One of the most influential global mining companies is called Glencore PLC with headquarters in Switzerland. The company owns the base metals that China needs to move its country forward. Glencore has decided the world’s automobile companies will actually be producing and selling electric vehicles to the masses of consumers. Some of that will be mandated in Europe, but as prices of electric vehicles come down to what the masses of consumers in the United States can afford, electric vehicles will be more prevalent on the streeets. Glencore according to an article written by Barbara Lewis and Maiya Keidan of the Globe and Mail will be in the thick of things.  The Anglo-Swiss company production of cobalt and copper has doubled in 5 years to 2016, while production of nickel is up 4 times the research compiled by Reuters by S&P Global Market Intelligence.  Global companies such as Glencore need to look a decade in advance and Glencore believes the cobalt, copper and nickel are the key metals for electric cars.

Glencore has been struggling to pay off debts, which were north of $40 billion, and now are less than $30 billion. The company has benefited from raising commodity prices and selling off assets deemed as non core. It does have more debt than competitors BHP has $16 billion; Rio Tinto has $8 billion and Anglo American $5.5 billion. CEO Ivan Glasenberg believes Glencore has manageable debt but is still trying to lower the debt levels.

Linking to dividend paying stocks, trends themselves do not produce income needed by global companies. When you decide if you needed a new vehicle, will that one be electric or gas? If you decide the choice is electric, then you can look around are you the exception or the rule? If you are the rule, then companies which have the metals to make the batteries to go into electric vehicle will have a long and fruit full run as prices will continue to increase because of increased demand for the materials. As an investor you are looking for those situations.

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

In investing there are many choices, some are good and some are not. There are good and bad people trying to ensure they have fees from you. It is easy to be in the sucker’s list and if people are honest they will admit to being sucker at least once (more often more than once). Reading an article about credit counseling a list came forth:
Always follow the crowd
Jump both feet into a situation you don’t understand
Fail to get the full story on what is motivating the perpetrator
Assume that the favorable conditions that are compelling your risk taking will continue forever
Be willing to help a dear friend or family member with sacrifices that go beyond what is reasonable or balanced
Become paralyzed during any short window that you have to escape a risky situation
Overestimate your skills as an investor
Jump into areas of investment where you lack experience
Succumb to social pressure (most exploitation will occur by people you already know)
Take all the risks in a transaction with a person who has nothing to lose and everything to gain

To combat the above, the first aspect is to take your time. If an opportunity is only happening today, then you have to learn to wait. One of the service clubs which I am member has a policy any expenditure over $5,000 needs to be approved at the next meeting which is every 2 weeks or it takes about a month to make a decision. Even so, the last one took 3 months from the time of idea, research and decision. Someone who is stringing you along likely will not wait 3 months. Therefore, on decisions ensure you establish a time frame of when you can and cannot make transactions. If you are on a budget deciding between needs and wants, give yourself a few days. There are always great opportunities today and tomorrow, you can not take advantage of all them.

Linking to dividend paying stocks, one of the reasons to buy them is the simple act of paying a dividend implies the company is making a profit. You can see is the company making a profit or not. Was the dividend increased over the years? If yes and you like the prospects for next year, then you can do your homework to make a decision.

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

In December the holiday season of the year influences the stocks market. Similar to your life, the end of the year means tax season and people begin to consider what gains and losses have been made through out the year. The tax ability to use losses to offset capital gains at some point shares are sold will be done. The companies which have not done as well are sold, if you still love them, you can always buy them back in the new year.

The end of the December is also end of the quarter for the mutual fund industry. The companies all need to dress up their portfolios for the marketing process in January and February for tax season. Some companies benefit from having done well, in the price range of success and fund companies buy them to show their investors they own the shares.

The other thing you as an investor need to do is examine your portfolio for two things: one if your investments were correct and the market has agreed with you sending prices higher, do you take profits? When do you sell or do you hold? Part of the answer is does the stock holding constitute an increasing percentage of your total holdings. For example if you owned the FANG stocks and they are now 50% higher, they will constitute for example 30% of your holdings. Looking at your risk tolerance do you want 30% in those stocks or do your look at alternatives. Do your homework before you shift.

If you own mutual funds, some of them will be actively managed or have higher MER than index funds. Since you own them, that was a good decision, but at some point you need to look at the MER or management expense you are paying and the alternatives in the market. After December a portion if the funds are rear backed commissions will be available to sell, you may want to find out how much you can sell and what fees the mutual fund company charges. If you own a mutual fund company it is generally better to sell after December than before because the fund company will distribute its dividends in December. After distribution the price falls. One suggestion if you are considering changing for either lower MER fees is to change the fund from reinvest of interest and dividends to cash in the account. When the amount builds up you can invest in lower MER or individual stocks.

Linking to dividend paying companies, although the reason you buy them is for their dividends, there are normal cycles in the stock market for your to examine the portfolio to ensure the tax system and stock market works for you. Part of your investment strategy is to link into the institutional aspect of the market and make it work for you

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

The future of the automobile company is in electric cars and no one is happier than environmentalists some but not all are those people is the world who tend to believe that corporate world is bad. The unfortunate thing for the environmentalists is the electric company is operated by a battery. The battery is a lithium-ion battery and one of its primary material is a metal called cobalt. Cobalt has one source in the world (alt’sugh more maybe found) and the country is called the Democratic Republic of Congo.

The Congo history in regards to Europe is in the 1880’s the major powers of the Europe decided each were going to a piece of Africa and the Congo went to Belgium. Similar to every country, people were sent to see if money could be made and sent back to the home country. Farming was tried, but moved to mining and some of the world’s biggest mines are found there. The country became independent and changed its name to Zaire and then changed its name to Democratic Republic of Congo. At the moment, the governance of the country is less democratic as civil war and corruption have been widespread.

Mining has been an economic source of income and the world’s mining industry pay private armies to protect its mines. The Congo is the primary supplier of cobalt with production of 123,000 tons.  There is likely an non official or grey area where cobalt is mined, some of the mining is with child labor and some controlled by various militias. Domestically it is complicated, but the metal is mined and world at the moment can overlook the internal happenings of the country.

Linking to dividend paying stocks, the supply chains while everyone would loved the people are well paid and have many of the same freedoms, the reality is usually less so. At some point you have to overlook or slowly work on those areas where you object to. It is difficult in a global economic portfolio. With your money you can make a difference or try to minimize the worst of the economic cycle, but overlooking the profit margins can mean less money in your bank account.

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

Only in the US, where in mid December Congress is trying to pass a tax bill which gives more corporations money does the President comment on a deal that he says is not good. In November the Justice Department sued AT&T, in the tax bill, the President has said every taxpayer is getting a “great deal” which if you listen to anyone outside the White House you will find many differing viewpoints. As investors you invest in corporations and if they get to keep more of their money, that is a good thing for your investments. AT&T says the Justice Department lawsuit is a big over the top, because they do not own any cable companies so there is no threat to cable companies. All cell phone companies wish to induce you to become the carrier of choice and then add on features to increase your bill. One of the many methods to increase the features is offer exclusive programming and that is why they need the cable company.

Linking to dividend paying stocks, cell companies are companies to own because they have subscribers and most of them will be loyal, they will continue to pay their bills to the company. The company needs to continually update its ability to make it easy to use the system. The company makes more money off of data than voice, so it needs to have channels to keep you loyal. When you evaluate the companies you want to know about churn ratios or people moving in and out of the service. In a pro corporate environment it is unusual for the President to get involved, but it is an unusual Presidency. Often the senior executives have gone to the lawmakers and determined what do they have to put on the table to allow the deal to go through.

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

On You Tube there are many videos and some you can learn from. One video is the CEO of Amazon Jeff Bezos who was interviewed at the Internet Association Gala on May 8th in Washington, DC.

Amazon started with books over the internet but has branched out over the past 22 years to a variety of other features and that is why the company’s stock remains a growth stock. The consumer side started with books and moved to hundreds of thousands of items; the company warehouses and distributes for 3rd Parties (from small business doing $100,000 in revenue to Nike); they tie the previous two to Amazon Prime which has 100 million subscribers; they do web and sever hosting and involved in the entertainment business.

Mr. Bezos talks about customer obsession which is trying to constantly try to figure out what customers want and will pay for. The customer obsession is different than other companies who can be competitor obsession (who is your competitor and what are they doing which works and how do you copy?); there is product obsession; business model obsession; technology obsession or how is the company centered.

The customer obsession has a number mirrors such as the company eager to invent or pioneer. It is not only important to listen to the customer but try to invent on behalf of the customers. The trick is the customer has to see the value and willing to change to do the invention. Some of the inventions will fail. The key is the company has to embrace and learn from the failures – Mr. Bezos says It is not invention or pioneering if you know the answer already. You have to start with the unknowns, sometimes the ideas need other things to make it work, but you keeping trying to make your customers life easier.

The third aspect of customer obsession and failure is think 3 to 5 years out or long term rather than the next quarter.

To do the customer obsession Amazon has 3 big ideas (in reality they are simple and obvious and Mr. Bezos says if they are not obvious there is something wrong. The ideas should have no time limit) The 3 big ideas for Amazon are low prices, fast service and vast selection. One can see how over time the directions of Amazon fit in.

In the interview, Mr. Bezos showed an example of how theses ideas link together. Amazon sells everything over the website, they ship to customers. Some of the products were wrapped tightly in packaging, Amazon really did not like and asked the manufacturers why the packaging? The real answer for display purposes so people could see the products at the store. Amazon has no stores, they asked for less packaging which cut costs which allowed customers faster delivery – it was easier to open. They also saved tons of packaging going to the waste facilities. Another example is solar panels – all the distribution/warehouses roofs will have solar panels – it saves money but generating electricity and is a cleaner source. That has been both cost savings and long term thinking.

Linking to dividend paying stocks, when you read the President message in the Annual Report the above is what you are looking for. At the core what do people come to work to make money in their company. What directions is the company headed? The President’s message will give you an idea of how the company should be doing. Look for the 3 big ideas of the company.

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

 

 

 

There is a documentary about Las Vegas called The Player and you can easily find it on You Tube. The title is The Player – Secrets of a Las Vegas Whale with Trish Regan 2017.

Millions of people go to Las Vegas for entertainment and to gamble. Most will lose something but they often are not going expecting to win. There are a few players who are professionals or can make large bets. The bigger the bets, the more they can win or lose and the big players are called Whales. If you are going to Vegas or any casino the best odds are in Baccarat and Blackjack. The worst odds are the Big 6 spin the wheel game but many will try.

There are rules which the Casinos follow:

if you win $1,000 the casino will comp you or give you feebees of $200 the next time you come.

If you win $200,000 the comp will be towards $80,000. The reality the cost of the plane to get you to Vegas and the exclusive hotel or housing will not cost $80,000.

To beat the Casino you will need to do a couple of things: one be good.

You will need to remember the longer you play, the greater the chance the house wins. The casinos are about math and what is the expectation a card comes up for you and the house, but there are inefficiencies in the system.

The reality is you are not playing the casino but the dealer and since he/she is human, they can make mistakes, as you will make a mistake. For a whale, there is built in advantage because often the Casino gives them up front spending money or $50,000 to start. If the player can get ahead, the odds are better for them. It will take a great deal of focus because the Casino will try to do things which make it harder for you. The Casino dealer will slow it down, they can change dealers, they will give you free drinks, people will typically gather around as the amount of money being bet gains in size.

If you look around the country you will see many more casinos than in the past – Vegas is still the number one place to go. Many of the smaller Casinos around the country are run by companies from Vegas and their strategy is for you bet there, and occasionally give you feebees or comps to come to Vegas to bet. As a gambler you have two tasks – one try not to make mistakes and know when to fold them and when to let it ride.

Linking to dividend paying stocks, there are fewer freebees or comp – maybe a light meal at the Annual Meeting, however the same strategies come in play. The idea is not to lose your money which leads to investing in profitable companies. If you follow the market, occasionally you will notice companies going out of favor for a variety of reasons. if you have done your homework it is possible to buy a low prices and wait as the price comes back (value investing) or searching for inefficiencies. The trick is you probably can not see them everyday. Take your time, stick to profitable companies and you can be better off in the future.

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

It is good to read autobiographies of people and a good one to read is Everything All at Once by Bill Nye – How to unleash your inner nerd tap into radical curiosity and solve any problem – published by Rodale distributed by Macmillian, NY, 2017. In the Bill who on TV is known as the Science Guy believes everyone was an inner nerd that can lead to being curious about a subject and then learn to find a solution. In theory due to the internet we can be as curious about subjects more than we ever could in the past. We only need to pick a subject and spend time learning and then move towards a solution, it sounds easy but it reality people seem not to know what is true and what is used to make money and what is false.

While researching your homework you will be both skeptical and deny. Skepticism is a discipline. It is a component of critical thinking that helps you to keep you from fooling yourself or allowing yourself to be fooled. Denial is like a lock on your tool kit that keeps you from thinking about ideas you do not like. What do you do with all the information you can find? Mr. Nye has 3 steps: First is the information specific? Second is it based on the simplest interpretation of the phenomenon? and Third Has it been independently verified? ask the question Prove it?

Specificity – a meaningful claim shuld be precise enough that we can agree on what we are talking about? If it passes can we test it?

Simple interpretation of the phenomenon is based on Occam’s razor which states a simple explanation for a phenomenon is more likely to be correct than a complicated one.

Matter of testability – is trying out the idea on relying on others for their expertise or everybody knows something you do not. In the testing phase you need to ask more questions:

Is it part of an ad or sponsored content?

Does it clearly benefit a specific person or company?

Does it have no obvious source at all?

Does it contradict thing you have heard before? You have raised the suspicious level?

Is it something you really want to be be true? If so you need to be extra careful?

Linking to dividend paying stocks, Mr. Nye offers you a method to evaluate the research and information you receive or research to make a decision. Normal life brings in opinions and ideas, some you like, some you reject and some you can money off. One of the easiest methods to make money is try not to lose it and start by investing in profitable companies. If the company pays a dividend and can consistent raise it, more money comes to you and over the long term you will be wealthier. If you use compound interest then do not change your strategies because the compounding is what will drive up those returns.

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

 

It is good to read autobiographies of people and a good one to read is Everything All at Once by Bill Nye – How to unleash your inner nerd tap into radical curiosity and solve any problem – published by Rodale distributed by Macmillian, NY, 2017. In the Bill who on TV is known as the Science Guy believes everyone was an inner nerd that can lead to being curious about a subject and then learn to find a solution. In theory due to the internet we can be as curious about subjects more than we ever could in the past. We only need to pick a subject and spend time learning and then move towards a solution, it sounds easy but it reality people seem not to know what is true and what is used to make money and what is false.

Science and what is nowdays called critical thinking takes discipline and diligence. What makes us humans to make a living is our ability to make predictions by finding patterns in nature and then to take advantage of them. Along the way to researching, you need to take heed of a simple phrase – Everyone you’ll meet, ever, knows something you don’t”. In the book, Mr. Nye uses the example of working for Sundstrand Data Control which makes most of the black boxes in airplanes, he and his team were trying to solve a problem but they were not quite working. His boss told him to go talk to the machinists who made the parts for input. They showed him their concerns or abilities and the result was a better instrument. The lesson Mr. Nye learned is many times the people with the best knowledge are no so obvious. In the above case, the machinists were steps away but in days before asking were miles away from solving the problems. Another example was watching a flight attendant dealing with an bad customer – the skills she used to calm the person down and be able to move on to her other functions required a great deal of expertise, being professional at a high standard and she showed them with ease.

A great teaching point was in high school physics class a teacher drew a titled ellipse and asked Mr. Nye to figure it out. Mr. Nye pondered it, and could not come up with a solution. The lesson the teacher was teaching him was to look at the problem differently. The secret was to step back and reasses the problem at hand, in this case the solution was to tilt his head to see. The lesson was about constraints – about what ideas to leave out and the ideas you can work with. Constraints can help you because you can not process everything. The issue is not defining the problem, the issue is why is the problem a problem in the first place?

Bill Nye’s Code of Conduct:

Be open and honest

Do not pretend you know what you do not know

Show the world as it is, rather than the way you wish it was

Respect facts, do not deny them just because you do not like them

Move forward only after you trust your design.

Linking to dividend paying stocks, generally we believe there are a number of great ways to invest in the markets and we will find a really easy way. The truth is getting compound interest to work for you rather than against you is the easiest way but it takes time to do. This is the reason why if you have credit card debt, you  will be paying for a long time, if you own the credit card companies you will be benefiting for a long time. It is hard to find a stock which has a 40% internatl rates of return consistently – credit cards have do this. In order to buy a stock, unless you work there are believe you have some insider knowledge, most of us have to do homework or testing hypothesis. If it works then you try – you can invest with real money or there are many software programs to track companies until you buy them.

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