We all hear that we live in a global environment and diversification is not the next state or the other side of the country, but globally because customers can and do buy. Companies such as Amazon make it possible to buy from around the globe and when it works everyone says that is great. When it does not, it the case of a war, then the issue is how much exposure or risk does the business have in the countries at war? The day before the war, people thought the company was doing good at diversification, the day of the war and the days afterwards how could you do business in the countries at war? The reality is all countries produce income and people can buy stuff, why would you not be in the countries?

The biggest banks of the world are in New York and given credit is the lifeblood of every economy, the question analysts’ have is what is the exposure to the Ukraine and Russia? In an article by Elizabeth Dilts Marshall of Reuters, the answer is it is an unknown? The exposure by the US banks is $14.7 billion which is low compared to the banks in Italy, France and Austria which has more than $42.5 billion in exposure.

Citibank says its total exposure is $10 billion, which was higher than expected. The new number took into cash held at the Bank of Russia and other financial institutions, revers repos and additional exposures to Russia counterparties.

JPMorgan analyst Kian Abouhosssein said transparency on exposure by banks to Russia is low. Most banks do not give net exposures. He wrote in a research report, the US banks’ derivatives exposure risk and the impact that sanctions could have on their wholesale payments business is unknown.

Citi, JPMorgan and State Street likely have higher risks owning to their large global revenue exposure.

Linking to dividend paying stocks, diversification is a wonderful thing, the theory being when one industry group is up, another one may be down and vice versa, you need to stabilize your returns. On Wall Street, the street often decides that one sector is not going to be growing as much as return to safety of profitable companies paying a dividend are good. It is the reason why you own them, every once in a while, Wall Street says you can make more money buying a profitable company than buying one only on possible growth. Try to have the best of both world with the best profitable companies who increase their dividends.

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

If you think about opioid pandemic, you might think about the Sackler family and their company Purdue Pharma and you would be partly correct about who is to blame. The reality is there are multiple players who should have known or done something because Purdue Pharma was the manufacturer of the drugs, the next step is the distributors to the pharmacies around the country and then prescriptions written by doctors. In many situations there are many players and that is why it is complicated to pin down blame and hold someone accountable.

In an article from the Associated Press, Johnson & Johnson or J & J, Amerisource-Bergen, Cardinal Health and McKesson finalized countrywide settlements over their role in the opioid addiction crisis. The settlement is money or $26 billion and will flow to states beginning in April. The companies were waiting for getting participation from a critical mass of state and local governments, for example California will receive $86 for programs. The states that are not included are Alabama, New Hampshire, Oklahoma, Washington and West Virginia they are working on their own deals.

Linking to dividend paying stocks, with settlements in the billions and the companies seeming not missing any financial steps or reporting one time earnings decline, the opioid crisis for a long time was a very profitable business for the drug companies. However, since all the companies had to pay it shows that times can change and companies are seemingly accountable for their actions. While there always is a great desire to make profits to pay dividends, breaking the law is never good.

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

If you wish to buy stock in a company that is in the natural resources business, always determine the company’s biggest commodity and the outlook for that commodity. If the outlook is good, growing then you can be happy about making a good decision. If the outlook for the commodity is indifferent, then wait because the profits of the company depend on the commodity price.

In an article by Praveen Menon of Reuters, the world’s biggest miner of iron ore and other minerals, the Anglo-Australian miner Rio Tinto reported its best ever annual profit and a record full year dividend of $16.8 billion boosted by higher iron ore prices and strong demand from top consumer China.

CEO Jakob Stausholm noted the balance sheet is the strongest it has been for 15 years. Rio Tinto declared a special dividend of 62 cents a share and a final dividend of $4.17 a share. A year ago, the dividend was $3.09 a share.

China which accounts for more than half of Rio’s revenue said it would prevent excessive hoarding of iron ore.

Linking to dividend paying stocks, commodity based stocks are wonderful when the price is high, but similar to most things in life diversification matters when the price goes down. Unless you develop a habit of following the underlying commodity, find companies where you can easily folllow the prices of the inputs and has the ability to raise prices when commodity prices increase.

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

If you were asked what is one of the sexier cars on the market? on the list you likely find Porsche. Porsche is wholly owned by Volkswagen, but the top shareholders believe if they take out Porsche from VW, the shares of Porsche would rise higher than VW.

In an article by Victoria Waldersee, Jan Schwartz, and Christopher Steitz of Reuters, VW is seriously considering bringing an IPO for Porsche. The IPO could be valued at $130 billion compared to the current market value of VW at $116 billion.

In 2009, VW acquired Porsche resulting in the Porsche and Piech families holding 31.4% of the shares in VW and 53% of the voting rights.

VW is considering list 25% of Porsche.

Linking to dividend paying stocks, all companies buy and sell companies for a wide variety of reasons and stock market theories, but in the end they are are trying to unlock shareholder value which they do not see reflect in the present shares. Sometimes the market likes conglomerates, sometimes it likes stand alone companies, at present the market like companies with some debt; if interest rates go towards 5% the markets will like companies will lower debt. There are many cycles in the markets and management has to pay attention to the cycles. It does not necessarily change the company, but highlights what it does and continues to do. As an investor you will see management making changes to reflect what the market wants, otherwise someone will begin to buy shares to unlock shareholder value.

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

In many countries around the world, although young people can do all types of sports, adults tend to like watching one sport over the rest. In the US, the National Football League and the championship game is the Super Bowl; in England, football or soccer is the number one sport; in India it is cricket. When a sport is number one, that means TV revenues will automatically be more for the media giant which telecasts the games. We see this play all over the world and some people will remember when Fox came to the US and bid high for rights to the NFL and Super Bowl; in India, two media giants are bidding for the rights.

In an article by Shilpa Jamkhandikar of Reuters, the telecast rights to India’s premier cricket league with its hundreds of millions of viewers is up for renewal. The exclusive 5 year TV and digital broadcast rights could run as high as $6.7 billion. The companies expected to make bids are: Amazon.com Inc, Reliance Industries. Sony Group and Walt Disney Co.

Cricket is the 2nd largest sport in the world with 2 and half billion fans and the IPL is like its Super Bowl said Anton Rublievskyi, head of Parimatch, a betting company that advertises at the Indian Premier League. 350 million people watch every week.

At the moment, Disney owned Star India is one of India’s top broadcasters.

India’s biggest retailer is the Reliance and its digital platform is called Jio and has a broadcasting joint venture called Viacom18. The group recently bought the rights to Spanish La Liga or football in Spain.

Amazon would the streaming on its Amazon Prime Video platform.

Linking to dividend paying stocks, all companies have a base of support and they try to diversify when and if the base changes. If you think about P&G, they started with Tide and have 10 divisions that make over a billion a piece. At the start of every year, they are in a very good place to start from to stay profitable, they need to execute on their marketing strategies. If they do well, the profits roll in and shareholders receive another increase in the dividend. The companies you invest what is they largest market and how consistent is it?

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

Every company has new introduces new products and when they do there are often logistical problems because the process is under the spotlight and something that can go wrong often does. When the process is a high profile or in the national media, even a small thing is a disaster waiting for everyone to see. Former President Trump fits into the category where the media is examining his next step and it is not hard to find flaws, without looking too much.

In an article by Kennth LI, Julia Love and Helen Coster of Reuters, The Trump Media and Technology Group (TMTG) has launched an app on Apple’s App Store called Truth Social. The app is free to download and people have preorder the app to automatically download when it became live. As a company, your first appearance needs to be perfect, unfortunately many users reported either having trouble registering for an account or receiving a message – due to massive demand, you are are on a waitlist. The statement could be true or part of the hype that Donald Trump tends to say.

TMTG is planning to list on the stock exchange through a merger with a SPAC firm called Digital World Acquisition Corp and if it does will receive $293 million in cash that DWAC holds in trust assuming no one redeems their DWAC shares. Additionally in December, TMTG raised $1 billion from private investors which is not available until the listing on the stock exchange closes.

Linking to dividend paying stocks, one expects new products to be introduced every year and whatever is the best method to connect to their customers, the company to be involved with. With dividend paying companies, they have time to do all the things that need to be done so the operation goes as seamlessly as possible. With new companies that have more hype than action, they announce things that the public may think are operational but in reality are future hopeful actions. If the company which you own shares in does that, you should look for alternatives.

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

If you watched the movie Jason Bourne series the first movie The Bourne Identity, one of the early scenes was Jason going into a Swiss bank to get to his safety deposit box. Jason had money, passports and left a gun in the safety deposit box, however to arrive at the box there was lots to security procedures to get through in this pristine looking bank. What other secrets were to found in the bank?

In an article by Jesse Drucker and Ben Hubbard of the New York Times News Service, there are reasons why the famous Davos World Economic Forum is held in Switzerland. The Swiss banks closely guard the identifies of some of the planet’s richest people and clues into how they accumulated their fortunes.

A self described whistle blower leaked data on 18,000 bank accounts holding more than $100 billion to the German newspaper Sueddeutsche Zeitung. The newspaper shared the data with a non-profit journalism group, the Organized Crime and Corruption Reporting Project and 46 newspapers around the world including the New York Times.

The data covers accounts from the 1940’s to 2015 but not the bank’s current operations.

The leak shows that Credit Suisse opened accounts for and continued to serve not only the ultra wealthy but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine.

For those who treat the government accounts as their private accounts and steal money, the Credit Suisse took their money. The example of people from the Venezuela’s oil company had $270 million; Zimbabwean businessman; the sons of former Egyptian President had $200 million; General Akhtar Abdur Rahman Khan from Pakistan helped funnel billions in dollars to fight the Russians in Afghanistan send money to Switzerland. It seems if you have money, the banks welcome you.

Linking to dividend paying stocks, there are multiple countries that have bank secrecy laws and some of the money that flows was not earned money, some of it is stolen money, some of it money that the owners do not want to pay tax on, some of it is corporate money, some of its intelligence money, it all gets comingled. If you own shares in a company doing business around the world, invariably some of it goes through tax haven countries to benefit the company. If they are exposed in the media, would you be okay with it. If yes, then continue to hold, if not find alternatives.

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

Every medium and large company in business will soon be using AI if they are not already. The Artificial Intelligence in general is a good thing. However at times the AI will be slightly different than what the rules call for.

In an article by Tina Bellon, Hyunjoo Jin and David Shepsardson of Reuters, Tesla makes wonderful cars to drive and more of workings are based on software. If there is concern with the software, the company sends an update, similar to the Microsoft updates you likely have seen on your computer. Sometimes the updates are not exactly what the rules are. If you drive and there is a stop sign, the police want you to actually stop and not do a rolling stop. In Tesla’s software, they had a feature for the vehicle which according to President Elon Musk on Twitter. the car simply slowed to -2 mph & continued forward if clear view with no cars or pedestrians. (in the eyes of safety officials that is a rolling stop). Tesla issued a software update to disable the function.

Tesla develops almost all of its software to allow for regular over the air updates. An analysis of public data showed 7 of Tesla’s 19 recalls since January 2020 or 37% were addressed with over the air software updates. The other recalls were something physical that had to be done at the dealerships.

When a software update is updated, the fix is less expensive than recalling the cars and all vehicles which need the fix receive it. Traditional recalls show an average compliance rate of 70 and that falls to 50% for older vehicles, according to the National Highway Traffic Safety Administration (NHTSA).

Linking to dividend paying stock, all companies want to do more for their customers and Artificial Intelligence and software will play a significant role. The issue will be the regulators – how they adapted to the new uses and how they regulated, given the fewer resources they have. At some point some companies will be similar to the risk reward as Elon, a rolling stop is not a stop according to law enforcement. What will companies do or how will they react?

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

The economy of the US is based on shopping or consumer spending (66%) and the biggest retail on the planet is Walmart. If you want a good picture of how the economy is doing, you want to look at Walmart because it also one of the best run companies on the planet. Walmart is an operational superstar and given its scale, the expectation is whatever the supply chain problems, Walmart has a partial solution.

In an article by Arriana McClymore and Uday Sampath Kumar of Reuters, Walmart had a very good year in beating profit and sales expectations.

CFRA Research analyst Arun Sundaram said given high inflation, we expect consumers to trade down stores and that should bode well for Walmart in 2022.

Walmart’s 4th quarter net revenue was up 0.5% to $152.87 billion. Adjusted earnings per share was $1.53 or 3 cents higher than estimates. Stores open for more than one year showed a 5.6% increase.

Online sales was up 1% after a blockbuster increase of 69% the year before. The previous quarter was up 8% and analysts were expecting a 10% increase.

Walmart’s answer to Amazon is Walmart Connect marketplace and CEO Doug McMillon says another 40,000 sellers will be added to the service. In addition, Walmart is expanding its pickup and delivery service by a third.

Linking to dividend paying stocks, for a long time Walmart has operational excellence and it was the resources to move into any marketplace it wishes to. It might be on the minds of consumers for rolling back prices, but how it manages to do what it does is the reason why it has scale and negotiation power with suppliers. It is a company where you can see what Walmart does very well and compare them to other alternatives.

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