The Nazi Officer’s Wife is about one lady surviving the Holocaust The  book was written by Edith Hahn Beer with Susan Dworkin published by William Morrow, NY, 1999. Edith  was born in the in the early 1920’s and similar to many in Austria was Jewish. They did not have a strict Jewish home and identified as Austrian more than Jewish Austrian. The family made a middle income living, the children were expected and did attend post secondary and life would continue. At the time the Nazi’s invaded Austria, Edith was one credit away from becoming a lawyer. The Nazi’s restricted all the rights of Jews and it is always surprising to me how any country the Nazi took over quickly embraced the new government’s regulations.

The Jews of Austria saw the writing on the wall and given they had very few rights and many regulations to be controlled (people on the internet think they are being watched, the Nazis tried to watch everybody without the internet) tried to leave the country. Most countries did not want too many Jews and many had to stay. Edith took a different route she went to Germany, for in Germany unlike the rest of the world, women were expected to raise children and take care of the men (in other countries, women were expected to take the place of men in the factories). Edith eventually met a low ranking officer and as long as they did not talk politics but kept the conversation to keeping the house clean and looking after children. All was okay. The book discusses how the Germany bureaucracy tried to keep track of people so Edith was always trying to find ways to stay off the official matters – one method was volunteer for the Red Cross allowed extra food rations.

At the end of the war, Edith skills as a lawyer were needed for she became a judge to help the city rebuild. Eventually Edith left Germany and lived most of her adult life in England and then Israel.

One of the more interesting sentences is when an idea is idiotic to begin with its application never makes any sense.

Linking to dividend paying stocks, everyday there are ideas to make money on the markets – some of them are good, some of them are less so. When you consider the ideas think of the implementation and the consequences of the ideas. One idea that has been good for many years is buy profitable companies which pay a dividend. As look as the company remains profitable you do not have to do anything except reap in dividends and higher multiples paid for the stock.

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

President Trump has a view of the world but he seems to rooted in the past and beginning not to match reality. On February 28, the President was having a discussion with the steel and aluminium makers who among other things supply the auto makers who have over the years have moved the method in which cars are produced. The auto makers use countries around the world for parts and supplies and often put them together in the home country. The President wants more autos and trucks made and produced in the US, although he forgets more and more manufacturing is done by robots not people. Auto plants will never be big employment generators, but autos and trucks are still an important part of the economy. While meeting with car makers he told the world, I will impose a tariff on steel and aluminum.

In the past, countries have tried to impose tariffs to ensure domestic competition has an fair or reasonably equal opportunity to earn contracts. The US imposed tariffs on steel and aluminium 10 years ago, it lasted less than a year. The problem is the big giant steel mills can not compete with new steel mills. The large companies carry a larger fixed costs and the steel they use to make profits on, the margins are very thin because of smaller steel mills. There are wonderful learning sessions about the steel industry and how it changed by Clayton Christensen’s Theory of Disruption. If you want to read about it or watch the videos on You Tube. They are worth watching.

President Tump has picked steel and aluminum to go after the trade imbalance of China however, China is not the number maker and importer of steel and aluminium, the US allies and biggest customers are. Prior to the 1970’s Trump would have been correct, in the 2000’s he is playing a game that alienates his allies. In additon much of the manufacturing is offshore because American companies moved their operations to other countries to cut costs and the tax system helped encourage them to do it.

If someone goes into Walmart much of the items you will see and save money on will be made outside the US. It is similar to many retail stores. The world has changed and the President does not seem to realize it and corporate America has benefited from the supply system changes. Consumers may have benefited from lower prices, but combined with lower wages and wage stagnation, they might remember an easier time. The President who changes his mind on policies daily, makes it hard to do investment decisions because of his instability and his lack of understanding the facts. If only the President would read his reports rather than watching TV.

The President is pushing other countries to do something back for if they do nothing, their home elector will see them as weak. In addition, the President is in the midst of trying to examine trade deals with Mexico and Canada which border the US. Negotiations were made much more difficult.

Linking to dividend paying stocks, as investors we pay a great deal of attention to the President of the organization because he/she speaks for it. The person can pick whatever side they wish, it will have consequences. If the person can be seen as understanding the trade offs, one might be able to invest. If the person is not seen as understanding both sides before they speak, uncertainty is the normal course of events. Many people choose to wait on the sidelines when uncertainity is the norm.

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

One of the pictures that is seen is the President leaves the White House to fly to another place. The President just before he enters, turns and waves and he off. The plane he enters is a Boeing and it is called Air Force One. In an article by Jennifer Epstein and Julie Johnsson of Bloomberg News, the office of the President and Boeing agreed to new plane for $3.9 billion.

Much of the cost of the planes is the extra modifications to ensure the plane can operate as a White House in the air. The plane has two electrical systems (one for a back up) the communications system, self defense capabilities, work and rest quarters and other features. In the world of the President he likes to say he saved money by his negotiations which is a good thing, if it happens. According to the office of the President, they were expecting to spend $3.95 billion on two planes to serve as Air Force One. The deal came in at $3.9 billion. Somehow the President saved the country $1 billion and Boeing tweeted “President Trump negotiated a good deal on behalf of the American people.”

Linking to dividend paying stocks, this is an example of the company can play second fiddle to the buyer. Boeing sells planes around the world which is good and it has to deal with many complex Presidents – from the rational to the emotional and they have learned to deal with their customers. In the world of win-win, how does the company allow its customers to believe they have won while still making money.

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

If you watch crime family movies, because it is easier to use this example, you will notice crime families occasionally join together at weddings. The idea is to use the offspring to cement relationships and that way the two families can work together rather than kill each other for territory. The premise has been used by Kings and countries for centuries. When President Regan helped end the cold war, American companies were encouraged to do business in Russia. Given Russia has some of the biggest oil and gas fields in the world, it is not surprising to see Exxon Mobil doing joint ventures with Russia’s Rosneft. Things were going well for Exxon until Russia for political reasons try to influence the US elections and the Senate imposed sanctions on Russia. It was relatively easy to pick individuals, but the Senate also want to impose sanctions on economic activity. This is when it gets more difficult, earlier the same government encouraged economic activity with Russia. Now they want less.

In an article by Ernst Scheyder and Vladimir Soldatkin of Reuters, in 2012 Exxon and Rosneft were expecting to spend up to $500 billion in developing oil and gas in the Arctic and Black Sea. The sanctions are to on lands within Russia as it does not include the Sakhalin project off the eastern coast of Russia. In lands north of the Arctic Circle, the joint venture announced a major discovery which was to developed in 2019. Depending on how long sanctions are to be imposed, Exxon may be back in Russia proper, but for now Exxon took a $200 million dollar loss on their operations in Russia.

Linking to dividend paying stocks, when times are good politicians love to embrace the success of companies. When things change, sometimes politicians reverse their love which means the company has to be diversified to wait till the wind blows the other way. Exxon Mobil is the largest oil company in the world and has its operations in many countries where oil can be and is found. Shareholders should be used to politicians using oil and gas as tool for political gain or loss.

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

This blog recommends how you can use the many things in your life to invest. Once you have the ideas down, you will need to do homework and today’s information can help. Tiffana Paulrajah at Inovestor Inc used the her data base to come up with some companies for you to play defense by. At the same time, the company’s dividends and growth rates help give you a consistent return on your investment for low risk.

Her criteria was to start with the S&P 500

a) Dividend Yield of at least 3%. (the chart was down at the end of Feb)

b) An economic performance index or EPI (Return on Capital divided by the Cost of Capital) above 1.

c) Return on capital equal to or greater than 10%.

d) Beta of less than one.

e) Positive earnings-per-share growth rate

f) An economic value-added (EVA) figure that is positive. For investors the higher the better.

g) Positive free-cash-flow-to-capital.

Company                 R/C        EVA per   EPS Growth    FCF/     EPS   Mkt Cap    Beta  Dividend

%             Share        Rate %       Capital %         (US $ Bil)              Yield %

Altria                      24.9         n/a              5.3                  9.6        3.2       127.114   0.65       3.6

L Brands                20.9         3.8               3.3                  3.8        3.2          22.794  0.65        5.6

Campbell Soup     20.3          2.7              3.5                  8.6        3.2           16.638  0.4          3.0

Verizon Comm      17.6         5.3              7.4                  3.9         2.8      402.088    0.56         4.4

Kellogg                    16.4         4.3              3.7                  7.6        2.5           33.945  0.53        3.1

Public Storage        14.8       4.6               6.8                  15.0      2.1            38.423  0.46        3.8

AT&T                        12.2        3.5              4.8                    5.2      2.1        455.956    0.43        5.1

Nordstorm              12.2        2.0              2.9                    5.7      1.8           14.022   0.73         3.7

CenterPoint Engy  11.4        2.8              4.2                    1.3      1.8         24.935      0.62      3.8

Target                      11.2         2.4             4.8                   10.5      1.6          56.411   0.61       4.1

P&G                          10.4         0.9             3.9                     2.9      1.4        234.811   0.66       3.0

General Mills          10.2         1.0             2.8                    5.8      1.4           42.478  0.61        3.4

Tapestry                  10.1          0.9            1.1                    4.3       1.5          17.589   0.48       3.1

Linking to dividend paying stocks, a chart such as this helps you narrow the field to pick the best one for you. It also show you of the hundreds of choices, most will not fit your criteria of being defensive and good growth, but there are excellent choices in the above list. For a dividend paying stock, you want to take the advantage of time to increase your total return, take the advantage of time to make your decision. Remember when you opened your account, the advisor asked you what kind of investor are you? the above criteria can be changed to fit your criteria, but remember what you are trying to do, then do.

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

PS

In this case, Quantico is a book written by Greg Bear, published by Vanguard Press, NY, 2005. Quantico is the headquarters for the FBI and the book is a thriller having the agents track and stop an anthrax scare. If you add, that for a number of years anthrax was not on the radar of anyone and in the book the President is trying to change the FBI to something else. You have a sense of dedicated workers who are trying to piece together the puzzle pieces. With most thrillers, the action take place all over the US because there never tends to be one nerve center, just a bunch of moving pieces. The questions of what does this mean and what connection is to anything else are the prevailing ones. Add a number of interesting personalities and you will read a good thriller.

Linking to dividend paying stocks, as investors you are trying to put together moving parts of a puzzle to determine is my investment at a low risk and will give me a high return? The answer is maybe if conditions remain what they are, but will they? With dividend stocks, the idea is most of the puzzle is already fixed and as investor you just need to fix a few pieces. Did the company remain profitable? if yes, half of the puzzle is done. Can the company continue to pay its dividend? if yes a large portion of the puzzle is done. Will its people continue to execute the business plan? if yes, almost all of the puzzle is done.

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

Earlier a book The Silk Road examined the trading patterns of the “road” from China to Europe in Macro Polo’s time. A thousand years later, in the year 2000 it is vastly different. China is spending $900 billion dollars on roads from the Baltic Sea in Russia to the Yellow Sea in China; it is also spending billions on rail transportation both high speed for passengers (cutting a 40 hour trip to 8 hours) and more importantly rail to move goods from the factories to consumers around the world. When most of us think about China, we think of the big coastal cities of Beijing, Shanghai, and Hong Kong and the surrounding countryside. In the world of electronics and the biggest hydro dam in the world look to this city of 8 million in the middle of China.

China is big country and decided Chongqing is the place for electronics and after making the Acer computers – they need to be shipped out. At first they took the trip on the Yangtze River but that is too slow. Then railways to send the goods to the Shanghai area, but afterwards the ships must go around South Asia which takes a month. Now days railways have been built, the goods can go to Duisburg Germany in two weeks, however it costs twice as much as by ship. Part of the problem is the railways in Kazakhstan are a smaller gauge than China. This is good news for Khorgos – this dry port has great railway cranes one typically sees at ocean ports. An You Tube video on the Silk Road will show some of the engineering feats and the potential outcomes from building the road.

Another solution which China is working on is a road and rail corridor towards Gwadar Port in Pakistan from Xinjiang, China. This will shorten the shipping time. It also changes the geopolitical world.

Linking to dividend paying stocks, infrastructure can change cities and companies opening new sales territories and opportunities. While the geo-political concerns are for others, the road offers opportunities to be taken advantage of.

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

There has been a number of mass shootings in schools, but somehow this one is different. What is different is the reaction from the students at the Parkland, Florida high school – it is more than a week in the press, perhaps it was simple as saying – politicians have given us no solutions, we call that BS. Wherever you are on the spectrum of owning to opposing guns, a limit is coming. The organization at the center is the NRA or National Rifle Association. They have made their voices heard and given money to politicians to have an open gun policy. (elections that are reasonably well funded have a better chance of winning). Similar to every organization, they try to offer discounts for members who hopefully use the services of the companies.

After the Florida shooting, the President of the NRA doubled down on his position, while the rest of the public said no, something needs to be done. Since the position of the NRA was harden, companies reading the tea leaves or the winds of change have said we are no longer offering discounts to NRA members. According to Newsweek the companies include: Hertz, Alamo Rent a Car, Avis, Allied Van Lines, Bestwestern, Chubb Insurance, MetLife Insurance, Delta Air Lines, First National Bank of Omaha (issued the NRA credit card) and others. If you look at typical corporate decisions, they take time to make. All these companies decided it was not worth the effort to maintain a relationship with the 5 million members and the President of the NRA. If the NRA changes its tactics or stance, the companies may come back to be involved with the association.

Linking to dividend paying stocks, all organizations try to partner or associate themselves with other organizations to increase sales or goodwill. Sometimes they are non profit, help fundraise for causes they like, but at times the organization needs to be changed. The public decides after a number of years it is better to not be associated with the group rather than be associated with it. The process is interesting to watch, how quickly it can unfold. Hopefully the values of the companies you buy stay within the public’s approval for a long time.

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

 

In mid February Walmart report that rather than earning an expected $5.13 for the year, it would earn between $4.75 and $5.00 a share. On the face of it, that is a good thing, but as a growth stock that is not good and its shares fell 10%. The reason the shares fell is the alternatives and they start with Amazon. If Amazon is still growing, why is not Walmart? In an article by Matthew Boyle titled Walmart online sales slow, according to CFO Brett Biggs Walmart was a bit lower than plan. This is important because Walmart’s online shoppers tend to spend twice as much than the bricks-and-mortar customers including buying more higher-priced items.

According to Neil Saunders of GlobalData Retail, young people and professionals do not associate Walmart with online so they default go to Amazon. Sales at Walmart e-commerce unit rose 23% but compared to previous quarters it was half the pace.

Gross profit margins contracted by 50 basis points, however Mr. Biggs does not see that level of decline continuing. Sales were up in food, apparel and toys.

Linking to dividend paying stocks, if you go to a Walmart it will be busy, the question is how much of the shoppers wallet are they getting? The company will continue to make money, but in 5 years will it be bigger? If you buy the stock, what is your horizon?

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