In the world of commodity prices, the supply and demand charts from long ago are still the best charts to use. On the London Metal Exchange (LME) the commodities prices are determined.

In an article from Andy Home of Reuters for the first 6 months, the price of tin is trading around $31,800 a tonne or up 51% this year. Aluminum prices are up 25% and copper is up 21%.

The tin demand has not stopped but supply has. COVID has shutdown production in Indonesia and Malaysia.

Malaysia Smelting Corp which last year produced 22,400 tonees of refined tin had been forced to shut down and was already struggling with a furnace problem. One of the older furnaces has slowed production and the company has warned production will not be up to prepandemic levels until the end of the year.

Indonesia, the world’s largest exporter of tin has been struggling to lift production despite the higher prices. Exports were down 3% to 26.900 tonnes in the January to May period.

Linking to dividend paying stocks, there are some sectors that can be easily viewed by the supply and demand lens and they are simple to understand. How is the supply? What is the demand? Ideally, the bulk of your investments should not be tied to supply and demand stocks because although you can make a great deal of money on the upside, the cycle means you lose the money on the downside. Ideally the bulk of your money should be tied to companies which are profitable over any all cycles either through a monopoly or monopoly like conditions. In this fashion, stock prices go up, they go down, but on the long term your dividends and higher multiples for profitable companies means your wealth goes up.

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

When we shop we can think globally, but often we think locally, particularly with food companies, however many other countries around the world have the same or similar type of shopping in their country and if you love a particular sector in your country, one idea is to look internationally for similar companies.

In an article by James Davey of Reuters, in Britain, one of the biggest supermarket chain is called Morrisons. It was founded in 1899 and has grown to owing 85% of the nearly 500 stores and 19 mostly freehold manufacturing sites. It makes half the fresh food it sells.

Clayton, Dubilier & Rice (CD&R) made a bid of L 5.52 billion or put the company into play. The board rejected the offer as too low in June and since then JO Hambro made a bid of L 6.5 billion ($ 8.7 billion) then the bid was topped by Fortress Investment Group which is owned by Softbank. Apollo Global Management based in New York announced they were in the hunt for the company but had not made an official bid.

Similar to other countries in the world, the British supermarkets of Tesco, Sainsbury, Asda and Morrisions experienced a jump in sales with the pandemic in place, however the cost of ramping up online delivery hit profits.

Fortress has said it expects no material selling of assets and said its normal operating philosophy is to enpower existing management teams. Morrisons biggest shareholders are Silchester, BlackRock and Columbia Threadneedle or 3 big international investment firms owing 15.2%, 9.6% and 9.4% respectively.

Linking to dividend paying stocks, most of us are bias towards where we live, work and play which means our stock portfolios will tend to reflect this bias. It is good where you are you can easily determine if the company you own are doing well or not doing so well. It must be noted there are similar economies are the world and many of the people do the same thing. Sometimes there are great opportunities outside of your local area, sometimes it is better to stick to your knitting, just be aware and occasionally do homework to see if what alternatives there are out there.

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

Often because we are human we tend to see things as monolithic because that is the easy way to present them. But similar to many industries there are clashes underneath the easy headline. In the case of the oil industry, OPEC has been the monolithic group for years, ever since OPEC banded together to help raise prices or maybe it was the 7 Major Sisters needing a reason to increase prices. One never knows for generally it is a combination.

In an article by Stanley Reed of the New York Times News Service, there is fighting between Saudi Arabia and the United Arb Emirates (UAE) over production quotas.

Saudi Arabia wants production outputs to be cut, while the UAE wishes to increase production.

UAE has been using its vast resources to transform the country into a business, financial and tourism hub. The UAE has 98 billion barrels of oil or 6% of the world’s total.

Unlike the major oil companies who are feeling the heat by the courts and shareholder votes regarding climate change, the UAE does not have the same concerns at home. It you protest you might end up in jail.

The Abu Dhabi National Oil Company (ADNOC) plans to spend $120 billion over the next 5 years to increase production. Sultan Ahmed al-Jaber, chief executive officer of ADNOC has hired people to build a trading oil operation which is considered a key business tool by Shell and BP. He has sold stakes in pipelines and other infrastructure to investors such as KKR and BlackRock to raise billions of dollars.

Abu Dhabi has 2 large investment funds called the Abu Dhabi Investment Authority and the Mubadala Investment Co with over $900 billion in assets.

The UAE currently produces around 3.8 million barrels of oil and wants to raise it to 5 million a day by 2030.

At present the OPEC present production limit is 2.7 million barrels per day, which UAE considers unfair.

Saudi Arabia is the biggest producer of oil and they have multiple incentives aimed at keeping each country in line. Saudi Energy Minister Prince Abdulaziz bin Salman says he has to keep the balance between the countries.

Linking to dividend paying stocks, all companies are painted with a simple statement of what they do and making it simple has the advantage of quickly understanding what a company does. It does not have the advantage of what the company can and will become. Use the simple to determine if you like or do not like what the company is doing and then you can do more research to see the challenges and opportunities of all the companies in the group, just try not to paint all companies with the same brush.

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

The economy is opening up after COVID shut it down and that is a good thing. Governments around the world have battled a health care crisis and we are recovering, that is a good thing. It is not surprising that as the economy recovers changes are happening at a rapid pace and more and more involves technology. This is good because customers are served, not so good because once technology is in place, there is no turning back some jobs will be lost. If you think about the auto plants of Henry Ford time, there were thousands of jobs and to keep people on the job, Henry Ford offered higher wages. Those auto plants do not exist, the new ones go to You Tube type in making of F150 Fork Truck and see how many people are on the auto plant? The F150 is Ford’s biggest and America’s biggest selling truck.

In the service industry, automation has come partly because of a need and partly because after the pandemic starting wages have risen to attract people. Pre pandemic, if someone worked in the service industry the wage was near the minimum wage and to make a living, people needed to work well over 40 hours or had more than one employer. That has changed as people have choices to go to higher paying jobs or closer to $15 a hour.

In an article by Ben Casselman of the New York Times News Service, employers have been making choices because they need bodies or automation.

When Kroger supermarket customers in Cincinnati shop online, their products may be picked by a robot in a warehouse, not by a person in their local supermarket. If successful it will be rolled out to more stores. The warehouse is 375,000 square feet and uses more than a 1,000 robots.

Gamers at Dave & Buster’s in Dallas who want pretzel dogs can order and pay from their phones – no need to flag down a waiter.

At the drive-through lane at Checkers in Atlanta, the request is done by a voice recognition algorithm.

For years we have seen technology focused on the manufacturing world and when there are repetitive movements on a regular basis, robots are very useful to use. The robot does not have sick days, it works when the line is moving and it is capital depreciation asset. Now technology is going into the service businesses and when it goes in, it is very difficult not to use it.

Shana Gonzales, a Checkers franchisee in Atlanta was having a hard time finding workers and thought there could be another solution. She contacted Valyant AI, a Colorado based startup that makes voice recognition systems for restaurants. It took a while for set up and testing but it has worked very well and she has added the service in her other Checkers restaurants.

Ms. Gonzales has 4 restaurants and needs 30 people if she could find them. The pay in Georgia was $9 a hour and she has increased it to $10 a hour. Technology is easing pressure on the workforce. If she paid $15 a hour she might be able to fully staff, but would have to raise prices which might cut sales.

In a survey of 300 global companies at the World Economic Forum this past year, 43% of the businesses expected to reduce their work force through new uses of technology.

Some economists see the increased investment as encouraging, some do not. Some people in the industry see good in technology, but if the idea is to make it very simple why would somebody spend a career in the industry?

Linking to dividend paying stocks, all profitable companies need to need to use technology to their best advantage and see the glass half full. When one company is using technology to meet customer demand, others will hear and see what they are doing in the trade journals and follow suit. One company will have an edge and the large profitable companies buy the company to offer their customers the edge, is an age old story. Profitable companies do not have to be on the edge, they have patience to see the positive affects and the resources to duplicate to maintain their market share and margins.

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

In an article by Ken Sweet of the Associated Press, American Express is upping the benefits and the fee on its flagship Platinum Card as it tries to hold onto its customer base as the economy opens up again.

American Express is changing how it views its customers – according to Rafel Mason, senior VP of international premium products at American Express, the card is aimed at those who travel extensively, but those who have an affluent lifestyle and are willing to pay for it.

Every credit card does the same thing, gives you credit to buy now and pay later, however some cards have higher limits than others. The card with the greatest limit is the black card of American Express but the platinum card ranks high on the list. The Platinum card has been in circulation since the 1980’s and it fit a very specific niche in the marketplace – it was aimed at those travelled, stayed at hotels, dined out and shopped. Consider the affects of COVID 19 on all the above for the past year and half, the revenue stream dropped as people could not do those things, what should American Express do?

The fee is being increased from $550 to $695 a year.

The benefits included a $179 credit with CLEAR, the security verification service found at many airports; a $200 credit for prepaid bookings on AmEx’s Fine Hotel & Resorts or Hotel Collections properties; a $240 annual entertainment credit service towards NBC’s Peacock or the New York Times and $300 annual credit to Equinox gym membership or a digital fitness class subscription.

Linking to dividend paying stocks, for generations American Express has been associated with those who travelled (fly business class); stayed at hotels (3 star plus); dined out (restaurants) and there are many people who have the card. Then the pandemic hit and although American Express does things, it was linked to travelling, hotels and eating out which meant they had to do a rethink of their business. As the world comes out of COVID 19 expect profits to roll in and that is why profit generating companies can continue. They can pivot when needed, change to the circumstances and keep going with their strong customer base.

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

When you consider hacking measures designed by governments to examine what other governments are doing, that is one aspect of geo-political measures which all the world believes is semi okay. We hack you, you hack us; however the same tools used to hack governments can easily be translated in Ransom attacks on companies.

In an article by Nomaan Merchant, Eric Tucker, and Frank Bajak of the Associated Press, US and British agencies disclosed in early July how Russian intelligence tried to break into cloud agencies of hundreds of government agencies, energy companies and other organizations.

The US National Security Agency (NSA) described attacks by operatives linked to the GRU, the Russian military intelligence agency.

Brute attack means the automated spraying of sites with potential passwords until hackers gain access. The agency urges companies to adopt methods urged by experts as common sense cyber hygiene, including the use of multifactor authentication and mandating strong passwords.

The NSA says GRU-linked operatives have tried to break into networks using Kubernetes, an open source tool developed by Google to manage cloud services. The hackers also used Microsoft’s Office 365 cloud services.

Joe Slowik, a threat analyst with the network monitoring firm Gigamon, said brute force method and lateral movement inside networks described by the NSA are common among state-backed hackers and criminal ransomware gangs, allowing the GRU to blend in with other actors.

In the news conference, the NSA was joined by the FBI, the Cybersecurity and Infrastructure Security Agency and the British National Cyber Security Center.

John Hultquist, VP of analysis at the cybersecurity firm Mandiant characterized the activity described in the advisory as routine collection against policy makers, diplomats, the military and the defence industry.

Linking to dividend paying stocks, when governments play the spy game against each other, business tends not to mind because they have been doing that since the Cold War and before. However, the same skills can be used against business and they will be charged Ransomware, because the line is not very clear anymore. In the old days, bank robbers were asked why they robbed banks, they would answer that is where the money is. For a profitable company, the money is within the area of the internet and protection has to be a top priority. Ask what companies and if common sense cyber hygiene is a given or monitored in your investments.

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

If you are a fan of Sherlock Holmes, you may have seen a movie or description in the books after the fog in London, UK. In reality, although London is accessible by river to the ocean and the fog does come in, much of the fog was coal pollution. Ever since the discovery of coal in northern England, London has been burning coal, at first for heating in homes and then to generate electricity. The ports and railways of England developed to bring coal to the marketplaces.

If you know something about British history, former Prime Minister Margaret Thatcher closed down coal mines and caused a great deal of strife in labor relationship.

In an article by Elizabeth Piper and Susanna Twidale of Reuters, the UK Minister of Energy Anne-Marie Trevelyan moved the target to end the use of coal to generate electricity to October 2024. Part of the reason is climate change and the year was to be 2025, the other part of the reason is the UK is hosting the UN Climate Change Conference in November.

Coal known as coking coal will still be mined for the steel industry.

Linking to dividend paying stocks, industries changed over time, but people get attached to the history and do not see the alternatives. It takes effort to see the alternatives becoming better and the new need to change. For companies that continually make profits and pay dividends, examining strategic values is important or you may want to find alternatives.

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

If you think about the brokerage company Robinhood, it was done a wonderful job shaking up Wall Street and introducing new retail investors to stock trading. If you use Robinhood, one of the biggest reasons for using the app is low commission or zero commissions to buy and sell. In that sense, Robinhood makes it easy to set up an account and begin trading. The downfall is they do a poor job on allowing people to use margin and for many the margin or borrowing is too easy and too much. Margin is the wonderful double edge sword – if you use it you can juice up your returns, if you are wrong you end up with too much debt. Debt has to be repaid.

In an article by Stan Choe of the Associated Press, Robinhood Financial will pay close to $70 million to settle a wide range of allegations including it gave its customers misleading information and allowed some users to make riskier trades after they lied about their trading experience.

The financial penalty is the largest ever ordered by the Financial Industry Regulatory Authority (FINRA), a non-governmental organization that oversees the brokerage industry. Jessica Hopper, head of FINRA’s department of enforcement said it reflects the scope and seriousness of Robinhood’s violations.

Robinhood neither admitted nor denied the allegations but for its 31 million customers, has improved support for customers, including talking to a service representative on some issues.

FINRA noted Robinhood seemed to be using approval lots with very limited oversight to decided whether to allow customers to trade options.

Robinhood has been fined before.in 2019 it paid $1.25 million and 2020 paid $65 to the US Securities and Exchange Commission that it failed to tell customers who the settlement of trades worked. Robinhood goes through a division of Citadel Securities and prices may not be the ones on the screen, likely a little higher.

Linking to dividend paying companies, Robinhood is a new company challenging the rules of the game and it is not surprising the more established companies exert influence over the regulator. The regulator likely did the best thing for everyone but one has to wonder why it was the biggest fine in FINRA’s history. Companies have a love hate relationship with the regulators. They love it when the regulator punishes their opponents and believe they have a working relationship with the regulators and hate it when they come after them.

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

On Independence Day weekend more than 2 million people flew everyday which is a record and an wonderful indication the economy is returning to more normal. When a person flies their expectation is to fly the newest planes and large companies such as United must continually buy or lease new planes. The new planes also tend to be similar to new autos – they should cost less to maintain, achieve greater mileage per mile flown and be flexible to meet the demands of the public. All this is good for the airlines, but to make money they need the business class to resume their flying schedules and gaining points. In most organizations there is a time delay to using the points and the airlines make money from the delay.

In an article by Tracy Rucinski and Eric M Johnson of Reuters, United Airlines made an order for 270 planes worth more than $30 billion made by Boeing and Airbus. The planes go into domestic operations between 2022 and 2026.

United which is America’s 3rd largest airline will be able to boost the number of seats across its domestic network by 30% and get better use out of hubs with the fleet shakeup.

Boeing makes the planes in Washington State and South Carolina while some of the Airbus planes will be made in Mobile, Alabama. For Boeing the order includes the new Max 737.

Linking to dividend paying stocks, profitable companies can look to the future to modernize to take advantage of opportunities in the marketplace. They have the leisure to continually trying to find better efficiencies to help their customers in the short and long run, when they do their customers tend to stay loyal and be repeat customers.

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