The newspaper is something that used to be delivered to every home and had many uses. If you had a wood burning stove the newspaper help with the fire; if you had an outhouse the paper had uses othet than reading. People looked forward to their paper and to read the news, business, sports and if they knew anyone in the paper. The other side of the newspaper was the business side. Media was very profitable because of its reach advertising went to the papers You may remember looking through the classifieds, often that was 40% of the business. The internet arrives and websites are made to classifieds, what happens to the newspaper? Jill Abramson had written a good book called Merchamts of Truth published by Simon & Schuster, NY, 2019 in which she examines the changes in the newspaper business. Those of us that read a paper are a diminishing breed for everything is on line. If you are an advertiser do you still use the newspaper for the majority of your ad dollars, I would hope the answer is no

In the book, Ms. Abramson reviews buzzfeed, VIce, the New York Times, and The Washington Post and the connection into Facebook to gain more readers. With social media, they analyze everything – how long did you spend on an article? Did you like it? Did you share it? And the list goes on. If you analyze it, then newspaper writing changes to meet the analytics.

Linking to dividend paying stocks, the newspaper industry is a textbook case of having profitable business for years with a good dividend and then it changed forever. If you sold newspaper stocks and bought Facebook and Google you would still be in the same position, but did many people do that till later? We often think the industry can change and all will be good,  but reality is change to what? What are the alternatives, do we pay attention to them?

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

 

 

 

 

 

 

 

The biggest company bringing advertising dollars through Google and YouTube had a very good quarter. In an aricle from Reuters, revenue was up 19% to $38.94 billion, well ahead of estimates of 16.82% and $38.15 billion.

Costs at Alphabet remained about the same at $29.764 billion. However margins in the 2nd quarter increased from 18% to 24%.

Net income rose to $9.95 billion or $14.21 per share up from $4.54 a year earlier.

Linking to dividend paying stocks, the results from Alphabet show higher growth and higher margins  which investors love.

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

The biggest vehicle market is in California and the state regulators are pushing the automakers to be increasingly fuel efficient. The President does not like anything President Obama did and was trying to push back regulations. Consumers seeing the weather has changed also like more fuel efficient vehicles, it costs less to buy fuel. In an article by Ben Klayman and David Shepardson of Reuters, 4 automakers Ford, BMW, Volkswagen and Honda said they will abide by state rules rather rules from Washington.

Chrysler, GM and Toyota will review the document but goven the competitve nature of the business will likely agree.

Linking to dividend paying stocks, government regulations play a role in running a company. Companies psy significant money to lobby to get what they want and usually it is less is better. In California the auto companies were on track for lower emissions including from electric vehicles and agreed to higher regulations which is a good thing. Expect the companies to use it in their marketing if one of the other companies refuses to sign on.

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

 

 

 

 

 

 

 

 

When you go the bank to ask for a loan the bank relies on information gsthering by companies like Equifax. It is why it is recommended to check your information at least once a year. In 2017, Equifax revealed about 150 million people’s information may have been compromised, since then besides ensuring it never happens again, Equifax has been taking charges against the possible settlements. In an article by Pete Schroeder of Reuters, Equifax took at $690 million charge in the first quarter. The company will pay to the regulators and close all law suits with additional $10 million charge.

The money breaks down $300 million for free credit monitoring for 10 years, $80.5 million for litigation costs, $175 million to states and $100 million to the Consumer Financial Protection Bureau.

In addition Eqifax will review its security policies will a government appointed third party. Equifax’s Board of Directors will be required to certify annually it has complied with the standards.

Linking to dividend paying stocks, when things go wrong there are prices to pay and lost of independence is one of them. In the case of Equifax the Board should have been approving security measures, now they are required to. Makes you wonder what existed beforehand.

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

 

 

 

 

 

 

Similar to all large companies, Boeing operates on debt to fund their operations. When airlines and regulators parked the 737 Max airplane it had an immediate impact on Boeing. Even though Boeing has multiple earnings streams, the 737 Max was expected to the gravy train for years to come. The problem at Boeing is not a simple software fix, however next year the plane is expected to fly again. In the mean time according to an article by Sanjana Shivdas of Reuters debt rating agencies Fitch and Moody’s have lowered their outlooks to negative from stable. It may change a year after the plane flies and the order book fills up.

As of March 31, Boeing had total debt of $14.7 billion, which will now become more expensive to roll over. Another concern is what concessions will Boeing have to give to the airlines for the non use of their planes as they had to cut flights.

Linking to dividend paying stocks, while companies talk about safety and quality, every once in a while something does not add up. When they do not add up more costs including reputation amd brand awareness are added. It is easier to do it right the first time.

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

 

 

 

 

 

President Trump has imposed tariffs on Chinese made goods coming to the US. On one hand it could cause investment decisions to be made in the US, on the other hand tariffs are a tax and companies do not like paying the tax as it cuts into margins.

In an article by Paul Wiseman, Anne D’Innocenzio, and Joe McDonald of the Associated Press, what are companies doing? With most govermment decisions some companies will wait till to determine how long will it last?

Other companies such as Xcel Brands have been moving operations outside of China to avoid the tariffs. In addition they were planning to move anyways as costs in China relative to other south Asian countries are high. This action could reduce labor costs by half.

In all restrictions there are regulations that exempt types of imports so it is possible to design clothing differently but more or less be the same thing. Examining the classification system to find solutions.

A regulation in shipping notes if the item is less than $800, items from Mexico can be shipped tax free through e commerce.

Another option is to delay making investments till another year

Linking to dividend paying stocks, governments make rules amd regulations, how they are observed and fudged to get around them is a different story. It would be nice if the rules were simple, but that is optimistic.

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

 

 

 

 

 

When government departments have very large contracts, it is reasonable they should pass the President’s desk. One of the large departments is the Pentagon and the Department of Defense is on the final stages of a $10 billion cloud contract with Amazon. The President seems to have a love hate relationship with the owner of the Washington Post.

The biggest companies in cloud computing are Amazon, Microsoft, Oracle and IBM. Naturally the companies who are not listed as first choice are voicing their opinion to the President.

Linking to dividend paying stocks, in democratic countries we expect a process to be followed particularly with very latge contracts. With President Trump who claims he is a master of deal making  one never knows if the process is to be followed or he will change rules.

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

 

 

One of the most watch quarterly earnings because it shows the strength or weakness of the economy is the state of the largest banks in the country. In mid July, 3 of the largest banks reported strong earnings which is good news. While the outlook can be varied, the reality is the banks are doing very well.

In an article by Reuters, JPMorgan Chase and Wells Fargo both reported drops in net interest margins as they paid more for deposits. JPMorgan lowered its outlook for net interest income to $57.5 billion from $58 billion. Which in reality is still doing very well and one should maintain high expectations for the next quarter.

JPMorgan’s net income surged 16% to $9.65 billion as a tax gain and higher net income over shadowed lower activity on the trading floor. Net income rose 4% to $29.57 billion.

At Wells Fargo, the share price is slowly recovering from the account opening scandal of a few years ago and is currently dragged down by the search for a new President. Wells is recovering and when a new President is finally announced the shares should do better. Net income applicable to common stock rose to $5.85 billion or $1.30 share up from $4.79 billion or .98 a share.

Goldman Sachs is heavily influenced by its trading activities and is fixed income business was down as net revenues fell 13%. The affects were interest rate products and currencies changes. The bank’s net earnings applicable to common shareholders fell 6% to $2.20 billion in the quarter. Earnings per share fell to $5.81 from $5.98 a year earlier. Total net revenues fell 2% to $9.46 billion.

Linking to dividend paying stocks, if you owned the banks either directly or in an ETF, then they are still worth holding on to because they are producing solid profits. The bank shares may not double, but the dividends are still flowing. When you buy bank stocks as long as the economy is doing well, then profits should be consistent and dividends almost guaranteed.

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

In mid July, President Trump read the tea leaves on China’s growth and believed his tariff policy was the main reasoning for slowing of China’s growth. As he believed in the power of tariffs, he suggested more could be coming.

In an article by Susan Heavey and Jeff Mason of Reuters, China’s growth is now 6.3% which although robust to most economies of the world, is the weakest pace in 27 years.

The President believes his tariff policy is working, and does not understand why the Chinese leadership have not worked harder to buy more US agricultural goods. In China, sources familiar with the state of negotiations insist the Chinese did not make firm commitments to do one thing or another.

Linking to dividend paying stocks, generally as investors you pay attention to what the senior level of administration of the company says the company is doing. With the US government administration under President Trump it seems it is necessary to double check the firm commitments not just what is said. One of the reasons, it is easier at the corporate level is if the President says a firm commitment is made and the stock price reacts, if the firm commitment is not made, the company can be sued by the Securities and Exchange Commission. Who would sue the President? One has to wait till the next election if things in Washington change.

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