Almost no one wishes bad things or disasters to hit any area, but it is a natural happenings. The first thing you should be worried or concerned about is the people and then you can learn something about the economy of the community.

At the end of August, hurricane Ida came ashore in Louisiana, stalled for 6 hours and moved up to the northeast where it caused extensive flooding. However, in the aftermath information can be learnt about the economy where the Hurricane went through. For generations, the economy of New Orleans has been based on the Mississippi River and the goods which flow up and down the river. The city is a tourist and convention destination and many hope it recovers. The last time there was a big hurricane, the NFL football team went to the Super Bowl (as a fan here is to hoping).

In an article by Martin Curtsinger of the Associated Press, north of New Orleans and to the south into the Gulf of Mexico lies oil and gas ocean platforms for the region has 13% of the US total refining capacity. (another big area of refinery capacity is south of Houston which was not affected). In the Gulf of Mexico, during the storm 96% of oil production and 94% of natural gas production was shut down according to the Department of Energy.

A number of years ago, Hurricane Kartina caused more damage than Ida only because the levee system which keeps the water out of New Orleans broke and besides wind damage there was water damage. For the insurance industry which is in the business of measuring risks and paying out damages, they were expecting to pay$10 billion rather than the $90 billion that Katrina caused. For the average person, President Biden declared the area a natural disaster area prior to the Hurricane which allows federal funds and people to help the states (one of the good things which came out of Katrina).

With every hurricane, the power goes down because the wind blows the poles down and people have to put them back up which takes time. The good news is power to the big refineries was not expected to be out for too long (just enough to send gas prices up for the Labor Day weekend).

Linking to dividend paying stocks, when you invest in a profitable company part of your homework was to determine how they function and before and after disasters. We all know some will happen, we do not know when and how serious. If your company can bounce back, then it likely means during the non disasters it is well managed. Nobody wants a disaster, but as investors you can learn from them.

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

A little while ago, Elon Musk of Tesla fame announced his company was working on a robot and it similar to the crash test dummies which automobile companies use to test how people would react when a crash happens. The story was good for a the news cycle, but the reality is more and more robots are working in factories and they do not look like a crash test dummy.

In an article by Jane Lahnee Lee of Reuters, the next stage in robot production has arrived. The large manufacturers were the big adopters of robotics because they have both the money and need. (there is You Tube video on how a F-150 is made, the robots are interesting). The next stage is for the small and medium sized manufacturing companies to have robots. The small and medium sized companies could not afford the high upfront costs and the ability to have people both work and service the robots. Similar to all processes things change which makes it easier.

The new model is coming and being adopted, lease robots, charge factories by the hour or month, cut the risk and initial costs. (think about the companies which offer to rent to own a large screen TV or other household stuff).

If you think about a small or medium size manufacturing facility there were multiple reasons why a robot was not installed including up front costs, smaller production runs, few long term contracts, existing job skills, to to encourage college graduates to work at the smaller company and the list goes on. The good news is the Association for Manufacturing Technology in San Francisco is bringing manufacturers and technology together to find solutions to the small and medium sized business.

One of the companies in the lease robot is called Formic Technologies – an example is Polar Hardware Manufacturing in Chicago is a metal stamping plant. Formic’s pitch was to pay less than $10 a hour for a robot compared to $20 a hour for a person. The robot is working well according to Bob Albert.

Another company Westec Plastics Corp which is a plastic moulding factory in Livermore, California. It has 3 robots from Rapid Robotics which costs $3,750 a month per robot the first year and $2,100 in the second year. One of the robots works 24 hours a day which has replaced 3 full time operators or saving more than $60,000 a year in labor costs. Tammy Barras of the company is pleased with the robots, but do not expect the robots to replace all the 102 employees, but they help.

Linking to dividend paying companies, business model work and many times they are successful until things change, which suggest asking what the business model is is important to know in your investments. In the cases above, robots have been around for years but at what cost to buy and operate, as those costs come down the model changes, does the company?

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

If you are in Los Angeles and want a roast beef sandwich to Arby’s drive-thru you would be talking to Tori, an artificially intelligent (AI) voice assistant that will take your order and send it to the line cooks. The franchise owner Amir Siddiqi says Tori is reliable, shows up everyday and it working well.

In an article by Matt O’Brien and Paul Wiseman of the Associated Press, COVID has given businesses many problems dealing with people and some of the solutions are linked to using AI and robotics.

The US used to have many jobs in manufacturing and some of them have gone offshore, however the service economy jobs offset the losses. In the manufacturing world there is a great deal of repetition which robots have shown to be able to handle, but the service business there is the perception that the human connection was important.

According to economist Johannes Moenius at the University of Redlands noted the improvements in robot technology allow machines to do many tasks that previously required people – tossing pizza dough, transporting hospital linens, inspecting gauges, sorting goods.

According to the World Economic Forum, 43% of companies planned to reduce their work forces as a result of new technology. Since the 2nd quarter of 2020, business investment in equipment has grown 26% more than twice as fast as the overall economy.

The fastest growth is expected in the roving machines that clean the floors of supermarkets, hospitals and warehouses according to the International Federation of Robotics, a trade group. The same group expects an uptick in sales of robots that provide shoppers with information or deliver room service orders in hotels.

Linking to dividend paying stocks, AI and robotics will play an increasing role in the workplace, how is your company handling it. In theory there are transitions to reduce middle management and training for people to manage the robots. What else is your company doing or working on?

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

When you look to Europe, the countries make up an smaller geographic landmass than the US which means people do not see the wide open spaces. If many parts of the US it seems there are wide open spaces, trees as far as the eye can see and a land still need developing. In Europe there is less which means when something happens different in climate, people have fewer abilities to consider locating. We have seen hot weather in France, snow storms in England, floods in Germany and people know that weather is changing and not in a good way. One of the many solutions is to try to invest your money in companies that are providing solutions to the climate changes.

In an article by Tommy Wilkes of Reuters, one of the many responses is to identify which companies are green or along the way for Environmental, Social and Governance (ESG) models. Investment managers have read the tea leaves and many funds are offered and being sold which purport to be in the European Union’s Sustainable Finance Disclosure Regulation (SFDR) specifically Article 8. The article reads the fund promotes other characteristics, environmental or social characteristics or a combination of those characteristics.

Fund managers have examined SFDR and as long as the company adopts a policy or is seemingly taking action, then under their eyes the company fits into the the regulation. Given that just about every public company in Europe has adopted policies to mitigate climate change, fund managers have taken allowed the biggest companies in the natural resources to be in their funds.

Reuters asked 20 of the biggest fund houses for a list of products they market as Article 8 or 9. The result was companies ranged from climate-themed green to very, very light green. Hortense Bloy, director of sustainability research at Morningside said Investors should not expect anything from Article 8 regulations.

Two of Europe’s biggest firms, Alliance Bernstein and AXA Investment Management classify 90% of the funds they manage as Article 8 or 9 compliant. Blackrock, the world’s largest asset manager is expect to have 70% of its funds as compliant.

Linking to dividend paying stocks, companies examined government regulations to stay on the correct side of them, how much depends on the company. There are companies that are very good in their operations to whatever concern you have and others who just want to make money. When you invest you make choices, hopefully besides making profits and paying dividends you want your company to be what your consider to be a good corporate entity.

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

Most of us by nature or our outlook are a glass half full type of people and when we invest we tend to think about growth of the company, can it continue to make profits and pay dividends and that is a good. However in all investing there are people who are only in for the money that will flow directly to their pockets and everyone else be dammed. These people have the ability to jump on the latest trend and make a compelling story which sounds true. An easy example is climate change is coming and companies have to do something to reduce their carbon footprint, what we do not know but firms will be pitching all types of solutions, some of them are frauds.

In the public stock markets, one requirement is information must be released on a regularly basis of how the company is doing and how does it make its money. Because the information is public, there are numerous people trying to determine is it true or reflect reality or is it made up? Investors like to think that because reputable firms are behind the work, the numbers reflect reality, but it does not always happen.

In an article by Matthew Goldstein and Kate Kelly of the New York Times News Service, the writers profiled Nathan Anderson’s firm called Hindenburg Research. The firm analyzes hundreds of public companies to see what they are doing and write reports if they believe the numbers are fraud or very suspect. At the same time the firm establishes a short position in the company and if enough people believe, the share price will fall and the company makes money because the truth came out.

Nathan Anderson of Hindenburg Research, Carson Block Muddy Waters and Andrew Left of Citron Research are three of the leading names you might see in the media and their companies and all of them had various success. Hindenburg Research highest profile is the fraud at Nikola Motors. The former President Trevor Milton was charged with securities fraud. The company has been restructured and may produce an electric vehicle for production as opposed to Mr. Milton’s lifestyle.

Mr. Anderson said in the world of SPAC deals, there is a lot of fraud, but it is important to remember the basic lesson from starting a small business (revenues – expenses = profits). It is easy to have expenses, it harder to have revenues which cover expenses without raising more money to pay for expenses. Remember how does the company make money? is it making money? When you are examining companies with the latest trends try to be a half empty type of person.

Linking to dividend paying stocks, one of the rules in investing is try not to lose money. One method to do this is buy profitable companies which can pay a dividend, as long as the dividend is being paid, you have little to do but look leisurely for alternatives.

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

Hopefully this summer, you were able to see and possibly go boating on a lake or ocean. If you live near the ocean, there is fish in the sea. People from time started have gone to the lake or the sea to catch fish and sell it. Fish are generally good for you and many years ago, one of the Popes said to Catholics (at the time Catholic meant any person who believed in Christianity) to eat fish on Friday. This created demand for fish all over Europe.

If you watch movies. George Clooney, Mark Wahlberg made a movie called The Perfect Storm based on a novel by Sebastian Junger published by HarperTorch, NY, 1997. The movie and paperback novel came out in 2000. It is a good movie. In the novel, the descriptions of the way of life of fishing are equally as compelling as the feel of the boat and waves in the movie.

In the novel, 12 years after Columbus discovered North and South America for the Europeans, the area of the Grand Banks were discovered full of cod. The Grand Banks are at a point where warm water from the south and cold water from the north meet and the plankton grows. The food small fish eat is plentiful which attracts bigger fish which attracts even bigger fish. A few years after being discovered, there were so many Portuguese ships on the Grand Banks, the King of Portugal imposed an import tax in order to protect the fisherman at home.

For a long time, it was easier to catch the fish, salt them on the boat and return back to Europe, no need to land on the rocky shores of North America. In 1523 a ship was financed by the Dorchester Company, a group of British investors from London who wanted to tap the riches of the New World. Some ventures are successful, some are not as commodity prices or fish prices declined. Eventually people did land on the new world and fish communities grew up including in Gloucester, Massachusetts.

For a long time, fisherman used to go the the Grand Banks and find plenty of fish and it was entirely possible to make a reasonable living fishing. If you owned the boats, fishing was a good industry to be it. Then something changed, there was fewer fish or the fish being caught were smaller or less profitable. What had changed? Technology had changed. The quick freeze technology was applied to fishing and boats became larger and were essentially factories at sea. The bigger boats had bigger nets to catch more fish and depleted the stock faster.

For fishermen, they had to change the way they fished and go further out to sea and be more vulnerable to the the weather changes including storms.

Linking to dividend paying stocks, in some industries it is easier to see technology change the business. In fishing, first it was easier to go be to Europe, then it was easier to open up plants to sell the packaged fish to Europe and as the market became larger to the US. Technology of quick freezing took more fish out, without worry about the number of fish in the sea (it is a big sea, but fish do not go everywhere). When the commodity is harder to find, the risks to find the commodity are greater, which is the reason why we have fish farms. The risk reward system has been part of the season for generations and will continue to be.

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

Each of us has a moral compass which we go about on daily, weekly, monthly and yearly basis and that is a good thing. Each of us knows what is right and wrong, but in the grey area when increasing large amounts of money are involved, what is the right thing to do? There is no easy answer and those with access to funds and those without tend to have slightly different answers. (one can see that with proposals on wealth tax).

In an article by Geoff Mulvihill of the Associated Press, the lead lawyer for Purdue Pharma Marshall Huebner said to the judge, accept what is on the table, it is reasonable or fair or be prepared to face decades of law suits which could last decades before any money is paid to victims.

If you experience deep pain in any part of your body on a daily basis you would want to take something to dull the pain, that is a normal reaction by people. Purdue Pharma produced a pill which helped with the lessening of the pain, but over the years changed the formula to make it more addictive. Once you were on it, it was very hard to come off and many people have died because of the addiction.

Purdue Pharma has admitted fault and in a proposed settlement, the family would contribute $4.5 billion in cash and control of a charitable fund. They would lose their ownership in the company and the new company would be formed to ensure profits helped the victims and fight the epidemic. Much of the funds would go into treatment centers or things over departments of health have to pay for.

In the lawsuit, there are many defendants and some states have agreed, but others want a scorched settlement on the family, to bring the family down from billionaire status to less than millionaires. The problem is the family still having the money they can stretch the litigation for years and stay wealthy.

Linking to dividend paying stocks, one of the great advantages of the companies is they have access to great resources to go after the competition, to ensure lobbyists ensure government and regulations do not change too much to make the company less profitable and a host of other elements. As an investor you like this, if you did not like the company for a reason, it is hard to fight a giant, not impossible, but hard. (remember the story of David and Goliath – it is possible). As an investor, you tend not to worry about those that do not like the company for one reason or another, as long as from your moral compass the company is doing good.

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

When COVID happened and companies around the world had to shut down because of health concerns, one of the prudent things which happened is companies began to conserve their cash or cut both dividends and buybacks. Many companies managed to come through COVID doing very well, there are some which still struggle but for a company which could operate there were some cost savings but having the workplace work from home – particularly on the travel and leisure expenses.

In an article by Stefano Rebaudo of Reuters, global money manager Janus Henderson released a report which forecasted global dividends to rise to $1.39 trillion this year, up slightly from a previous estimate because of the stronger recovery in the company payouts.

The increase would be up 2.2% at just 3% below prepandemic levels.

Underlying growth – adjusted for special dividends, changes in currency, timing effects and index changes was 11.2%. On a year to year basis, 2021 growth is expected to be 10.7%.

Dividends from companies restarting payments totaled $33.3 billion and accounted for 75% of the growth in the second quarter. The majority of these payments was more the financial sector which regulators had limited dividend payouts.

Booming commodity prices helped miners, with industrials and consumer discretionary coming back strongly.

Defensive sectors such as telecoms, food, food retail, household products, tobacco and pharmaceuticals registered characteristic low single digit growth rates.

Linking to dividend paying stocks, the reason you buy these types of companies is for the dividend and making compound interest work for you . With the dividends and continuing profits over the long run you wealth should increase and that is a good thing.

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

Every country which has a commodity that can be sold to the world looks to sell it the world, however in the world of geopolitics, not every country is going to be in good standing or in favor with the biggest economies of the world.

In an article by Bozogmehr Shafafedin and Julia Payne of Reuters, in the case of Iran it has the 4th largest reserve of oil and gas in the world, but the US has imposed sanctions on it. Oil and gas are being sold, often through third and fourth suppliers but China and Japan are buying Iranian oil. Iran had been suppling parts of Afghanistan with oil and gas, but with the recent changes in administration, it was shut down for fears of safety.

Iran has resumed fuel exports to Afghanistan through Iran Oil, Gas and Petrochemical Products Exporters’ Union The Taliban sent messages to Iranian traders and an Iranian Chamber of Commerce which has close links to the government. The government agency Islamic Republic of Iran Customs Administration (IRICA) has taken off the ban of selling the oil.

Iran has been selling oil to Afghanistan before the administration to the tune of $367 million of imports, mostly fuel between March 2020 and March 2021. The next two important suppliers are Turkmenistan and Uzbekistan with trade of oil valued at $257 million and $236 million respectively.

Trade between Iran and Afghanistan is expected to increase, because of the sanctions it was limited in public visibility and now with the change it should be more open.

Linking to dividend paying stocks, all companies want to deal with consumers who are buyers of their services and products, sometimes governments for reasons will want to limit markets until something better happens between the 2 countries. If the consumers demand the products, sometimes where there is a will, there is a way. How does your investments deal with global political concerns?

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