Every country in the world has industries that are both symbols of the economy and carry more weight than other industries. If you think about the US, in the 1900’s you may think of US Steel and steel making, in the 1950’s it was GM and automobiles and present day it is Silicon Valley and AI. While the focus is on these industries all others exist, but one group of companies seemingly carry more than their share.

In an article by Eshe Nelson of the New York Times News Service, for the past few years in the country of Denmark, the pharmaceutical industry in particular Novo Nordisk has been the symbol for the country. Novo Nordisk was founded in 1923 and has many years of success, but in the last 5 years its blockbuster diabetes and weight-loss drug – Ozempic changed everything.

Novo Nordisk accounted for 11% of the Denmark’s growth, according to nation’s statistic office. ?Hiring by Novo represented 1/5 of employment in 2023, while it was the largest single contributor to corporate tax revenue.

This year, Novo Nordisk warned that its sales growth would slow, this has resulted in Danish Economy Ministry slashed the country’s growth rate by half to 1.4%.

Novo had doubled its workforce by 34,000 and is reducing its workplace by 5,000. In addition, last year the stock market capitalization put Novo as the biggest company in Europe, its shares have fallen.

Linking to dividend paying stocks, all stocks go up and down or fluctuate, in your portfolio if you are fortunate to own shares which rise, remember at some point it is important to take profits, either the money you put in and a little bit, then as the price goes up and down it matters less. With the profits you can diversify into other companies or use for lifestyle. In that fashion, you worry less about the price because you have made profits and have the ability to have patience and can do your homework in a more leisurely manner.

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

Every company makes investments that it expects to generate returns in the future and sometimes politics sometimes gets involved. In the steps to the decision to making decision – there is numerous departments from the local level to the state level to the federal level involved in helping to influence the decision. Often the departments float tax cuts, incentives for training, infrastructure improvements and list can go on. The company then makes a decision and hopefully the location is in business for years to come and makes positive contributions to the community.

In an article by Jeff Amy of the Associated Press, Hyundai Motor Group of South Korea made a decision to invest $5 billion in an auto plant in Savannah, Georgia to produce up to 500,000 vehicles a year. The models will be a combination of electric and hybrid gas electric. Hyundais said it plans to make more than 80% of the vehicles it sells in the US domestically by 2030. The increase is a 20% for 60% to 80%.

Then politics came into the play, the Trump administration has increased the number of raids it makes on companies looking for people who do not have the proper documents. Acting on a tip, ICE arrested 300 South Koreans who were working in the plant and sent them back to Korea.

Would the raid stop the investment made into the US by Hyundai? the governments of South Korea and the US had serious talks. Time continues and state and local governments have promise up to $2.1 billion in tax breaks and other incentives. Georgia Governor Brian Kemp had conversations with the White House about the visa issue. Do not expect more raids.

Linking to dividend paying stocks, often times these companies have enormous reach for both the local and national communities. Within the reach is access to highest levels of government to ensure the process works for the benefit of the company and its shareholders.

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

One of the social-media platforms that has been very successful is TikTok – it shares videos, people can make money from their viewership and because it is successful it draws a large number of advertising dollars. TikTok was invented in China and is owned by a company called ByteDance and the issue of what happens to its data has always been a concern. US authorities have claimed ByteDance is very close to the ruling Communist party and thus the government makes the app and its information collection a national security threat.

In an article by Alan Rappeport and Jose Bautista of the New York Times News Service TikTok has emerged as one of the biggest points of contention between the world’s largest economies. For the US, Treasury Secretary Scott Besssent and Jamieson Greer, the US trade representative have been the point people on the negotiations, the Chinese delegation is led by He Lifeng, Vice Premier for economic policy.

The solution that has evolved is for TikTok US and its servers continue to operate but owned by a US company. A number of firms have been rumored to be interested.

Linking to dividend paying stocks, TikTok is popular among young people and the issue will be its staying power for the next generation. If you are older, it is important to stay in contact with younger people to see what they use. Many times they will use something you do not simply because the older people do not use it. That suggests every generation will have their platform and it continually moves around the internet. If you invest in a company that becomes less popular with a generation it is still possible to make profits, but you can treat it as a utility not a growth company.

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

In every industry there always a new kid on the block or in the market. Sometimes it is a wonder kid with new ideas, but more often it is someone who wants to be in the industry and is backed by seemingly unlimited resources. It is the second scenario which is happening in Hollywood.

In an article by Zaheer Kachwala and Dawn Chmielewski of Reuters, Parmount SkyDance is preparing a majority cash bid for Warner Bros Discovery it back by Ellison family.

The bid will be for the entire company, including its cable networks and movie studio. Skydance recently bought Paramount Global for $8.4 billion. Skydance CEO is David Ellison who wants to be in the movie business. His dad is Larry Ellison who owns 41% of Oracle Corp. The company plays a significant role in AI and as the stock has risen, Mr. Ellison has been the richest person in the world.

Warner Bros is a media giant and some of its assets are HBO Max, the Harry Potter franchise, and CNN.

The media sector has intensifying competition, as tradition players race to gain scale and strengthen their streaming services as TV viewership declines.

Linking to dividend paying stocks, in the media world there is always money to be made with a hit show or movie, and a million ways to capitalize on that success. However, as dividend buyers you are paying for consistency to deliver profits. Sometimes company scale up, sometimes they divest assets, it is always an interest story to hear every quarter.

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

Sometimes the solution seems simple, and the idea will generate interest and it will take over the public’s interest and all seems good. In this following example, the simple idea is the Americans in particular are overweight which means a great deal of health-related costs. If there was a drug to help combat the weight, the pounds would disappear and the people would be healthier. That is a good thing. For investors the issue is who is doing it? and is the government helping?

In an article by Louise Rasmussen, Jacob Gronholt-Pedersen and Maggie Fick of Reuters, one company had a drug that showed many signs it also helped with weight loss. Novo Nordisk, the maker of Wegovy was originally developed for diabetes. In studies, people who were on it also showed weight loss, Novo’s people went back and out came Wegovy. It was one of the first big name drugs to come out, (in the world of drug making, being first is a very good thing because of patents). People started to use it, sales began to soar and so did the stock price. For a time, Novo Nordisk was the stock with the largest market capitalization in Europe.

When there are profits to be made, all companies salivate towards where the profits are coming from and soon Eli Lilly had a drug and it became the leader in the obesity and diabetes markets. Thus has resulted in Novo doing restructuring or 9,000 people were laid off. The number represents 15% of Novo’s worldwide workforce.

Lukas Leu, a portfolio manager at ATG Healthcare, said the obesity market was misjudged. It is much more consumer-driven than anticipated and Novo expanded organizational complexity too quickly.

At the present time the drug Wegovy is done through syringes but there is a pill coming. Eli Lilly’s Zepbound overtook Wegovy in weekly prescriptions in the US earlier this year. The company is expecting profits to come at the 4 to 10% rather than 19 to 27%.

Linking to dividend paying companies, execution is what you are paying for when buying a dividend paying stock which continues to make profits. The ideas are great, but how companies make money from the end user is what profitable business is all about.

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

For millions of consumers, part of the daily routine is to have a cup of coffee or more to start the day and sometimes throughout it. There are multiple coffee shops to choose from, you can buy the beans or instant, coffee products are there to help you. In the depression, there was an expression, brother or buddy can you spare a dime or enough to buy a cup of coffee. Coffee was and is still part and parcel of living in America. Have you ever wonder about why coffee and the business behind it? In a book called Coffeeland by Augustine Sedgewick published by Penguin Press, NY, 2020, the author looks at the history both good and bad of coffee.

After the California gold rush, the Central Valley of California was planted with wheat and soon San Francisco companies were being exchanging wheat for coffee, spices and chocolate and companies such as Ottis McAllister, Hills Brothers and Folger’s were developing into larger entities.

In El Salvador, Mr. Hill had settled into a plantation near the town of Santa Ana and the Santa Ana Volcano. He did not know much about the coffee growing business but there were many books about coffee planting available. In the coffee business just as any agriculture product, access to credit is essential to longevity. The price of coffee beans rose, Mr. Hill borrowed and expanded operations to include a mill, which became the place to wash the fruit from the seed.

Regulations and standards are important in every industry, the coffee industry through the New York Coffee Exchange helped established standard grades of coffee. At first, the standards were on the consistency of the bean and lack of other stuff in the bags. It evolved to what does it taste like? At the time, Brazil was the biggest supplier, they had a very consistent bean but not the greatest of taste. Coffee grown in Columbia and El Salvador had better tastes. Technology in terms of vacuum-packing coffee in tin cans allowed none Brazilian growers to compete in the marketplace. The growth of the advertising business and emphasizing a better taste.

During the war years of WW I, San Francisco merchants, operating in a commercial vacuum, collected their intimate knowledge of every plantation and mill in Central America. By the end of the war, San Francisco merchants had taken control of the Central American coffee trade. They were buying 5 times more coffee than a decade earlier or 12% of US imports and rising.

Another change was where a typical American shopped. For a long-time the grocer and dry goods store was the place to shop, the grocer helped customers from behind a counter, listening, advising, selecting, portioning, weighing, wrapping, tallying, packing and making change.

Neighborhood grocers served people who could walk to the store, or they depended on a steady profit from the items they sold most frequently, especially coffee. Most grocers padded their margins by pushing bulk coffee, which was cheaper than packaged coffee and could be blended and diluted to meet almost any preference and price level.

The war changed things, a new store that was centrally managed, vertically integrated chains of hundreds or thousands of stores, the store that led the change was A&P. The company started as a tea shop, where it could be the tea importer, roaster, wholesaler and retailer and beat other grocer’s by a third. A&P developed a new store, called Economy Stores that grew to 16,000 by 1930.

In 1908, A&P opened its own coffee-roasting plant in Jesey City, it began to import coffee from Brazil and by 1921, A&P was selling more than 40 million pounds of coffee at retail, it had become the largest coffee business – the largest importer, roaster and retailer in the world. The brands were Eight O’Clock, the top selling coffee in the world; Red Circle and Bokar. By 1930, A&P was selling over 100 million pounds of coffee.

If all coffee tasted the same, A&P would have been unbeatable. A&P used Brazilian coffee which was inexpensive and low quality.

Central America typically produced high quality, mild coffee or sweetness in a cup. San Francisco based Hills Bros in 1912 offered 23 varieties that customers had around a thousand choices a coffee for every price and quantity. By 1926, it had consolidated and cut to high-grade vacuum packed Red Can. Hills Bros and Folgers would embark on advertising programs to sell the high quality.

In many ways, coffee was the ideal supermarket product. First, quality advertised brands were usually packaged in brightly colored tin cans that were light by volume and perfect for piling into the eye-filling displays supermarket retailers favored. Second, as a daily drink, coffee was on the list of weekly shopping lists which makes it an attractive bargain item to tout in newspaper ads and circulars. Coffee was the most important branded staple of the American diet that was also produced outside the US. As a result of the depression around the world, coffee was cheap in the US.

For Mr. Hill, his plantation grew from 1,600 acres to 3,000 with over 300,000 trees planted and still operates you can check out the website http://www.jhillcoffee.com

WW II, coffee accounted for 10% of all imports between 1941 and 1945. Hills Bros won a government contract to deliver 18 million pounds of coffee vacuum-packed in 20-pound cans painted army drab.

In 2011, we have a third wave of Americans drinking coffee. The first was made up of big supermarkets such brands as Hills Bros, Folgers and Maxwell House. The second is coffee shops such as Berkeley-based Peets and Seattle’s Starbucks, which grew up in the high-quality mild coffee. And the third was a farmer-obsessed coffee movement made up of boutique roasters and stylish shops.

Linking to dividend paying stocks, from the book, although the author runs into many tangents, all industries go through change and processes and there are many risks and challenges along the way. Not all will survive, but they add their mark as time goes by. It is hard to determine who will be a winner and who will be in business and that is where your homework continues.

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

For millions of consumers, part of the daily routine is to have a cup of coffee or more to start the day and sometimes throughout it. There are multiple coffee shops to choose from, you can buy the beans or instant, coffee products are there to help you. In the depression, there was an expression, brother or buddy can you spare a dime or enough to buy a cup of coffee. Coffee was and is still part and parcel of living in America. Have you ever wonder about why coffee and the business behind it? In a book called Coffeeland by Augustine Sedgewick published by Penguin Press, NY, 2020, the author looks at the history both good and bad of coffee.

In 1928, due to a number of planters including James Hill’s coffee mill, coffee trees covered a 1/4 of El Salvador’s arable land and employed a 1/5 of its population. Salavoran plantations generated per-acre yield 50% higher than Brazil, producing an annual coffee crop than made up of a 1/4 of the country’s GDP and 90% of its exports.

Mr. Hill had arrived in El Salvador in 1889 as a travelling salesman of fabrics from England. He eventually became a tailor and married a lady whose family owned a coffee plantation. Mr. Hill then moved to his farm and became a coffee grower. The next step was to set up a coffee mill and send beans to San Franciso.

400 years ago, coffee was only found in Yemen and controlled by a small group of merchants. The control meant coffee was available in Europe, but it was expensive and not available to the masses of people. In England, coffee and tea were available but they were both expensive because the Dutch through the Island of Java (now days we know it as Indonesia) controlled the spice markets as well as having a monopoly on tea. By 1825, the British East India Company had access to Chinese ports and flooded the British market with inexpensive Chinese tea. Britian became a tea drinking nation, and the Dutch changed Java’s production from tea to coffee.

In the 1700’s and 1800’s, European countries all had colonies around the world. The Europeans moved coffee plantings moved around the world, particularly to Central and South America. Some of the islands of the Caribbean had wonderful soil and weather for coffee plantations and soon the island of Saint-Domingue, which we know as Haiti became the world leader producer of coffee, producing half of the world’s crop. The work was done by slaves.

Haiti had a slave rebellion, and the planters left the country and some of them took residence in Brazil. By the 1830’s Brazil had over 50% of the world’s annual supply with the work of the slave trade.

In the 1880’s the slave trade in Brazil was over and the industry was in disarray because it needed to pay people to do the work and in Java a fungus affected the coffee trees. The production in Java fell from 13% of the world’s market to 5%. This left an opening for other countries who grew coffee, as well as the price of coffee increased 50%.

The largest opening was for Latin American countries to the all-important US market. During the civil war, the military gave its soldiers coffee as well in the 1820’s the US became the first world power to import coffee duty-free or free trade. The free trade in coffee was part of President James Munroe vision of a greater influence in Central and South America or what is now called the Munroe Doctrine. Coffee became a working person drink or there was a growing market in the US as well the US government could influence governments through coffee particularly infrastructure improvements, governance – to ensure US interests are safeguarded and finance – offering loans through development banks to expand coffee production.

Linking to dividend paying stocks, for every commodity, there are multiple stories behind it to be where we see it now. Most of them involve who has the largest market share, who can influence the price and over a period of years can profits be made. After that you can add in government influence, labor markets and booms and busts to shake out the industry. As an investor you need to focus on at what price does the company make money using the commodity.

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

In his second term, President Trump has done many things by Executive Order and within the law, the phrase emergency powers act has often been used. In the past, Presidents had to go through the House and Senate to pass bills and even though President Trump’s party has a majority in each of the legislative body he has gone around them. Time will tell what happens if the Democrats ever have a President, will he or she be able to do the same thing? President Trump’s big economic push has been tariffs. Whether you think they are good or bad, one has to ask is there really an emergency on a broad tariff policy?

In an article by Andrew Chung of Reuters, the US Supreme Court agreed to take up the case the Justice Department appeal of a lower court’s ruling that President Trump overstepped his authority in imposing most of his tariffs under a federal law meant for emergencies.

The Supreme Court begins a nine-month term on October 6 and for the Court, they placed the court on a fast track, scheduling oral arguments for the 1st week of November. A decision will be made before December.

The Act President Trump has used is called the International Emergency Economic Powers Act or IEEPA. The tariffs remain in effect during the appeal to the Supreme Court.

The question is who can impose tariffs Congress or the President? Since the IEEPA was passed in 1977, it has never been used to impose tariffs. It has been used to impose sanctions of governments.

Linking to dividend paying stocks, some of these companies will have operations outside the borders of the US. Many of them will have used existing supply systems to lower costs to maintain margins to make profits to reward shareholders. If you own manufacturing or retail shares, you have likely heard or seen the CFO say tariffs are making an impact on our business. If things change at the Supreme Court those stocks will likely get a bounce in stock price, however it does through concerns elsewhere in the economic system or President Trump will likely have to raise taxes.

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

If you are a dividend investor, automatically you focus on the equities or the stock market. If you are invested in utilities, banks, oil and gas companies, both the stock price and the dividend to equal a total return has done well. However, the alternative to investing in the stock market is buying bonds which is much larger than the stock market.

In an article by Jamie McGeever of Reuters, President Trump’s administration has been focusing on borrowing more at the ultrashort end of the curve, while pushing the Federal Reserve to cut rates. The ultrashort end of the curve is US Treasury bills. Every week there are sales of the 4 week T-bills and the size has reached $100 billion for the 5th consecutive week.

In the article the benchmark 10-yield is the lowest since April’s Liberation Day, while the 30-year bond is backing away from 5%. Investors lending to Uncle Sam for 10 years are getting 4.08%, while investors lending to Uncle Sam for 4 weeks are getting 4.2%. The good news for Uncle Sam is the the $100 billion sale was 2.78 times over scribed or there is very healthy demand.

The big problem is rollover risk. Concentrating sales at the front end of the curve means the government has to refinance a large portion of the debt more frequently. An extreme case of rollover risk was in 2008, when real estate mortgage back securities went into default, all short term paper connected with real estate did not rollover. We are nowhere near that, but a risk is a risk.

Increase T bill issuance has been well absorbed so far, but cash going into bills is depleting liquidity pools and buffers in other parts of the system. The Fed’s overnight reverse repo facility is almost empty, and total bank reserves at the Fed are declining.

No one knows what the lowest comfortable level of reserves for the banking system is. In 2019, a sudden drop below $1.5 trillion triggered significant money market volatility and a spike in overnight rates. At the present time, the reserves are in the $3 trillion area,

The result of moving to the issuance of more T bills is the total outstanding portion of federal debt is 21%, slightly below the historical average of around 22.5% but above the recommended range by the Treasury Borrowing Advisory Committee of 15 to 20%.

As long as there is constant demand for the debt, then the issuance of $1 trillion of new issuance coming soon will not be a concern to the market.

In the world of finance, there are many moving parts and as long as the market has confidence in the system, then it all works. If the market finds a good reason to be worried, then interest rates have to go to ensure demand continues. Politically President Trump can call for lower interest rates but the market will determine what he has to pay. Given interest rates have a direct reflection of dividend stocks, if the government has going to ensure you 7%, would you buy stocks or bonds? Fortunately, the rates are low and should be going down because the economy is slowing, which makes buying a profitable company that can pay dividends a valuable thing to do.

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