In every project the three resources needed are time, people and resources. It is very easy to run into limited time, need more people on the project to finish and if we had more money (resources) we could have done more. We all tend to believe having more resources at the start would translate into better results. Is this true? Harvey Schachter reviewed a book called Stretch by Scott Sonenshein and the answer is not necessarily. Mr. Soneshein is a Professor of Management at Rice University in Houston, Texas. The key he believes is the ability to use the resources you have to their fullest potential.

Mr. Sonesnhein uses the terms chasing which means focusing on acquiring resources and overlooking how to expand what is on hand.

Stretching is ask what more they can do with what they have, rather than obsessing about what is missing. Many times it is better to have a frugal budget and people have to be creative with what they have. Having demonstrated results, additional resources to scale up are allocated. Stretching includes thinking out of the box; using existing relationships, asking more of your people; looking at the big picture; hopefully your team has a diversity of opinions and skillsets which can be put together to equal more than the parts. The book will help teams stretch better.

Linking to dividend paying stocks, one of the great things about the companies is the ability to generate a profit and continue to pay dividends. The ability to generate a profit tends to mean the company can “throw money at problems” but does it solve it. Sometimes less money is needed and you need to see how management works being lean but not mean and continually come up with profitable ideas for the years ahead.

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

In late June, Alexander Corwell from Reuters reported Qatar Airways was considering buying 4.75% of the stock of American Airlines and then increasing towards 10% at a cost of $800 million. On the face of it, Qatar Airlines has partnered with One-world with a number of airlines and owning shares would cement relationships. Qatar and American could do something similar to Qatar and British Airways have revenue sharing partnerships with their respect hubs in London and Doha. In terms of business and helping the passengers who fly on their planes it could be a very good thing to do.

On the news pages, Qatar is being having a diplomatic dispute with its neighbors and that calls into question should American Airlines have a stronger relationship with Qatar Airlines. Can you separate the politics from the business of airlines? In many instances running an airline is very linked to the country of origin’s policies and government subsidies and at times government long-term plans.

Linking to dividend paying stocks, every profitable company has opportunities which come before it, some they do and many they wait and see because they can and often times saying no is the order of the day. When the news headlines begin to filter into your company, you always have to remember why is the company profitable? how does it generate its highest margin business? Then you can decide do I hold or look for better alternatives.

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

When American was founded by Europeans everything was linked to the sea – inland lakes and great ports. As time moved on and the great industrial revolution started railways were brought to America. Have you ever wondered about their financing. Most of the time, we hear or read about how railroads opened up the country and they did – crossing the states from the Pacific to the Atlantic took 5 days rather than 3 to 6 months on the ships. The boats prior to the Panama Canal had to go around South America and then go north to Los Angles and San Francisco. In time and the discovery of gold in California and silver in Nevada brought a need for railroads. Prior to the discoveries, there was a wish to cross the country on a railroad or ride the rails.

If you jump to the great interstate building of highways after World War II, the interstate highways were built by government, although the work was often done by private companies. In the railroad age, the bulk of money was made and still is moving commodities such as grain, iron ore, coal, and the like. If your town did not get a railway connection, then it likely became a ghost town. If it did gain a railway connection, there was good change to enjoy the prosperity of the country.

In a book called The Railway Game by J. Lukasiewic published by McCelland and Steward. Toronto, Ontario, 1976. The question of how were railways financed answered. The book uses Canadian examples, however the same practices went on in every western country. The age of the railway could open up the country, but it was expensive. The easiest method to raise money was not on the stock market, but the bond market. If you buy a US Treasury bond, it is backed by the government and unless it goes bankrupt it will pay interest and principal on maturity. If a railroad goes to the bond market in Europe (that is where the money was at the start of the industrial age – later it shifted to New York), why would European investors buy bonds on railways going across the country? The reason Europeans bought railway bonds is the government passed legislation which would backstopped the railroads, after all politicians tied rowth of the economy to the railroad. The government guaranteed loans; guaranteed interest rates; direct issue of bonds to railways against mortgages; guaranteed share capital; gave the railways lands; gave the railways the revenue from the lands; gave the railways a monopoly in the area; much of the railway infrastructure was exempt from taxes; municipal governments did the same as national governments in order to get a stop.

If you were in the railway company business, it was very possible to be subsidized by cash and land grants; have guarantees from federal, state and municipal governments. If commodities were discovered and people actually came to farm, remember the plains were not populated by farmers in a day. If all worked well, the service contracts to run the railroad made the promoters wealthy, but the government was on the hook in case of bankruptcy. The public subsidies by governments gave 80 railroads more than 187 million acres. Grants from states added 50 million more acres. Texas gave away lands larger than New York state. Other states which gave away lands included Alabama, Florida, Illinois, Michigan, Mississippi and Wisconsin.

Linking to dividend paying stocks, in the railway age when railways were being built governments encouraged the railway to build and open up the country. In many ways this was a good thing, although for the average taxpayer, maybe not. As time went on, many of the railways consolidated and now they are only a few and are profitable. Was it a good idea for governments to give away so much to have railways built? is a different question, but the history of the country is business is often subsidized by governments. Ideally, governments do not have to take all the risks, however quality dividend stocks work like monopolies and that is a good thing for an investor for low risk.

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

Many financial newspapers occasionally ask the people in the industry – what should you do if …. In an article by Terry Cain, she asked you have inherited $10,000 what should you do? Ideally, debt payment is near the top, but if you have a handle on debt and were to invest what could you do?

One suggestion was to examine your portfolio, it likely is biases toward where you live and try to diversify it. Either nationally or internationally.

Another suggestion is use the power of the kinetic chain which means to take advantage of the tax system which offers opportunities. If you work for a company which offers the ability to buy shares and you can add more, use the matching. You have doubled your investment. Then take some to tax savings accounts and you may receive a larger refund. You have taken advantage of the system with limited risk to yourself and end up with a bigger piece of the pie.

A great suggestion was to buy stocks with a history of dividend growth.

Another suggestion is typically a few companies lead the market indexes and you can use the money to accumulate a position in one of the companies that is on the list on nice to have.

Linking to dividend paying stocks, over the long-term, these stocks will tend to go up because the companies are profitable and can pay a dividend. It is always good to think about what if, but concentrate on the what you have.

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

The video gaming business is larger than the movie industry, but it is the movie industry which gains the headlines. The video gaming industry and the commercialization of the activities of gaming or virtual reality can easily push the amount of money projected to go into market place. At present, the industry is worth $25 billion, it could, remember Wall Street loves the word could, it could go to $80 billion and more than double again by 2025. This according to Citibank analyst Kota Ezowa. Those are high numbers and some companies are worth more than others, which ones should you look at.

Recently, Scott Barlow wrote about themes or trends Citibank sees. If you pick the correct one for example Nvidia Corp. a 10,000 dollar investment in 2012 is now worth close to $100,000. If you picked Sony or Nintendo you have almost doubled your money.

Citigroup’s stocks to watch

Video Gaming       3m           YTD      3 yr Avg        P/E Ratio   P/E Ratio

RTN %     RTN      Ann RTN       TTM           Fwd

Nvidia                  27.9            28.5       97.3                  44.9          39.4

Sony ADR            13.4            36.8       30.0                   n/a           17.3

Nintendo ADR    32.7            31.3        36.6                n/a             31.4

Linking to dividend paying stocks, if you are older you have to watch or see what the younger people are buying. If you do not play games, knowing the industry publishes their most popular game sales, find out who makes them. A hot selling video game adds money cash flow into the company.

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

If you live near train tracks, you will see trains go by on a regular basis and if you examine closely the names of the companies will tend to be small. In another time, railroads opened up the country and everyone travelled by rail. After the automobile was invented, mainly freight travels by rail and commuters travel by train. The passenger service of Amtrack is heavily dependent on commuters, for the other choice of longer distances is the plane. In terms of freight trains, there are only a handful of companies including Warrren Buffett’s BNSF or Burlington Northern Santa Fe in which the dividends he has received paid his financing costs to purchase the stock. When the industry has a few large players and suppliers, the industry is consider mature and everyone collects dividends and lets life go on. Into this picture is a near supplier of trains which you might see if you are a commuter. The CRRC which stands for Chinese State Railway and is merger between the China CNR and CSR or a major railway producer.

The company has benefited from China’s decision to build high speed railways first with suppliers Alstom, Siemens, Bombarider and Kawasaki Heavy Industries. In an article wrtitten by Nathan Vanderklippe and Nicolas Van Praet titled In Their Tracks (June 10) describes the Chinese policies since 2000. The Chinese companies were merger, the large railway companies suppliers were allowed contracts with the railway on the condition they show their designs and train Chinese in the production of railways and railcars. The Chinese are now doing rail projects around the world and bidding less than the private companies. This has done two things one aroused the private companies who work with their governments (building rail cars provides internal jobs; export opportunities, etc). have been having discussions with their governments about Chinese work as well as shake up essentially a semi-monopoly situation. The buyers and sellers all know each other and along comes CRRC bidding at low prices. What should buyers do?

For American supplier companies such as Trinity Rail in Dallas which produces the majority of cargo-rail cars seen on the railways, disruption may be coming to the marketplace. For cities across the US such as Boston and New York have spent less money buying Chinese than traditional suppliers. The traditional suppliers are crying fowl for the bids were remarkably lower than their bids. One can read all the headlines of buy domestic and save jobs into the story.

Linking to dividend paying stocks, the freight railroads are not a problem and their stocks continue to be good holdings. The suppliers of the railroads are being disrupted by the Chinese and it is hard to move freight yards which means some jobs will be lost. Even safe and secure mature industries can easily be disrupted so it important to mointor your companies to ensure if they make profits and how do they do it?

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

One of the suggestions you will hear is when investing have a broadly diversified portfolio and logically it makes a great deal of sense. Generally all sectors move on slightly different waves and one sector tends to be higher in the summer and another in the winter time. Owning both with get you the benefits of both. Recently an Arizona State University professor Hendrik Bessembinder published information which says 4% of the stocks account for all of the net stock market gains. The other 96% matched Treasury bill returns.

Tim Shuflet writing in the Globe and Mail says this study means you have to look at ETFs besides the low-cost (which is a very good thing) when you buy an index is this the best thing to do? One of the great thing about indexes is they exchange winners on the market for losers. This means over the long-term, the index will automatically do well. The concern based on the study is examining the performance of 26,000 stocks listed on the US exchange between 1926 and 2015, just 86 of those stocks generated half of the market’s wealth creation. Another 900 counted for the rest. The 25,000 names the market went up and down. The index will own names which do not do well. Professor Bessembinder says the top 86 perform so well, if you owned a diversified portfolio, the good ones can make a winner of your holdings.

Linking to dividend paying stocks, if you want to consistent beat the market, you need to focus on the top 4% stocks recognizing once in a while a high performer tumbles down quickly. If you own profitable dividend stocks, once in a while they will be in the high performers but are more likely to the 900 moving upwards on a year to year basis. Your total return of stock appreciation and dividends received will tend to beat the market but not necessarily a high flyer. You will not be exposed to higher risks and your most important issue with the company will be does it make money? then how? and is it sustainable for as long as you own your shares.

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

Everyday billions of people go their computers and begin a search, many of them use Google because it is fast, it has a clean front page and it was institutionalized by many teachers. Let start with google, although their are other search engines in the marketplace. Have you ever wondered how Google became the search engine that it is? A book called The Search – How Google and its rivals rewrote the Rules of Business and Transformed our Culture by John Battelle, published by Portfolio Books, NY, 2005 will give you understanding of how we go to where we are.

Google started out as a tech company with an elegant solution to searching information from the internet. It order to generate revenues it added the adwords and other advertising to its sites. Sometimes it gets it right and you are very happy the ads appear, sometimes you do not want the ads. The ads pay the bills and if you are the person buying and make a purchase those ads are worth more to the advertiser. Google’s search engine has to balance the two.

Over the years, Google has developed to other ventures and elements such as allowing for its employees to spend 10 to 15% of their time on personal projects which could help the company has lead to enhancing the services of google. In all industries, the company has to be at the right time the market values the company for what it was doing. In the early days of the internet, the value was number of subscribers and companies were valued on the number of subscribers. Then the market changed and began to pay for the number of subscribers who actually bought something and Google was in a great position to capitalize on the change in valuing tech companies. The linkage between adwords and search lead Google to a market leader and search cost pennies, ads cost dollars which means as long as people around the world trust Google’s search solutions, the company will continue to churn out money.

Linking to dividend paying stocks, one of the reasons people buy cigarette companies is the cost of cigarettes is pennies, the selling price is dollars, how can they not make money? It turns of investing, finding Google type companies is rare but once they are reasonably successful, the risk factor drops quickly and reward factor continues to produce for you and your portfolio.

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

Everyday billions of people go their computers and begin a search, many of them use Google because it is fast, it has a clean front page and it was institutionalized by many teachers. Let start with google, although their are other search engines in the marketplace. Have you ever wondered how Google became the search engine that it is? A book called The Search – How Google and its rivals rewrote the Rules of Business and Transformed our Culture by John Battelle, published by Portfolio Books, NY, 2005 will give you understanding of how we go to where we are.

When Google was being built the founders had to scrape for every machine they could find to support the early service, they were forced to optimize Google to run off-the-shelf parts- cheap hard drives, cheap memory chips, and cheap CPUs. Essentially they created a massively parallel formation of cheap processing and storage. The beauty of the system was it was very scalable – the more computers added, the better it ran. If a component part broke, it was swapped out. This approach is now called distributed computing, and since Google has evolved the system to its own operating systems on tops of its servers and even customizing and patenting its approach to designing, cooling, and stacking its components. In the server business, heat is an enemy. Sometimes having all the resources in the world, does not make you successful. Sometimes the less money you have to throw at a problem, the better it is. Although with Google’s credit rating and cash in the bank it can now afford to throw money at problems.

The distributed computing helped Google to become one of the largest data centers in the world, and when crisis happen, people turned to Google. This extraordinary asset is the ability to cache any information, at any time and show it to anyone on demand. This asset plus when the press used Google it worked and their lives were made easier. Since their lives were easier, the reporters used Google more than any other search and would mention the name Google when they did their reporting.

If you are curious or just want information, the ability to use Google search is limitless. This ability has changed all professions and reduced barriers to entering many businesses. Search is the new interface of commerce which allows for people to do many new and interesting things. It is also based on trust and fraud which is easier to do. In the past, many people only had access to certain amount of information and it was easier to find out if you can trust them. With search there is a great deal more information one can find out anything which can lead to fraud. It is easier to fraud someone, because you can find out about the person or their company. Google has to walk a strong line to trust the information and how the information is sorted. It also has to work on keeping the fraud to a minimum.

Linking to dividend paying stocks, with every endeavor there is an element of trust and fraud. The more dependable the information the more you trust it, but the more you trust it, the easier it is to do fraud. If you want an example of movie thinking of Trading Places with Eddie Murphy and Dan Aykroyd. In the movie the information to bring down the bad guys was misinformation. The bad guys thought they had information from the government sooner than everyone else, but they were wrong and lost their money. Buying or investing is often the trust and fraud element.

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