duties sets the interest rates. If you are a borrower you like them low, if you are an investor you what a balance to fight inflation, which means if anyone uses credit, they have an opinion about the federal reserve.

In an article by Christopher Rugaber of the Associated Press, the US Senate in a vote 80 -19 to confirm Mr. Powell for another 4 years. The vote was similar when former President Trump nominated Mr. Powell with a 84 – 13 vote.

Linking to dividend paying stocks, when you are an investor, one of the expectations is the government does little or no harm to the stocks you invest in. If you are very successful, the government may want some of the spoils, but only if you are very successful. The confirmation of the Federal Reserve Chair means similar policies will be followed and they seem to work last time, which is a good indication for the future.

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

Every government has the right and responsibility to determine the immigration levels for the country. Over the past number of years, some countries have closed their borders while others have open borders, ideally it is somewhere between.

In an article by Nicolas Riccardi of the Associated Press, economists believe because former President Trump tried his best to lower immigration, the country is waking up to a labor storage partly fueled by the shutdown during COVID. Another factor is the Baby Boom (those born between 1950 and 1965) generation is retiring and there are millions of them. The Baby Boom generation was the last generation where the average household had greater than 7 people. Now days the average is 4 or 3.

Giovanni Peri, an economist at University of California at Davis said the 2 million missing people then it would normally have and they are missing are helping to cause prices and wages to increase.

Steve Camarota, a researcher at The Center for Immigration Studies believes wages going up is good for the poor, and I think mathematically it is not possible to drive down inflation by limiting wages at the bottom.

The areas most affected are home building, hospitality and agriculture. In agriculture, many farmers believe those born in the US will not work in the fields at any wage.

Linking to dividend paying stocks, government policies have an affect on many business and whether you and others like them or not, they do have an affect on some aspect of the business. When demand is high and profits can be made with people, owners tend to look at mechanization of any and all rolls. For your investments what type of policies do you need to allow the long term value to go up? is either party helping you?

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

Governments around the world treat health infections differently and what is good in one country is not so good in another. In the US, information is relative free flowing and it is possible to receive information from the government to learn what the government is thinking. In China and other countries, they try to limit the information flowing when things are not going as well as expected. Then you need other methods to verify what the government is doing or not doing.

In an article from Reuters, one of Apple’s suppliers in the Quanta Shanghai Manufacturing City is having problems delivering on the goods needed by Apple. The reason, the government of China locked down the City of Shanghai over COVID concerns. If you wish to you can watch the containers being loaded to ships on You Tube – the scale is very large and impressive. When the city is locked down, the container ships are not being loaded which means supply issues will be a topic in the near future. It is not surprising China’s retail and factory activity fell 2.9% (for years China had shown growth and often in the double digits). Recent reports suggest China will open up Shanghai on June 1.

Shanghai has over 25 million people and China has locked down another 35 million people over the spread of COVID. The Quanta plant puts together abut 3/4’s of Apple’s global MacBook production and manufacturers computer circuit boards for Tesla.

Linking to dividend paying stocks, information is important and the expectation for dividend paying companies, they will file information on a timely basis. The deadlines for regulatory bodies will be met and information will be in the financial press. If that does not happen, it is time to seek alternatives very quickly.

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

When Russian invaded the Ukraine, the world had a number of strategies to say they did not like it. Technically they could not send troops to Ukraine because that would lead to a bigger war but they could and can send money and arms for the Ukrainians to fight. The world used the forms of the UN and other international organizations to isolate Russia and seized assets belonging to those are President Putin and some of the wealthiest Russians.

In an article by Matthew Goldstein of the New York Times New Service, the world including the US has found it is relatively easy to freeze bank accounts, if they can find them. It was easier to freeze the Central Bank of Russia because as a government organization it only has a few accounts and over $600 billion is frozen. However for individuals with possible influence on the President seizing yachts, planes and artwork is easier said than done.

Part of the problem is after seizing the assets, the government has to go before a judge and proving to a judge the assets were obtained from the proceeds of crime or through money laundering. If they can prove that, then selling the assets is a problem. For the yachts, there are only a handful of people willing to pay multi millions for the yachts. In the meantime, the properties must be maintained.

Over the years, Russians and other wealthy people have been skilled in using parade of offshore companies in places such as the British Virgin Islands, Cyprus, Cayman Islands (if you go to the Caymans do not be surprised to see many large mutual fund companies names on buildings), Jersey Island (near the UK), the Channel Islands and other tax haven countries. The issue is many of these places move money around for both wealthy individuals and corporations which you may own shares in as well as the government agencies such as spy networks.

Some Russian wealthy individuals have not been targeted because they are trying to stop the war. A bigger question is what happens when the war is over, will all the sanctions be released and the world can continue the way it was?

Linking to dividend paying stocks, if you are fortunate to amass a great deal of wealth it is good to be diversified in a variety of ways the financial system makes it easy to move your wealth around. The more you accumulate the more you will find out how the financial system is used for both good and not so good because it is just money.

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

In the marketplace companies sell to different consumers and although consumers may want generic items how they want the items differentiates companies. Sometimes it is easier to see the patterns looking back, for example fitness is a large category in the marketplace. People can do the fitness by themselves or with others for example in a gym. The way people do the fitness leads to a multiple channels to invest in – the clothes they wear, the shoes they wear, the places where they do their fitness and the infrastructure inside the gym.

In an article by Michelle Chapman and Anne D’Innocenzio of the Associated Press one of the companies which took advantage or adapted to the COVID was Peloton Interactive which makes the infrastructure found in the gym. The company allowed people to buy their equipment for their homes and with many states having lockdowns, those who routine including working out on machines bought them. As a company, Peloton which makes high end exercise bikes and treadmills ramped up productions and sold many machines. This was very good, except when states began to open up again and people had choices – to go to the gym, to ride bikes outside, the demand for the bikes and treadmills dropped and now Peloton has excessive inventory.

During COVID, Peloton increased its subscriber base from 700,000 to 3 million. When demand is high, it was very easy to attempt to ramp up production and Peloton was going to open its first US factory in Ohio with 2,000 employees (that was been cancelled). The company saw its sales double in 2020, in 2021 up another 120% and then crash in 2022.

With success there were many competitors such as high end gyms offering virtual classes; companies selling less expensive exercise bikes; companies such as Apple offering apps for fitness; Lululemon offering classes and services and a host of other competition.

Peloton is a turnaround stage and has lost money in 2022 which means the shares which roared up to $150 has dropped to $15.

Linking to dividend paying stocks, trends come and go and if as an investor you can catch a trend you will make money, as long as you sell before the trend stops or slows down. As a dividend investor you want your company to be profitable through many cycles or trends in the marketplace, in that fashion you can watch the trend, be interested in it and see where it goes.

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

It is hard to be an investor and not have an opinion of Elon Musk because he owns Tesla, Space X, Solar City Corp and Twitter. Each of the companies started from start ups and became successful, being successful does not mean the graph was a straight line upwards. The graph often times went very close to worrying about the payroll or lack of cash.

In a book called Power Play – Tesla, Elon Musk and the Bet of the Century by Tim Higgins – an automotive and technology reporter with the Wall Street Journal, published by Doubleday, NY, 2021. Mr. Higgins describes how the dream of battery cars started and when Mr. Musk became involved. In all likelihood, if Mr. Musk was not involved electric cars would be more hobby orientated than becoming mainstream as they are today.

Tesla started building a $100,000 Roadster and moved to the Model S, X, Y. 3. The dream of a $35.000 vehicle is still a dream because battery prices have to fall in order for the company to make money. A number of years ago, Mr. Musk said he would produce a $35,000 vehicle and half of million people put down deposits of $1,000. The car still has not been made but with Mr. Musk perhaps it was aspirational rather than reality.

In the book pre 2020, Tesla never made money and came dangerously close to not meeting payroll on a number of quarters. Similar to many companies Mr. Musk would announce what the sales were and then those in the company would have to deliver given the type of company Tesla had evolved to – it is different than how GM. Ford, Chrysler and Toyota do business. The other companies produce vehicles and have dealers sell and finance the cars. Tesla has showrooms and delivers a vehicle when people order a vehicle.

In all manufacturing companies, what people envision happens at large manufacturing companies does not always happen at small and medium sized companies particularly when they ramp up production.

Linking to dividend paying stocks, Tesla does not pay a dividend but it is an interesting company to watch because they are helping change the automotive industry to save the world. If you like Tesla or love it, buy the vehicle but understand while it is an important company, others can do exactly the same thing, is it better? In the coming years we will see because Tesla has owned the space, however every year every auto manufacturer will be bringing out new electric vehicles, will Tesla keeps its market share? likely not.

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

In every corporation people work for the company and although the corporation generally stays away from hot political issues, by there nature of employing thousands of people, some issues will come forth. Generally, corporations will say we pay your reasonably well to make your own decisions, however sometimes what the corporation will pay or not pay for in expenses means it is wading in political issues.

In some companies, sometimes these issues are lead by unions try to negotiate the benefits, other times it is companies trying to ensure it can attract people to the organization.

In an article from the Associated Press, Tesla is covering travel costs for US employees seeking out of state abortions. The company said in its 2021 Impact Report it expanded its Safety Net program and health insurance offerings.

Texas State Representative Briscoe Cain has said he will propose legislation baring local government in the state from doing business with any company that provides travel benefits for employees seeking abortions. US Senator Marco Rubio introduced a bill that would prohibit companies from claiming tax deductions for such costs.

The elephant in the room or the issue for Texas is Tesla recently moved its head quarters from California to Texas and was expanding to expand production in Texas. The majority shareholder of Tesla is Elon Musk who owns Space X which has its home base in Texas. Will those bills die on the books or become law? If you read the books on Space Barons which includes Space X or Power Play which is about Tesla, you will know the government has given billions to the companies. What will Tesla or Texas do?

Linking to dividend paying stocks, as an investor when you buy the shares you are concerned about the financial concerns of the company and expect it to be a good corporate citizen as it continues to make profits and pay dividends. To do that means the company has to attract and retain employees but as an investor what policy it has or does not have is generally not materially connected to make profits. As individuals you can make decisions about what the company should or should do but as long as they are not breaking the law, it is generally not something to be concerned unless it is affecting senior management’s time and resources.

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

In the world of unions, there are ups and downs similar to every other industry. Recently unions were excited because an Amazon facility voted to join a union. However not all warehouses are the same and people are individuals with different values and belief systems.

In an article by Doyinsola Oladipo and Jeffery Dastin of Reuters, an Amazon warehouse across the street from the Amazon warehouse which voted to join the union, voted against joining the same union. There are always reasons for and against to joining an union and many of the issues depend on whether the people think they will be at the location for an extend period of time.

Companies like to hire part time and if you are part time, likely working one or more jobs, you do not expect to stay at a location and while higher wages are desired the expectation just because you are in an union they will not come. There are multiple reasons to vote for and against a union.

However, the voting against the union means that other warehouses will see and hear about the result or the next warehouse is not a given they will vote for the union.

Linking to dividend paying stocks, when you own shares your concern is not how much the company pays its employees although you liked to believe they are paid a reasonable wage given the labor conditions in the town and city the locations are in. The reason you buy shares to hold on to for a long time is the company makes a profit and can pay a dividend. The other things are hopeful and part of the reason why consumers buy their products and services.

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

Every generation has investment managers gurus and some manage to be multigenerational. If you consider multigenerational, you consider changes which happen in the economy. An interesting exercise is to look at the Forbes 400 list from 1980, 2000 and 2020, over the the 40 years the names have changed. If you wish you can go back further and consider if you were a buy and hold investor some companies were great performers then something changed and did they adapt or used the same formula but people changed? The point is something changed and did the investment manager change?

Warren Buffett is in his 90’s and he has more winners than losers through a variety of economic cycles which makes Berkshire Hathaway Inc annual meetings something to pay attention to. What is Warren’s philosophy towards investing and how does he choose to spend billions of dollars to invest? In an article by Jonathan Stempel and Carolina Mandl of Reuters, the annual meeting of Berkshire was held and the question and answer session was 5 hours. (if you want you can watch some of the clips on You Tube).

Berkshire’s operating profit was $7.1 billion and within the orbit of companies Berkshire controls supply chains were managed. Berkshire held plenty of cash and some of it was used to by more shares in Chevron and he although he does not often buy shares after a company has announced it is buying another, Berkshire has bought shares in Activision Blizzard ( a gaming company) which Microsoft has announced a bid to buy its shares.

A shareholder asked why he bought 14.6% of Occidental Petroleum and insurer Alleghany Corp? Mr. Buffett said he bought Oxy Pete because he read an analyst report and for Alleghany, the chief executive of Alleghany who once worked for Berkshire’s General Re business wrote to him.

Berkshire used $51 billion to buy equities and its cash stake went down $40 billion to $106 billion.

One thing Berkshire will not be doing is buying bitcoin and sometimes it is important to know what investment managers are not buying.

Linking to dividend paying stocks, Mr. Buffett loves dividend paying stocks particularly if they have moats or moat like conditions. Some of his biggest holdings are in Coca cola, BNSF railroad (they are not making any more railroads), General RE Insurance and Geico Insurance (they produce cash), Apple, Chevron and Occidental Petroleum and a host of other companies. Often times it is good to ask a guru what he or she does not like and then you can decide on what they like.

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