Most of us like the bank we use, however if it made a mistake and put more money into our accounts than normal, what would you do? We all know what we would like to do, but what would you do?

In an article by Amanda Holpunch of the New York Times News Service, the British bank Santander UK (parent company is Santander of Spain) made a computer mistake paying tens of thousands of people on Christmas Day. About 75,000 people received mistaken payments.

The banking system as it is, meant Santander send money to multiple banks, the payments were from the 2,000 commercial and corporate customers, somehow duplicate payments were made.

The bank can easily or reasonably easy access is own customers, however it needs the help of others to recover the money. What is not known is how banks will deal with customers who have spent the money.

When the banks make a large deposit by error and the person does nothing, the banks have used the law to arrest people on fraud and theft, but what about smaller amounts?

Linking to dividend paying stocks, the error by the bank shows how interconnected the world is and that is a great thing when everything works well. We have seen supplier issues because we contract out rather than do more things in house. It can be a concern, but things are not likely to change, the interconnections are likely to become greater as time goes by.

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

Every day and month and year will bring more and more solar and wind projects on stream across the world. From an investor point of view, the electricity generated will be sold in the grid, every day and after the up front capital costs, the solar and wind act similar to utility stocks. The rate is regulated by state agencies which tends to go up each year and investors receive their dividends. As the country moves towards more solar and wind, where they should go is a good sign of good things to see in the future.

In many areas of the country, there was surface mining to bring what is down in the ground to the surface. The process is to either dig very big holes in the ground or remove the top of hills and mountains to remove the mineral. In Appalachia the large concentration of coal meant millions of acres of land were used for mining. What happens to the land afterwards?

In an article by Carey L Biron of Reuters, there are proposals to bring solar farms to essential waste land and boost economic fortunes in the area. If the areas have large solar farms, the farms can pay municipal taxes which can improve the lives of the people in the area.

In the article two companies Sun Tribe and Dominion Energy are proposing enough solar farms to power 30,000 homes.

The US government formally began looking at putting renewal energy installations on distributed land including mines and toxic landfills. Since then RE-Powering America’s Land program has mapped more than 100,000 potential sites covering more than 44 million acres and helped establish more than 417 installations producing 1.8 gigawatts of electricity. (Think of the agency as similar to the US Geological Survey which determines where minerals are located).

Linking to dividend paying stocks, we all believe the country is large and it is, but over generations parts of the land has been misused. We can look at agriculture (where early settlers planted crops, the nutrients in the soil was depleted and the solution was move west). In many states because of the farmers moving west the country was populated. For generations we took out minerals from the earth, it is good news to see some of the lands will be used for solar farms. For dividend investors as long as the electricity is being provided, how it is provided does not matter, but when the sun shines and the electricity is produced, it is a good day.

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

All manufacturers hope to make their products correctly the first time and quality control is very important. Without good quality control, the company has to pay for manufacturing costs twice, which is not good. All the savings the engineers found on the production is wasted. Many years ago, American auto manufacturing was so bad, Japanese automobile companies rose from the depths of sales. The reputation of American manufacturing took many years to change and billions of dollars in manufacturing and advertising dollars.

In an article by Hyunjoo Jin of Reuters, Tesla recalled 475,000 Model 3 and Model S electric cars to address rear-view camera and trunk issues. The National Highway Traffic Safety Administration (NTHSA) announced vehicles from 2014 to 2021.

The problem is the camera does not work well because the harness maybe damaged by the opening and closing of the trunk lid preventing the rearview camera image displaying. Drivers have become use to using the cameras rather than the rear view mirror and side mirrors. Car companies introduce new technologies every year and the CES (Consumer Electronics Show in Las Vegas) is a great example to see what could happen. How people use the technology is what engineers need to determine.

Linking to dividend paying stocks, all companies have manufacturing issues, everything rarely goes perfectly, but if the manufacturing issues become a concern and is material companies have to report the concerns. Fortunately in this case, the operations of the vehicle is not affected, just using some of the features. In this particular case the option is to use the side and rear view mirror, but once we start using a piece of technology we want it to work all the time. Change happens to us all, we expect it, want it, embrace it and complain when is does not meet expectations.

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

The US shopper drives the economy for about 70% of the GDP is related to some aspect of shopping or people buy lots of stuff. For the retailer, selling the merchandise at reasonable margins is an art and science. There are formulas to follow, it is an art because people are involved and when the customer leaves with the merchandise hopefully they are happy. Life is good.

In an article by Siddharth Cavale and Arriana McClymoe of Reuters, the only thing not so good on the horizon is the return policy. Retailers wanted to encourage sales because of all the stories about supply chain problems they decided to extend the holiday purchases return policy from 30 days to 60 or 90 days. Analysts expect returns will be in the $112 billion to $114 billion in the coming weeks. The online returns are expected to be $43 to $45 billion.

The issue is does the return policy included shipping costs, cleaning fees and repackaging which means margins go down for retailers.

Consider a sweater price at $100. Most retailers margin on the sweater is 33% or $33 (when the sale is on they reduce the margin). If a shopper purchased the sweater on line, the margin drops to $17 because of shipping fees, according to Alix Partners report from May 2020.

If the customer returns the sweater to the store and it is not resold, the retailer loses $25 in margin. The lost margin goes to $31 if it had to collect from an on line purchase and return it from a customer’s home to distribution centre.

Linking to dividend paying stocks, when you look at retailers stock and see how they benefited from increased holiday (Thanksgiving to Christmas) sales, consider the costs of returns before you jump for joy.

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

In England, similar to every other country in the world, part of the economy is based on trade with other countries. For a long time, England had a number of colonies around the world within its orbit India, Australia and Canada were some of the biggest countries and British merchants had the ability to sell at preferred status. Eventually India had its independence and Australia and Canada lessened their dependence on England. England moved to the European Union and many British companies sold their goods throughout Europe. Then Brexit vote happened and England decided to drop out of the European Union for various reasons.

In an article by Eshe Nelson of The New York Times News Service, the question is how has the process been going. For it is one thing to say you want to drop out, it is another thing for reality to happen.

For the first months after Brexit, the system collapsed because no one knew what the rules were. Perishable goods got stuck at ports, retailers discovered their supply chains were obsolete and trucking companies stopped delivering to Ireland. It took a couple of months to become somewhat back to normal. But what remains is higher costs, time-consuming paperwork and countless lost opportunities.

An example is Netherton Foundry run by Neil Currie. Prior to Brexit he could sell his black iron pans and cookware from Shropshire, the birth place of the Industrial Revolution to customers in Berlin as easily as Birmingham which is located about a hour away. Post Brexit, every item leaving his shop needs a 4 page customs form which takes up to 20 minutes a shipment. In addition, every item is $15 higher in price to cover the additional administration of customs checks and taxes. Plus it will take longer to arrive at the independent shops in Europe. The shops are asking themselves it is worth it to stock Netherton Foundry’s products?

In the first 7 months of the new trade deal Britain’s exports fell by 14% and imports by 24%. The UK Trade Policy Observatory research group estimates that means $44 billion in lost trade.

For Netherton Foundry, one of their biggest customers in Germany does not want to deal with all the paperwork so their solution is for Netherton to send the products to a distributor in Belgium who then distributes to Germany.

Marks and Spencer, a large British retailer operated a chain of stores in France and decided to sell them because of supply chain complexities.

A company called Luceco which makes and imports lighting and wiring products from China and sells them to retail stores. Between $3 and $4 million in sales were stores in Ireland but tariffs have to be paid twice – when they enter Britain from China and leave for Ireland. (Ireland remain in the European Union). Similar to customers around the world, container prices have increased. Luceco used to spend $2 million on containers from China, that has increased to $16 million. Prices have increased.

2022 promises more custom checks from products brought into Britain.

Linking to dividend paying stocks, every company has to deal with supply chain operations. Where do the raw materials come from? where and how is the product manufactured? how is sold? Some products it is easier to cross borders such as software, but when a product has physical characteristics it is subjected to more restrictions because people can see it. We have seen supply chain problems happen because of the weather, COVID, and a host of other concerns. The issue is can the company retain sales and grow them as well as pass on costs to retain their margins? If the answer is no, then find alternatives and come back to the company in 6 months to evaluate how they are doing. Although it is ideal to buy and hold, love people not your stock holdings.

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

When people invest money, they often are asked what do you want and the answer is more. Partially it is a good answer, but in reality it means sometimes losing your money because some investments are too good to be true. It happens to many, it often happens to a close net association or ethnic group because the victims tend to trust the person at the top.

In an article from the Associated Press, about 500 investors mainly from South Florida’s Venezuelan American community were taken in by Efrain Betancourt sales pitch of high-interest returns on their investments in his short-term loan operation Sky Group USA, the Miami Herald reported.

Mr. Betancourt raised $66 million in promissory notes, much of it went to his lifestyle including a large waterfront condo and a wedding to his 4th wife in Monaco. Mr. Betancourt paid out $19 million in interest using a Ponzi scheme or the first people in received money but that did not last long.

The scheme lasted January 2016 to March 2020 which countless borrowers defaulted on their payday loans. Sky Group had a cash flow problem and unable to make interest payments on investor’s promissory notes.

The defence lawyer argued the promissory notes are loans, not securities so the company did not break the law when they failed to pay back the lenders.

Linking to dividend paying stocks, companies which make a profit over a long period of time can pay dividends. If you receive dividends you do not expect high returns, it is a wonderful bonus if you receive greater than 10%, but the expectation when buying should not be very high returns. In the story about the rabbit and the turtle – slow and steady wins the race and people do not lose their principal investment. If you get pressured to send money quickly, slow it down.

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

We have recently survived the holidays and with the holidays people tend to use and smell more flavors that normal. We allow ourselves to try different foods, add flavor to the food and part of the holidays is enjoying the food. After the holidays, we tend to settle back into what our normal routine of foods are. If you think about Christmas and in particular the wise men bringing gifts, what type of gifts did they bring? Some of what they brought were flavors from other parts of the world.

In the middle ages, before Europeans discovered America, the known world for the average person in Europe was the Mediterranean Sea countries, different languages were spoken and depending on where you were born, you thought your language was the best. Depending on where you were born and how much money you and your family had accumulated, most of what you ate was local. There were practical aspects to the eating, if something is local, it tends to be less expensive. But if you were a little wealthier, it was possible to buy spices to make the meal more flavorful. But where did the spices come from?

If you lived in Italy, you likely would be a Catholic because at that time all of Europe was Catholic, it was much later before Christians broke into many direction of faith to what exists today. You would know that the wise men brought spices to Jesus but where did the wise men come from? Your map would not show you and because they came from outside the known world. The merchants who bought and sold the spices told stories which you tended to believe. Once you believed the stories, the reality really did not make a difference.

The reality was spices such as cinnamon came from a tree south of India or the island of Ceylon or what we now know as the island of Sri Lanka. The cinnamon tree also grows south of China. The process is the bark is removed, the inner bark is dried and cinnamon is the result. In the middle ages, traders sent the cinnamon to India then to the middle east up the Red sea and Nile River to Cario and then by ship to Venice where it was distributed across Europe. The merchants wanted to ensure the price remained high so they would tell stories how the plant was grown in Africa to ensure their supply and price was protected and lead people astray.

It was not until the Portuguese sent ships around Africa to India and then to the South China Sea that trade routes would be changed. The Portuguese were bringing back large quantities of spices and making lots of money. Making lots of money led to the other European countries including Netherlands and England sending their ships to the spice lands to make money. The desire to make money changed the politics in the South China Sea countries. The journey from England to the spice islands and back took 2 years which lead to Columbus sailing to the Americas looking for a short cut. Spain found gold and silver from Mexico and Peru and for a time that was more important than the spices.

Linking to dividend paying stocks, all companies have some sort of myth attached to them, why the founders decided to do what they did? why them as opposed to the competition? All companies love monopolies because they can raise prices and sell their products, but the myth is the competition from somewhere. Companies tell politicians they must protect them with regulations and it can make a great deal of sense to do so. Companies can grow and prosper and the myths will grow with them. When you buy a company which is profitable and can pay dividends, it tends to be in business for a number of years and the founding myths have grown up. Often the myths have some sort of truth attached to them, but as an investor you are concerned about the reality of the profit to pay the dividend.

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

In every market there are always glass half full and glass half empty situations and only in hindsight or looking back do we see what is reality. For example in the glass half empty situation, the virus Delta and Omicron is spiking, it doubles every few days which means the prudent thing to do from a public health perspective is shut things down and encourage vaccinations. The glass half full is many people have learned to shop on line and shopping drives the economy.

In an article by Echo Wang of Reuters, at the end of last year, a report released by Mastercard showed shopping increased 8.5% over the previous year’s holiday season. This means many people shopped and if they were working from home and technically saving money on the commute, they spent money on themselves and their families. According to Sylvia Jablonski Kampaktsis, chief investment officer of Defiance ETFs, personal consumption makes up to 70% of our GDP.

With Delta and Omicron racing through the world, airlines and cruise operators have a problem which caused about 1,000 flights to be cancelled and as much as a cruise is wonderful, would there be a problem getting off the cruise ship? If the answer is yes, then cruise ship stocks were down.

If you examine the overall market, the benchmark S&P is having its best 3 year performance since 1999.

Linking to dividend paying stocks, ideally when you buy a dividend stock portfolio the idea is you do not need to worry about trading on a daily basis, you can examine your portfolio weekly or bi-weekly or monthly whatever is best for you. The stock market similar to all markets will have signs of optimism and pessimism at the same time and it is up to you to determine what you are. If you are waiting on the sidelines, most of the time you will wait a long time and not participate. If you buy, it is helpful to have the overwhelming majority of stocks in profitable stocks that can pay dividends. If the market goes down, you will receive dividends. If the market goes up, capital gains are wonderful and that allows you to do portfolio allocation and continue to buy companies you have researched which helps to keep time on your side.

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

In every industry, there are different measurements and margins to produce profits. Most of us have little idea of the many aspects to industries, although in general we have an idea.

In an article by Koustav Samanta, the jet fuel refining margins in Asia are on track to double by the end of 2021 from the previous year, analysts and traders say. Although before you jump out of your seat in joy, there is a long way to go from the prepandemic levels.

Richard Gorwy, managing director at consultancy JBC Energy Asia said it will take for jet fuel demand to recover to 2019 levels. Maybe look at late 2024 or early 2025.

Every time the Delta or Omicron or something raises its head, airlines trim capacity which means they use less jet fuel. Airlines are also purchasing more fuel efficient planes.

Asia’s jet fuel margins have averaged $6.82 a barrel over Dubai crude, which is up more than 12% compared to the their 5 year seasonal average for December. In 2020 at the worst of the pandemic the margins were $3.02 a barrel.

The big event in 2022 is the Beijing’s Olympics which is expected to increase demand on fuel.

Linking to dividend paying stocks, in all industries we tend to know the general but with all industries there is a specific margins and commodities link to their end consumer. For example we all know about higher demand for passenger and business travel leads to higher demand for jet fuel. How that is determined, most of us do not know, but we can find out. Often analysts and when senior executives in a company outlined their expected performance they will reference data they are very familiar with. If you invest in a company it is a good thing to learn what analysts are looking at and for, to determine given your holding is better to hold or sell?

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