In every commodity there is different methods to transport the commodity from the place where the commodity is found to the markets which can use the commodity. There will and always be conflicts with different governments on which method to move the commodity.

If you think about the country of Russia, it is one of the biggest producers of oil and natural gas in the world, which essentially means you could classify the country as a Petrocurrency – as the price of oil and natural gas so does the economy. The least expensive way to move natural gas is through a pipeline. The use of pipelines the world over has a long history and it is reasonably safe. However pipelines must go through multiple country lines from the producer to the consumer.

In the country of Russia, the government of Russia once turned off the taps of the pipeline to another country for geopolitical purposes. Since then every country which deals with Russia knows this, but they have lots of supply of oil and gas and it is good for countries to de dependent of more than one source of supply. The other big supplies of oil and gas comes from the Middle East including Saudi Arabia.

In an article by Andreas Rinke and Pavel Polityuk of Reuters, the head of Germany, Chancellor Angela Merkel prior to leaving office made a trip to Russia and the Ukraine. The country of Ukraine was once part of the USSR and in 2014, Russia took over a piece of the Ukraine called the Crimea. Russia wants to build a pipeline through the Crimea into Germany called Nord Stream 2. They have a pipeline going through the Ukraine but want a second one so they are not dependent on being good neighbors to the Ukraine. Chancellor Merkel was in the Ukraine to say even when the pipeline is built, Germany will be a valued partner with Ukraine.

Linking to dividend paying stocks, in many cases a relatively simple commercial transaction has implications of local and even global politics. The company just wishes to deliver a commodity to consumers and that is what they are focused on, however politics can be intertwined with the commercial transaction. Companies with a long track record have dealt with the issue before and came out ahead, as a shareholder that is what you want to hear. Remember politicians change and sometimes the issue changes, companies even though they report their results quarterly do have the limited luxury of time on their side if profits can be seen at the end of the deal.

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

In politics it is not unusual to parties to change which means some policies automatically change. Many do not, but some do.

In an article by Mark Thiessen and Becky Bohrer of the Associated Press reported a federal judge threw out Trump administration approvals for a large planned oil project on Alaska’s North Slope. The 110 page ruling noted the federal review was flawed and did not include a multiple of mitigation measures.

The former administration believed in domestic oil production at all cost and it is well known there is oil in Alaska, although some of it is underneath protected lands. Late in the administration, the approvals were coming fast and furious for all projects in the hope some would stick, but some were flawed.

The project could produce up to 160,000 barrels of oil a day with about 590 million barrels over 30 years. More than 1,000 jobs during peak construction and 400 jobs during the operations.

The environmental groups were pleased with the ruling.

Linking to dividend paying stocks, governments can change and some policies will change when governments do, but profitable companies have consistently shown they can roll with each administration. There are good things and not so good things about any government and companies need to work with the government. Companies hire lobbyists to ensure the change is at least beneficial to the company. Sometimes the administration will do anything to help and sometimes the administration puts up roadblocks, but it is up to the company to work with the government. Does your company investments?

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

A few years ago, politicians and business leaders could get away from discussions about climate change, but times have changed and everyone has noticed climate has changed. Whether we change enough so climate changes back to what was normal is a different part of the equation, however everyone and every business has to do their part.

In an article by Brenna Hughes Neghaiwi of Reuters, the Swiss government passed a timeline that companies have to disclose the risks they face from climate change. Companies will need to disclose the actual and potential impacts on their business.

In June, France became the first country to make the rules binding as it set targets that will require investors to declare how green their assets are and set greenhouse emissions goals every 5 years from 2021 onward.

Britain has proposed British companies meet the Task Force on Climate-related Financial Disclosures (TCFD) in 2022. (shortly after the November UN climate conference in Glasgow, Scotland).

Switzerland says it rules will apply to both financial actors as well as to public companies with more than 500 employees or more than $27.6 million in Total Assets or $55 million in turnover.

Linking to dividend paying stocks, climate change is something which is happening and to combat it, public companies need to have an green program. The rules may help more consultants prepare the plans and lawyers to ensure the plan is effective, but companies that sell products around the world need to be doing something good on climate change. If they do, the shares will trade at a premium; if they do not expect the price to be a little lower. In addition, expect climate change interest groups to file briefs with regulators which the companies have to respond to.

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

Prior to the pandemic there were millions of people who commuted to work and they accepted it as normal. The commute was part of normal life. When COVID happened and public health was the most important aspect of society, the vast majority of commuters stopped commuting and stayed at home to do something including work. After a few weeks which turned into a longer period of time, vast numbers of people said I would like to change my home settings and with the money they normally spent on commuting, they started renovating. This lead to increased sales as home improvement chains and the better companies benefitted greatly.

In an article by Uday Samptah Kumar of Reuters, Home Depot said same day stores sales estimates for the first time in 2 years fell. The sales were very good, but they fell 5% from the year before.

Home Depot’s strength is the contracting market, not the Do It Yourself or DIY market, but other chains need this group for growth. As long as the housing market is doing well, Home Depot will continue to do well.

Home Depot chief financial officer Richard McPhail told Reuters that sales in the first 2 weeks of August were comparable to the second quarter, but they were not seeing any affects from the Delta virus.

Many companies want to bring employees back to the offices for a wide variety of reasons in the fall which means home renovations would likely slow anyways or the business model needs to change.

Linking to dividend paying stocks, all companies have to adapt to change, the best ones can execute when circumstances change. There usually is good reason why good companies can easily change, the issue is when the change does not come easily or they do not pivot as well as they used to, watch for the signs.

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

Years ago the local newspaper used to run longest serving businesses in the area, partly for economic development (what types of business have long years of service) but also to thank them for most of them would have placed ads in the newspaper at one time or another. The longer a business is in place, the more attached it becomes to the community and the community comes attached to it, this is a normal range of emotions and is expected. The demise of one of the entities gives you mixed emotions – perhaps it was bought by another company and it is rationalizing its businesses; perhaps the market had changed and the company did not make the money it used to and the list goes on.

In an article written by Gaia Pianigiani and Jack Ewing of the New York Times News Service, in the banking world, banking was invented by the Italians and at present the world’s oldest bank is Banca Monte dei Paschi di Siena. The bank was founded in 1472 during the Renaissance period. The central Italian bank goes by the name of Monte die Paschi and its name will likely live on bank branches, but the head office and control is going elsewhere. In 2008, the bank wanted to be among the largest banks in Italy and (likely with the approval of the Italian government) bought a competitor to become number 3 after Intesa Sanpaolo and UniCredit. The merger did not create greater profits but losses and there has been a number reorganizations, but none has worked as the Italian economy is not so good.

The bank is not on life support, but now days Central Banks and the European Central Bank ran a stress test on the bank if a recession happened, what would happen to the bank’s capital? The result was if a severe recession happened the bank’s capital would be close to zero. The bank would need E 2.5 billion or E 2.9 billion in fresh capital to survive. Therefore the solution is to merge the bank with another one and the Milan based UniCredit is the the preferred choice. If that happens and it likely will, the oldest bank in Europe will be Berenberg Bank of Hamburg, Germany founded in 1590.

The headquarters of the bank has 5,000 people and many of them would lose their jobs or need to take ones in Milan, not Siena. The bank has traditionally been a significant part of the community its community foundation supports multi community activities which is a reason why many people in the area bank with the Monte dei Paschi.

Linking to dividend paying stocks, as an investor you buy a stock because it is profitable and pays the dividend and over the years of collecting dividends and the value of the shares going up, you have an attachment to it. Ideally you can hold onto the company for years and that is a good thing because your total investment return over the years has increased. However all companies go through growth and decline and it is very hard to sell the shares for the decline, wait and then buy back when it is doing well again. Having said that even if you own the company for years, you should always be looking for alternatives even if you do nothing, so if dividends are threatened to be cut you can deploy your capital elsewhere.

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

Hopefully, during the summer you have been able to spend time outside and enjoy the sunshine. The sunshine is also a hope for the future as more and more solar panels are being put on buildings and homes to generate electricity.

In an article by Nichola Groom of Reuters, the Department of Energy projects that solar could supply more than 40% of America’s electricity by 2035 up from 3% at present if Congress adopts policies to make solar more widely used. If the projections happen jobs will be created because it takes people to make and install the panels and connect them to the grid.

With solar, the goal of anyone putting up panels is to compete against the other sources of fuel to generate electricity and over the past 10 years the cost of solar has steadily decreased to be competitive. In states such as California, one of the regulations is for new homes to have solar panels. That can be repeated across the other states as well as companies are installing solar panels to decrease their energy costs. In addition, there are the big solar farms across the sunbelt and with climate change causing warmer weather, the solar panel works well in the northern states.

Linking to dividend paying stocks, one of the best dividend paying stock to own is utilities because they have a semi monopoly which means everyone has to pay into the local utility, there are options but few options. The utilities generate electricity and have changed from coal to oil to natural gas to solar to whatever is the best option for them. With President Biden pushing solar, it means more panels to generate electricity onto the grid and less use of oil and natural gas, but there is still a need. What companies to own is your homework.

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

We all have to shop and and shopping is good for us and the economy particularly in a service based economy. This means many jobs are connected to the shopping experience and if enough people in the economy shop, all is good. Where they shop and how they shop are different stories.

In an article by Karen Weise and Michael Corkery of The New York Times News Service, Amazon is now the biggest retailer outside China. In the past 12 months ending in June, people around the Globe spent $610 billion at Amazon according to the financial research firm FactSet. Walmart was second at $566 billion. If China is included the top retailer is Alibaba Group.

Over the past century the top retailer in the world has changed and you or your family may have shopped at the locations. In the 1940’s the grocery retailer A&P had the government pursing antitrust measures, then after the war and the growth of the suburbs came a new retailer Sears.

Then came Walmart. The home of low prices is also the home of the best logistics company in the world. Sam Walton true innovation was building a vast logistics network that operated and operates with such precision and efficiency that it crushed many competitors. The model works very very well when people have to go into a store and buy things. Walmart’s automatic ordering system ensures the shares are not out of a product.

In the e-commerce world, Amazon is a winner and Amazon captures 41 cents of every dollar spent online in the US, Walmart takes in 7 cents according to eMarketer. Amazon’s model includes the massive distribution system which works for on line customers and equally important, Amazon lists 3rd party sellers list their products beside Amazon. Almost 2 million sellers offer products and they account for 56% of the Amazon’s sales.

The marketplace makes it harder to determine Amazon’s true influence on the retail industry. Amazon captures and reports only the fees it charges sellers to list, ship and market their goods, not the total money that flows through its business. The model is more profitable, but produces less revenue.

In terms of employees Walmart has 1.6 million workers while Amazon has 1.3 workers.

Linking to dividend paying stocks, as an investor you hope and expect the company you invest in will be successful for a long time and along the way the stock price rises and dividends are paid to you. The reality is over time, different models work better at different times. As you review your investments understand how the business model is working and will continue to work for customers and most importantly you.

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

If you think about basic commodities to power the infrastructure system, the company which stands a top is an Australian company called BHP, it is is the world’s biggest miner. The company mines iron ore, nickel, potash and oil. The world is trying to cut its fossil fuel footprint, what should the company do?

In an article by Sonali Paul and Melanie Burton of Reuters, a decision has been reached and it was announced in mid August. The petroleum division will be taken over by Woodside Petroleum for shares in the company.

Analysts value BHP’s petroleum business made of assets in Australia, Gulf of Mexico, Trinidad and Algeria at between $10 and $17 billion contributing 5% of BHP’s underlying earnings of $14.7 billion in the first half of the year compared to 70% coming from iron ore.

Linking to dividend paying stocks, we are in a change in the world and investors when as long as you made profits to pay shareholders, all was good. There is a shift to make money and do something to reduce global warming. Petroleum is a relatively easy business to analyze as long as it costs less to drill than to sell, the oil is essentially a cash cow and makes it easy to distribute money to shareholders. It is similar to what Warren Buffet said about cigarettes – it costs pennies to make it and sell it for dollars, why would you not want to own shares in the business. As dividend investors, it was difficult not to own shares in the oil industry because they have been some of the biggest dividend payers over the past century, however times can change.

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

President Biden proposed a billion dollar infrastructure bill and the Senate approved, which raises the questions which companies should benefit from the money flowing into the countryside. If a gift horse looks you into the mouth where should you do?

In an article by David Randall of Reuters, he asked a number of investment managers what were they buying?

If you like index funds, start with the S&P 500 materials and industrial sector indexes.

Scott Helfstein, head of thematic investing at ProShares said his firm has been buying real estate trusts focusing on ports and cellphone towers such as Crown Castle International.

John Mowrey, chief investment officer at NFJ Investment Group has been adding to companies such as Norfolk Southern Corp or the railways.

The ishares US Infrastructure Exchange Traded Fund has seen positive inflows for 5 of the past 6 weeks is poplar.

Barry James of James Advantage Funds has been adding to FedEx and Amazon in the hope improvement in bridges will improve delivery times for items that travel by the highway.

Linking to dividend paying stocks, the infrastructure fund of $1 trillion is a lot of money, but it is not likely to a game changer, but it will definitely will help which is the reason you consider the alternatives. If the government is giving away money, your company should be benefiting.

There are more questions than answers – to raising questions.