In the world of capitalism, the desire is to accumulate a large amount of assets and then many options are available for you. Everyone in the world knows how much money they need to live a comfortable lifestyle, there is likely another amount for a barebones lifestyle. For some who accumulate well more than the comfortable, there become other choices what to do with the money. In many families, foundations are set up to give away some of the money. When the amount is large, trusts are set up for the money to last for a long time and hopefully into generations. For those in the billionaire category, most people in the world have ideas of what they should do with the money.

In an article by Elon Musk, chief executive of Tesla is one of those billionaires and he has more money than he needs to be comfortable. He is worth upwards of $250 billion as he owns 23% of the shares of Tesla and it is worth a trillion dollars. His holdings is 170.5 million shares (with some stock options) his brother (Kimbal owns over 600,000 shares for $750 million and recently sold 88,000 shares. Kimbal is a Board member on Tesla).

Mr. Musk was considering selling 10% of his shares and asked people on Twitter what he should do and the vote is in 57.9% said yes to selling. Mr. Musk (unlike former President Trump believes the vote is illegitimate) says he accepts the outcome.

The 10% holding amounts to $21 billion, but Mr. Musk does not say what he will do with the money. He has suggest donating $6 billion to the United Nations food program to help solve world hunger, but we do not know.

Linking to dividend paying stocks, one of the reasons people buy the stocks is to have regular dividend income and overtime increased capital gains. This allows you to have options – to buy more stock, to donate the money, to have options. We know that many wealthy families have internal fights about money and lawyers receive generous fees, but we do not know when the threshold of too much comes into full contact force. As you accumulate stocks to generate dividend income have some idea of what you want to do with your money or do not want to do with your money. The last thing you likely want is family members fighting over income. Planning and wills are good.

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

When a government is in power and wants to take away regulations, what that means in the corporate suite is different to what it means to individuals. Often times, the government seems to talking to the small business owner about supplying less statistics to the government. What it tends to mean for the large businesses is to buy companies to minimize competition or perform similar to a regulated utility. A case in point in the publishing business.

In an article by Tali Arbel of the Associated Press, the US Justice Department is suing to block a $2.2 billion book publishing deal that would reshape the competition.

The story is German media giant Bertelsmann Penguin Random House wants to buy Simon & Schuster. The competition is HarperCollins, Hachette Book Group and Macmillan.

The players in the story include the Authors Guild who believe less competition will lower competition for author’s manuscripts. The other book companies who may be interested in either the whole or parts of Simon & Schuster including media company News Corp which owns HarperCollins.

The industry has been consolidating because the biggest bookseller is Amazon and they can dictate prices.

The CEO of the Author’s Guild noted during the past few years, the Department of Justice has done little to block mergers and acquisitions, however under President Biden has called for greater scrutiny of mergers and the DOJ is doing that.

Linking to dividend paying stocks, all companies have to work within the environment of the government of the day, sometimes it is easier to do, sometimes is takes more time, sometimes the company needs patience until the government changes. As an investor, you want your company to make profits, as an individual you might have different views what is good for the long term.

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

Oil and gas companies have played a major role in the world’s economies as our society developed methods to use and demand oil and gas. The biggest company was Standard Oil owned by John D Rockefeller which was broken up and became 7 large oil companies the biggest being Exxon. As time went on the oil producing countries formed their own companies and now the biggest oil and gas company is Saudi Aramco. The company was owned by the Saudi government but it decided to sell some to investors and now the Saudi Aramco trades on stock exchange.

In early November the company reported its 3rd quarter profit and in an article by Isabel Debre of the Associated Press, the company reported a profit of $30.4 in the 3rd quarter. When Exxon was losing money, Saudi Amamco made $11.8 billion, now that oil and gas prices are up, the profits continue to roll in.

Aramco chief executive Amin Nasser described the results as exceptional. His team is optimistic that energy demand will remain healthy for the foreseeable future.

In every commodity company as prices rise with demand, there is a desire to increase output, not to lower the prices but to capitalize on the higher prices. Saudi will increase production by 400,000 barrels a month to a total of 11.5 million for the year.

Linking to dividend paying stocks, in commodity companies as an investor you are looking for a low cost producer which can sell at market rates for a the commodity. Ideally the market rate is well above production and distribution costs so if the price fluctuates the company still makes a profit. Saudi’s production is less than $5 a barrel and sells for over $80 a barrel. As an investor, it is long term hold.

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

In the world of investing, if you invest in a commodity based company and the price of the commodity goes up, the revenues and profits go up, it is really that simple. The trick is determining when the price of the commodity will go up. In the case of oil companies, the price of oil fell during the first years of the pandemic, but once economic activity became to resume, the demand for oil drove up the price. If you had bought oil companies a year ago, then you would have done well.

An article from Reuters from the end of October, Exxon Mobil reported net income of $6.75 billion or $1.57 a share in the 3rd quarter, the highest since 2017. A year earlier, the company had reported a loss of $680 million or 15 cents a share. The reason oil and gas prices have doubled in the past year.

With the increase in profits, ExxonMobil will increase the stock buyback which has been suspended since 2016. The company was once the largest US corporate repurchaser of shares. (When a company repurchases shares, there are less shares and if earnings remain the same the earnings per share (EPS) is higher which if the company trades at the same multiple to earnings, the share price should increase)

Linking to dividend paying stocks, the large oil and gas companies have for decades have been some of the consistent profitable companies which pay dividends. It was hard not to own them, as the world transitions to using less energy the oil and gas have a role to play. It is a personal choice if you want to own them directly or indirectly but the results of the company can be easily seen by watching the price of a barrel of oil. If it stays steady or goes up, the higher revenues and profits means the dividends will flow into your account. Similar to all investments there are alternatives and if you do not wish to own the oil and gas directly, Microsoft overtook Exxon as the biggest dividend payer in the US.

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

Sometimes in life it seems everything is going well, then it does not. In the case of one of the top ranked consulting companies McKinsey. The company has been providing strategic directions to organizations around the world ever since the company was formed using the Harvard Business school case method as its basis. The business school at Harvard has the most respected MBA program and some of the people end up in consulting firms. It is often senior management of large organizations need advice and consultants from McKinsey will provide a good product.

In an article by Michael Forsythe and Walt Bogdanich of the New York Times News Service, consulting firms such as McKinsey are now facing internal concerns from employees and former employees who are the clients paying the bills. A consulting firm such as McKinsey can offer a wide range of solutions and paths for companies and those in the oil and gas field tend to generate large profits. McKinsey has consulted with firms such as BP, ExxonMobil, Gazprom and Saudi Aramco which has generated hundreds of millions of dollars in fees. (the same case is made with Boston Consulting Group)

Then the issue of climate change has come up and something is happening to the weather, McKinsey’s work did not focus on the environment but on cutting costs, boosting productivity and increasing profits.

McKinsey has been consulting to the fossil fuel companies for generations and those companies such as Mobil, Shell, Texaco, Standard Oil which became Exxon and a host of domestic and foreign oil, gas and coal companies. The consultants often moved to jobs within the industry.

Now McKinsey is suggesting it will be the largest private sector catalyst for decarbonization.

Linking to dividend paying stocks, sometimes what companies want and desire the need to cut costs, boost productivity and increase profits means that other items are discarded along the way. If a coal company want to be more productive that means it can mine more coal for less money, but that does not necessary help the environment. As times change, other priorities need to come to the forefront and still be able to generate profits to pay dividends.

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

In every market there is hype because you always need someone to buy something. There is hype in consumer marketing to ensure you buy before the good deals are gone and somehow we all know it, but we all look for a good deal. On the stock market there is plenty of hype and for the average investor if you can stay away from it, you will make money because the number one rule in investing is try not to lose money. Having said that when there are high than normal returns, it gets all types of people talking, writing and some actually believing in the hype. For the most part, hype is hype and next week or next month there is something else to be hyped. If you go for something that is hyped, ensure it is money you have that you are willing to lose because for the average person, they will buy and the stock will fall. Once it a while it is possible to buy and sell to the greater fool or believing investor (sometimes there is no difference).

In the case of former President Donald Trump as we all know he was banned from social media, although he still pretends he is President sending notices from the 45th President. In Washington sits the 46th President.

In an article by Krystal Hu and Anirban Sen of Reuters, Donald Trump has decided to have a new social media platform through an app from the SPAC company Digital World Acquisition Corp. The company went public through the SPAC process and has been in talks with Trump Media & Technology Group that would produce an app that has yet to be rolled out even on a trial basis. In other words, there maybe an app for Donald Trump on social media which is the hype.

SPAC shares come out at $10, but people reading or hearing about the app have bid up the shares to close to $200 or the company is valued at over $12 billion, because it involves the former President and ad revenues.

In the story it tells the story of 2 people, one who bought and sold 50% of his holdings then another 25% to hold shares and see. If they go down in value, he has taken his profits. Another person bought and hold because he loves the ex President.

Linking to dividend paying stocks, ideally dividend paying stocks do not rally to moon on hype, they rally because they make profits and can pay dividends. It is slower process but investors earn a return in the form of dividends and over time the capital gain from profitable stocks makes the stock worth holding. If you are going to get along with hype, ensure that it not your entire portfolio, hype is gambling and you need to ensure that when capital gains are made on the market from higher prices, capital gains are locked in and sold to ensure the money goes into your account. Capital gains come from selling, before that they are on paper only. We are human, we want the easy capital gain and once in a while it happens, but understand once the people doing the hype move onto the next time, the stock price will fall to what the revenues dictate the stock should be worth. A company which says it will have an app, but the app is not functioning does not have an revenues.

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

When former President Trump was in office, he often talked about manufacturing in America, but the reality is most of what America buys is made offshore. In recent weeks, we have all read or heard about supply lines conjestion.

In an article by Nathan Vanderklippe in the Globe outlines the issue.

40% of all goods coming by sea come through the Los Angeles area. The ports of LA and Long Beach are working 24/7 to clear a mountain of floating goods estimated to be worth $26 billion.

According to Kevin Mullaney, chief executive of Grayson Co, a retail conultancy, anything that touches land after November 1 will not see the floor for Christmas. (hopefully when you read this the backlog is normal).

Todd Spencer, president of the Owner-Operator Independent Drivers Association, representing over 150,000 truckers says the reality is the demand for imported goods that arrives via ship is greater than our ability to handle or process those loads.

Imports to the US have reached record levels, it was $287 billion in August, the last month for which there is data.

In LA and Long Beach, containers that in 2019 spent 2 and half days on average are now waiting for more than 5.

Containers are now waiting 9 days on a truck after leaving port. The industry believes the standard should be 1 to 3 days.

If a ship goes to another port such as Savannah, Georgia, Houston, New Jersey and New York – all of them have set new records for container movement.

Linking to dividend paying stocks, politicians say something but it is often different in reality. Companies deal in reality and in reality manufacturing is primarily done offshore, retail is handled on shore or on line. Every company has a logistical chain and when it works, all is good. When it does not, one wonders if enough resources were put into the logistics chain. How does your investment in company handle their logistics?

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

It seems that all large companies have decided global warming is a threat to their businesses and want to do something about the issue. Change costs money and resources, but sometimes companies need to change,

In an article by Jonathan Saul of Reuters, Boston Consulting Group estimates that the global shipping industry will need $2.4 trillion in investments to achieve net zero emissions by 2050.

Amazon and IKEA are among commercial users of container shipping that will opt for zero carbon marine fuels by 2040 in a new initiative aimed at speeding up decarbonization in the maritime sector.

90% of world trade is transported by sea, global shipping accounts for nearly 3% of the world’s CO2 emissions and the sector is under going scrutiny to become cleaner.

Linking to dividend paying stocks, companies that make profits have the ability to lead or make changes and still make profits to pay dividends. It is a balancing act but if governments and customers wish it to happen, companies have limited choice by to try. When the next AGM comes along, it is good to know what your company is doing and then it will not be not negatively affected by investment decisions on greener companies.

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

If you think about the space race, the US and the USSR were trying to show the world they were the most advanced societies and the USSR put a satellite into space. The movies show the US military worried the USSR were listening to them. The USSR put the first man into space, but the US went to the moon, a number of times. Since those days, satellites have been used a regular tool by companies and governments. For the big telecommunications companies, you expect them to be using satellites to ensure your cell phone works, where ever you are.

If you think about the phrase they are listening to us, they maybe, but they are definitely watching us. Somewhere some satellite is watching you, although for the most part no one is very interested. What there is more of, is watching whatever the governments of the day are concerned about.

In a recent Wall Street Journal article by Timothy Puko, the European Space Agency has many satellites and some of they track environmental concerns. The European Space Agency released photographs of unreported leaks of methane gas from a Russian pipeline.

On one hand this is good news, one hopes the Russians fix the problem considering the President announced Russia will be carbon neutral by 2060 (or his last term in office). The photographs also tell you someone is watching or has the ability to watch over any landscape in the world.

Linking to dividend paying stocks, some of the best paying dividend stocks are pipelines. As investors you expect very few leaks for that is wasting money that could be going into your pocket. It also means, when there are problems companies have to show how they are fixing the problems and not try to hide the effects. There are fewer secrets so how does the company react to problems is the key. If they do their best to fix and learn, you can hold the stock. If they try to minimize, perhaps it is best to look for alternatives.

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