Ever since the invention of the internal combustion engine which powers motor cars, the fossil fuel business, successful companies have been reaping dividends for decades. The biggest company was Standard Oil owned by the Rockefellers which made John D the wealthiest person in the world. Since the fossil fuel industry has made many millionaires and paid billions in dividends. The most profitable company in the world is Saudi Aramco and with higher oil and natural gas prices, companies in the oil and gas sector are raising dividends.

In an article from Reuters, the President of Harvard University Lawrence Bacow wrote on the school’s website, the endowment fund has no direct investment in fossil fuel exploration or development companies. The change has taken place since 2018. The reason why the announcement is important is because the Harvard University endowment fund is the largest in the university sector with assets under administration of $42 billion.

The fund provides up to 10% of the school’s budget and not being in the oil and gas funds means they had to find equivalent dividend paying companies. The good new is they exist, it is just easier in the oil and gas sector.

Linking to dividend paying stocks, when investors examine long track records of companies paying dividends, it is easy to find them in the oil and gas sector and these companies have traditionally been some of the largest payers of dividends on the stock market. Microsoft recently overtook ExxonMobil as the largest payer, and in England, BP is the largest dividend payer. As an individual investor, not being in one field or another is relatively easy to do, but as the fund gains in size, it is tougher to do as oil and gas holding are included in many funds including index funds. It is possible.

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

Every country in the world has friends and foes at some point because of strategic value to the country. The more developed countries in terms of economies tend to view other countries for their resources first and then the politics. Ideally the politics means the government treats the rest of the citizens reasonably well, but if the country has mineral wealth so much the better. The view has been around ever since the discovery of gold, if you remember you history there was the California Gold Rush which brought thousands of people to California and parts west and ensured those states would join the US, One can see gold rushes in areas of Alaska and Australia and many other gold producing areas.

In the oil business, the country of Iraq has the 3rd largest reserves in the world after Saudi Arabia and Russia, but its politics are not the same. The US and UK oil companies helped developed the oil fields, installed the Shah until the people of Iraq decided to go another way and the US imposed sanctions on Iraq. The oil is still there to be tapped and there were plenty of customers for the oil including Japan, China and Europe. This meant when the America companies left, other countries oil companies stepped in.

In an article by Samya Kullab of The Associated Press the French company Total signed $27 billion contracts to develop oil fields, natural gas and a water project. Total is a diversified company including an engineering part. the contracts were to develop the Ratawi oil field in southern Iraq, a gas processing hub to capture natural gas from 5 southern oil fields, a project to change salt water to fresh water and inject it into the reservoirs to maintain oil production. Another project was to develop a 1,000 megawatt solar power plant.

For generations ExxonMobil (including the Standard company name) has been in Iraq developing oil fields but has decided to pull out as well as BP is leaving Iraq and in steps Total.

Linking to dividend paying stocks, companies operate from a home base or headquarters and their job is to the shareholders and employees, while the country of their home base often has slightly different considerations. The world of geopolitics sometimes aligns with corporate interests, and sometimes it does not, this is one of the balancing acts the Board must deal with. When you invest in a company, you expect the company to sell its products around the world and often it does not say who can and can not buy. Sometimes the headquarter country is trying to do something else and the company is caught up in the geopolitics of the day. Geopolitics does change, how does your company deal with it?

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

All around the world, there are countries producing agricultural products which most of us do not have a great deal of attention to. Most of buy processed foods at the grocery store and do not think a great deal about the ingredients just do you like the taste of the item, for example cookies. One of the items in the supply system is palm oil.

In an article by Mei Mei Chu and Naveen Thukral of Reuters, the Palm Oil industry comes primarily from Malaysia and Indonesia which produce 90% of the world’s palm oil. Indonesia is the largest producer with 60% market share and Malaysia has about 30% to equal 66.2 million tonnes.

In oil palm plantations in Malaysia they are having problems with workers, there is not enough of them as COVID has reduced the number of people who can come into the country. Normally migrant workers from Indonesia and South Asia, but similar to all farms around the world, if the farms are not maintained more pests including rats, moths and bagworms are allowed to ruin crops.

In Malaysia, the Malaysian Palm Oil Board data shows a drop in average crude palm oil yields to 1.41 tonnes an acre from 1.56 tonnes over the same period from last year.

Indonesia has more people and does not have the same labor shortages and expects output to rise as more acreage was planted with palm trees.

Linking to dividend paying stocks, we often look around in our backyard and in reality no matter the industry we can see similar concerns around the world. Traditionally people in less developed countries have come to more developed countries for higher wages than what they would earn in their own country. COVID has slowed down movement of people and some degree of mechanism is a possible solution, however skilled people are always needed. Hopefully the companies where you invest your money continues to attract and retain good people.

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

If you think about cities, one of the big economic drivers is a convention center with hotels and parking nearby. Every week there is a different convention and somewhere there is a convention for every interest. Convention centers create jobs in the tourism sector and if you consider cities such as Las Vegas and New Orleans they have great infrastructure for conventions and many people go to the cities. During COVID, what people could not do was gather in large groups at conventions and other facilities, but with more people being vaccinated conventions are opening up.

In an article by Victoria Waldersee and Nick Carey of Reuters, the auto show which is one of the premier conventions in cities around the world opened in Germany. The setting was changed from Frankfurt to Munich and the theme was changed to Mobility of the Future. Given the German car companies of BMW, Audi and VW the German auto show is showcasing German vehicles, but it also showcasing bikes, e-scooters.

Hildegard Mueller, president of the industry association VDA said the goal of climate protection is guiding us. In a “normal” year about one million people came through the auto show.

Those organizations who believe the auto companies are not doing enough protested the show and the theme.

Linking to dividend paying companies, while climate protection is a given, changing multi billion dollar companies to become green will take time. Companies particularly in Europe have to show results and conventions help sell what the companies are doing. During COVID there were few conventions and companies saved or did not spend money on conventions and meetings, with the re-openings it is possible to go to the previous ways. How much should they do and is it more effective online are big issues which need to be asked about.

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

At one time, many of the goods produced in the world came from the US and then a shift to China was made, now if you buy something somewhere along the line there is a Chinese influence. This has been very good for China to bring millions of people towards more middle income status. The Chinese government through its many state companies added the infrastructure abilities to ensure goods can be made in China, shipped by road or rail to a Chinese port to be sent around the world. (from a logistical point of view – looking at the You Tube videos of Chinese ports is inspiring). The result of all the actions is the reality as the economy of China goes so does the cost of commodities. For this reason there is a focus to read and learn how the Chinese economy is doing.

In an article by Clyde Russell of Reuters reported 2 of China’s main Purchasing Managers’ Indexes (PMI) fell in August from July. The Caixin/Markit PMI fell to 49.2 from 50.3 in July going below 50 for the first time in 1 and 1/2 years. The Caixin/Markit PMI focuses more on small to medium sized businesses, while the official National Bureau of Statistics PMI is angled more toward state controlled enterprises.

The official PMI has declined for 5 consecutive months and this has meant the global price of metals has decreased. Copper futures in London have dropped 10.4% a tonne from a high in May of $10,460 to $9,335.

China sold from state reserves a total of 420,000 tonnes of copper, aluminum and zinc. The sales appears to have placed a cap on the rallies in those markets, limiting imports and sending a signal to the broader market that Chinese demand can no longer be taken as an ever increasing given.

Linking to dividend paying stocks, most stocks that pay dividends are not tied directly to a commodity because commodities rise and fall in price. As long as price is more profitable to mine than take out of the ground commodity companies make money. However what goes up comes down and what goes down comes up, there are cycles and if you invest in companies related to commodity prices have alternatives when the cycle changes. If you can invest in companies that are not tied to commodity prices, it means you have less alternatives to consider.

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

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.