Whenever you hear the banks are going to report their quarterly earnings, the first number you should pay attention is loan losses. Did the number go up or down? Banks are in the business of loaning money, are they getting repaid? If the answer is yes, then the profits should be healthy. If no, then the economy is in trouble.

In an article by Anirban Sen, Elizabeth Dilts Marshall and Imani Moise of Reuters, the banks announced they are hopeful they can generate growth this year. There are many issues on the front pages, but the banks have not experienced major disruptions to their core businesses.

JP Morgan Chase reached new profit levels; Citigroup had 16 consecutive quarters of loan and deposit growth and Wells Fargo is adding new depositors.

JP Morgan Chase generated $36.4 billion in profit. All but one business units, revenue grew. Thanks to the new China-US trade deal, JP Morgan opened more than 70 branches in new markets and China.

Citigroup which once was a consumer powerhouse, but now concentrates on institutional clients business expand its reach. Citigroup is reaching consumers through its digital banking.

Wells Fargo which has a new CEO is still cutting costs, but revenue was in line with expectations as well as loans and deposits increased.

Linking to dividend paying stocks, it is hard not to own the large banks because they generate profits, it is always how much? The main aspect to investing in banks is credit quality or loan loss provisions, you want the bank to be both aggressive in getting business but those businesses pay their bills. If the credit quality stays high and the folks who are in charge keep a tight reign in house then the bank is worth holding on to.

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

The best performing stocks in 2019 was the technology focused and includes names such as Microsoft, Amazon, Facebook, Visa and Mastercard. If you are investing, it is hard not to own some or all of them. According to Saqib Iqbal Ahmed of Reuters just 4 stocks – Apple, Microsoft, Facebook and Amazon generated more than 20% of the S&P 500’s total return according to data from S&P Dow Jones Indices.

The dilemma is the stocks have done well, if you own Index funds you own the companies. Most mutual funds have one or more in their holdings. They are hard not to own, what do you do, besides hope the stocks continue to go up. There are plenty of reasons why they could and there are plenty of concerns they may not. The S&P 500 information technology sector trades at a 12 month forward price earnings ratio of 21.53 versus the rest of the S&P 500 of 18.26.

Kevin Dennean technology analyst at UBS Global Wealth Management gradually reduced exposure to the technology sector but it has gone against us. Valuations only became richer.

Linking to dividend paying stocks, some of the technology stocks pay dividends and if you buy them for their dividends and long term capital gains, then it does not matter as much, if the shares did not continue to rise at 20% a year. The writer owns a couple of the list and some of them have doubled and more which is great. At the moment selling is not on the table, but dividends are and long term growth are on the table. The stocks will rise and fall as they may however if they continue to rise it would be welcomed.

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

All large organizations after they achieved their size feel there home towns do not always share the greater glories the company is bringing to their home town. A story about the large employer becoming more involved in municipal politics is not unusual, many large companies consider their payroll part of the benefits of being in the hometown, and want their taxes on their buildings to be as low as possible. The issue to the hometown is if you shrink one pot, who will will make it up? how do you not have all the possible conveniences for all citizens of the hometown?

In Seattle, Amazon has grown and occupies a great deal of office space in the Seattle as well as other space for their other projects. In an article by Gregory Scruggs of Reuters Amazon has donated $1.5 million to pro-business candidates as they are legally allowed to do. The City Council decided to restrict political contributions by saying any company that has over a 5% foreign ownership can not contribute. Amazon shares have 9% foreign ownership. The primary reason why Amazon has contributed more money to political financing is whether housing is a right or not a right. Similar to many cities across the US, Seattle has a housing crisis where people can not afford rent. Part of the problem is the where the minimum wage is, part of the problem is a whole host of other reasons. Seattle has proposed those that are doing very well, should pay more. The average engineer in the Amazon office space makes at least $100,000. The city of Seattle is looking to help the support workers.

Linking to dividend paying stocks, there are many inequities which need to be dealt with by government and collecting taxes is one method in which they do it. Anyone making money suggests they are willing to pay a fair share, but there share is always less. There is no perfect answer to the problems of inequities, the issue will continue to raise its head in the political space. As investors, one hopes the companies can still continue and make profits to pay dividends and everyone can work on solutions.

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

Within the world of investing are hedge funds and they are here to stay, although many funds did not beat the indexes, which cost less to invest in. The hedge funds selling premise is they will beat the indexes with their ability to leverage their trading strategies. Sometimes it works wonderfully, sometimes not so well.

One of the higher profile managers is William Ackman who runs Pershing Square Capital Management. In an article by Svea Herbst-Bayliss of Reuters, Mr. Ackman told his investors in 2018 he was going to spend greater amount of time on research.

Last year, the fund returned a 58.1% return making it the best hedge fund return according to Hedge Fund Research. In 2015 and 2016, he had losses, in 2017 and 2018 he had smaller losses and in 2019 he was worth the investment. Currently he has $7.4 billion under administration.

The biggest gains came from Chipotle Mexican Grill which under a new CEO was up 72%. Other stocks such as Starbucks was up 40% and ADP was up as changes to the company were made.

When hedge funds bet the index, investors are happier to pay the fees, but if they do less than the index, why not buy the index?

Linking to dividend paying stocks, trying to invest in profitable stocks which pay dividends should not be the highest return, but the risk level is among the lowest levels. In 2019, the companies and index were up about 20%, with low risk that seems to me, that is good and worth trying again in 2020 and beyond.

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

When you think about the big cities of the world, you may not think about one of their biggest assets – pension funds. Most governments still have defined benefit plans, while the private sector has moved to more individual plans which are less expensive to administer. The other aspect is defined pension funds pay a “defined” amount of money to the pensioner irrespective of how the funds make money; if the fund does not do well, in this case the government has to come up with the money (taxes); if the fund does well, everyone is happy.

In an article by Rachel Savage of Reuters, the Mayors of London, UK and New York have decided the pension funds under their administration will no longer invest in fossil fuel investments. The number one reason is climate change.

The pension funds of New York City had $189 billion in assets under administration was to take 5 years beginning in 2018 to divest of its investments.

The City of London had already reduced its holdings from 1% in May of 2016 to 0.2% in September, 2019. The London Pension Fund Authority had $8.5 billion in assets under administration.

Linking to dividend paying stocks, in the fossil fuels grouping are some of the well known dividend paying companies. The issue is do you want to do something from the outside or from the inside? Fossil fuels are going to be part of our economy for a number of years in the future, and the companies are some of the most profitable companies to own. It is possible to follow the lead of the Mayors of New York and London, for their are utilities which earn a good dividend in clean energy.

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

The stock market was up last year which meant the indexes were up, however not every stock was a winner. Hopefully the investments you did buy were winners, but if they were not, in an article Jennifer Dowty offers advice on questions to ask before you buy a stock. One of the first is take your time to limit risk and try for the rewards.

1. What does the company do? People buy for all kinds of reasons, that is understandable and one of the reasons is they hear from friends something, they have invested in. If you know what it does, if it is not doing it well, you can exit quickly. If you do not know, then you are gambling.
2. What is the company’s revenue breakdown? All companies sell something to gain revenue, what are revenues? If you know the answer, in a quarter or two you can determine if revenues are doing better.
3. How profitable is each business segment? Ideally the company makes a profit, it sells a product or service and after costs (EBITDA – earnings before interest, taxes, depreciation, and amortization). You want to ensure each quarter the margins it sells at continues to allow for profits.
4. Is there growth – both top line and bottom line? Is the company’s revenue growing each year? how about their profits? Is the growth coming from internal or are they growing because the company is buying other companies?
5. How leveraged is the company? Debt is a two edge sword, most companies need debt to operate, too much debt is bad; but in a low interest rate environment not using debt is not good.
6. What is management’s track record? Ideally management will under promise and over deliver. Management sets out plans – did they meet or exceed them?
7. Are earnings revisions positive or negative? Why are they changing their earnings?
8. What is management’s outlook? If you do not listen to the conference call, many companies give you the opportunity to listen to the conference call through the company’s website – they can be very interesting to listen to.
9. Does management have skin in the game? How many shares does the management own?
10. What is the stock’s valuation? Is the stock a good buy right now from a valuation point of view.

Linking to dividend paying stocks, one of the golden rules of investing is try not to lose money. The questions above will allow you to determine when to sell. If all the indicators are what you want and you buy shares, the next big question is when to sell. If the indicators change, this is one of the reasons why buying a dividend stock can be easier. The big concern is for a profitable company will the dividend be increased? If the answer is yes, then enjoy the dividend and continue to hold the stock. If the answer is no, there are many other alternatives in the market and begin to move to the alternatives. You can park money in a Dividend index fund.

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

In every industry there is a convention, there is a convention for every interest under the sun but some conventions are bigger than others. One of the biggest is the annual Consumer Electronics Show or CES held in Las Vegas. According to an article by Mae Anderson of the Associated Press, the show is held the first full week of January and is expected to attract more than 170,000 with more than 4,500 companies exhibiting their products. In the electronics world, more than 50 football fields of space was filled with all kinds of devices to make your life easier.

One of the most important themes this year, is how will people watch more TV and use their phones to watch new services? The keynote addresses will focus on executives from TV networks NBC, CBS, video services such as Quibi and Tubi.

Streaming services are sold on a subscription basis – is there a limit to how many services consumers will pay for? will they adapt to separate prices with or without ads? or will they flock to free without original movies and shows? 5G is coming to make it possible to watch whatever, whenever will enough people pay?

Linking to dividend paying stocks, whatever sector your investments are in, it is worth seeing where the convention is. In every industry there are focused publications, which help keep you informed, but sometimes just walking around and seeing the people in the industry can make you an informed investor. The convention helps define what you are thinking or should be thinking about.

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

All countries have peak holiday seasons where people in general move from one place to another. In the US, it is Thanksgiving weekend followed by Christmas holidays. In China it is the Lunar New Year, where millions of people will travel back to their parents and grandparents’ hometowns.

When people travel in great numbers there is extra demand on the banking system, and in an article from Reuters, China’s central bank was cutting the banks must hold as reserves. The number is $800 billion yuan or $ 149,2 billion in dollars.

The Chinese economy is expected to grow, but only 6% which is low for their economy. The releasing of reserves would allow banks to increase their loan portfolios to stimulate more lending. The Central Bank of China stressed the money should be used for small. local businesses. (Unlike the US tax cut which helped large businesses the most).

Linking to dividend paying stocks, the easing of reserve requirement is one method to stimulate growth and central banks use it all the time. The bankers are trying to achieve some level of balance between the politicians remarks and the ability for individuals and businesses to repay their loans. The fewer defaults the better it is for everyone.

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

When you think about movies and music, one aspect you should consider is the global appeal of the products. In early January, a group including Tencent, Singapore Investment (GIC) and Qatar Investment Authority (QIA) bought 10% of Universal Music Group from Vivendi of France. In 2021, the group has the option to increase their holdings another 10%.

If you do not know Tencent, you may have heard about their main competition Alibaba of China. The deal allows Universal Music Group greater access into the Asian market.

In an article by Sudip Kar-Gupta and Kane Wu of Reuters, the IFPI federation said in April that global recorded music revenues had risen 9.7% in 2019 from last year. For Vivendi, Universal Music Group sales increased nearly 16% to Euro 1.8 Billion.

In November Tencent reported better than expected 3rd quarter revenues. The world’s largest streaming service is Spotify, which Tencent owns a minority share. Spotify has 100 million paid subscriptions, while Tencent Music had 35 million.

Linking to dividend paying stocks, as in the music buisiness there are many interrelationships and a desire to have subscription based service. The greater the people renew, the more money the company generates and the more opportunities it has to continue to make profits to pay dividends.

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