When travelling to other cities eventually many people go to the University of the place. Some of them we have heard about and want to see to the lands or the people – the last visit to Boston included a walk around Harvard (for example of all the law schools  in the United States the Supreme Court Justices went to either Yale or Harvard). A number of years ago, when in Montreal went through McGill University and saw the name Macdonald. It turns out there is an interesting legacy as outlined in the book Sir William C Macdonald – A Biography by William Fong published by The Macdonald-Stewart Foundation, McGill-Queens University Press, Montreal, 2007.

Macdonald was in the chewing tobacco business and similar to all businesses sometimes there are problems with suppliers. In this case the problem was a war – the Civil War. Macdonald had been at his business for a few years and the start of the civil war was a surprise to many people. However the problems did not start over night and it was possible to see the bubbles begin to break. Prior to the start of the Civil War, tobacco production was concentrated in Virginia with 90% of production coming from slave states and 56% of that coming from Virginia. Likely, Macdonald was doing business with one or more of the 50 odd plants in the state. When the North began to block the exports of the South the choices of tobacco was Maryland, Kentucky and Missouri. Although similar to all wars, the borders were porous. On the North side, Kentucky replaced Virginia as the chief tobacco producing state. From the manufacturer’s side, Macdonald was worried about receiving product for tobacco could not be stored indefinitely, and the quality as well as the quantity of the harvest of each year was crucial for profits.

No doubt there was much running around, but new supply routes for tobacco from outside the Confederacy were found. One of the reasons was a wonderful discovery. During the war, farmers discovered the traditional dark or black tobacco that everyone favored, had turned yellow due a lack of water. The farmers cured the leaf in the normal matter and found the tobacco yielded a sweeter product. This product help create a distinct tobacco which tended to favor Macdonald’s chewing tobacco line. After the war, Macdonald was buying tobacco from Kentucky and Missouri as well as Richmond, Virginia.

Linking to dividend paying stocks, similar to all manufacturer or merchants of goods, supply side of need goods plays a role in the company. Having alternatives is always a worthwhile and a needed part of the company. How does your company deal with its suppliers? When was the last time it looked at its major supplier and how did it deal with a crisis in supplying goods?

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

When travelling to other cities eventually many people go to the University of the place. Some of them we have heard about and want to see to the lands or the people – the last visit to Boston included a walk around Harvard (for example of all the law schools  in the United States the Supreme Court Justices went to either Yale or Harvard). A number of years ago, when in Montreal went through McGill University and saw the name Macdonald. It t turns out there is an interesting legacy as outlined in the book Sir William C Macdonald – A Biography by William Fong published by The Macdonald-Stewart Foundation, McGill-Queens University Press, Montreal, 2007.

Macdonald originally worked for a company in Boston and late in his life noted “I started working for a $1.00 a day and that day to the present I have always banked or invested half of what I earned” For most of his life, his furnishings represented this attitude and it was suspected for a number of years he earned more from his investments than from his salary. One of the areas he invested in were railway shares (the high tech of 1850’s).

Eventually, William moved from Boston to New York to Montreal and started a business with little competition. No one really knows why tobacco, but it is believed he made contacts while working in New York and Boston which were headquarters for cotton and tobacco factors. In the 1850’s people smoked cigars (but there was a lot of competition) and chewed tobacco (which was not competitive) for it involved a cost of machinery. He likely bought tobacco on consignment and then sweeten it up to provide his brand. For most of his career, he had two processes: his primary product was nicotine-laced candy, as it was sweet from the flavors (sugar, licorice and alcohol) and pipe tobacco, what was not used in the chewing tobacco process. Over the years the scale became larger the product was the same.

From the manufacturer’s point of view, chewing tobacco – whatever the source of the its leaf – was the ideal product. With its nicotine, sugar and other additives, it was essentially addictive, which ensured repeat purchases, and at times extremely fashionable, which lead to a proliferation of new product lines defined by flavor, packaging and target markets. Cigars typically appealed to the rich and urban; after the Civil War the public began to smoke cigarette and by 1895 they were more popular than chewing tobacco. But since tobacco chewing was habit-forming the new competition did not necessarily take business away from him.

Linking to dividend paying stocks, over the years cigarette companies have proven to be a successful investment, they went through a down cycle with all the government’s trying to sue them, but the companies are still doing business. As long as cigarettes remain legal, they will offer good money to be made. Perhaps, the cigarette companies are thinking about the marijuana industry for the results to continue.

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

 

 

In many countries around the world, one of the jobs for people is to join the armed forces or military. There are many skills which one can learn and hopefully, the world is at relative peace so you can leave with a pension. What happens next? similar to people around the world, the person can take advantage of the skills they have. Some with go into private security and mercenary. There is always a role for them, but it seems the role of the mercenary is getting bigger in the last number of years. In the Middle Ages, many kings paid for mercenary armies and while they were in power the people stayed, when they began to lose, they went home. Now days, the role of the mercenary tends to protect business interests in countries over than where the home office is. The assets lie within countries with shifting power at the top. In the world of the corporation – the desire for stability is a key. Among the countries of the world, the wealth tends to be more skewed than in the G7 countries so they is greater conflict. There are a variety of books about this subject and one of them is Fortune’s Warriors by James R Davis published by Douglas & McIntyre, Vancouver, 2002. In the book, Mr. Davis discusses his role in private security working for an entrepreneur who invests in relatively unstable, poor governments which have great mineral deposits. If he can mine successfully, pay off the required people, there is money to be made.

Linking to dividend paying stocks, in the mining sector which is going through a downward part of the commodity cycle, there are only a few companies which pay a dividend, but they are all in the search for relatively low cost minerals. The minerals are in many countries around the world and some do not have the same lifestyle as the one G7 investors live in. Should your home country protect the investors? It is an age old question which has tended to be yes they should. On Wall Street until someone comes with a higher bid, then you should protect them, when the bid comes higher accept the payment and move on. Sometime when you invest, you think you are buying a steady stream of income but in reality you are buying something more.

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

 

 

If you similar to me, you will have biases. One of my bias being from the northeast is generally paying attention to the world around me and the history of the area. If you asked about the civil war my focus would be closer to the Atlantic Ocean. If you check the history, the Mississippi River played an important part of the war – who controlled it, controlled many elements of the war. Many people know the Mississippi River is big through the songs of Old Man River; stories about Tom Sawyer; looking on a map to see the river flowing from Minnesota to the Gulf of Mexico passing cities such as St. Louis, Memphis and New Orleans. But how many think about the naval battles during the civil war? A book which does is Thunder Along the Mississippi by Jack D Coombe published by Bantam Books, 1998. Mr. Coombe argues the navy has been shaped by the battles on the river as it moved from wooden ships to metal ships. And as the Union began to control the river it forced the Confederacy inwards and towards having fewer resources of manpower, food and material from the western states.

In terms of strategy, it would appear the Confederacy rallied to arms then thought about how the war was to be fought. The Union States had manufacturing facilities which could be converted to war time production. In terms of the metal ships, the Confederates had few manufacturing facilities to fight an internal US war. Controlling the river for the Union meant a classic squeeze and yhey could slowly push the opposition into a corner to where the end was see able. The first victory was at Cario, Illinois and then the line to Nashville, Tennessee was secured and blocked. There were many battles on the river to control it and some of the battles involved a future President Ulysses S Grant which are outlined in the book

Linking to dividend paying stocks, most of us have a bias towards where we live. We see the world surrounding us and as you look for investment opportunities sometimes you have to look beyond your biases. Wherever there are people, opportunities can be found.

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

 

In a couple of months the weather will warm up and people will go to the ice shops to buy a sundae – ice cream, whipped cream, and toppings. If you love ice cream, you are looking forwards to buying at least one sundae. What if instead of ice cream, the shop put in meatballs? not the results you were looking for – Seth Godin in his book Meatball Sundae published by Portfolio Books, NY, 2007 saw many companies and organizations were producing meatball sundaes in their marketing execution. The reason is all the wonderful attributes of the web are added, except the organization had not changed to use and embrace what the web brings and does not bring.

Marketing is we make what we sell. Markets spread ideas, tell stories people want to hear and believe. Translate emotion into action to close the sale and make things people want to buy. The best available medium to reach the right people at the right time is used.

Trend 9  Direct Communication and Commerce between Consumers and Consumers

eBay is the beginning of a significant consumer to consumer connection in the marketplace. Consumers will gravitate to each other informing each other and pressure organizations for more of what consumers want.

Trend 10  The Shifts in Scarcity and Abundance

Your organization is based on exploiting scarcity. Create and sell something scarce and you can earn a profit. But when scarce things become common, and common things become scarce you need to alter what you do all day.

What use to be Scarce – luxury items; hard-drive space; manual labor; overnight shipping; airtime; shelf space; long distance phone service; knowledge about people

What used to be Abundant – spare time; attention; ability to pollute without consequences; trust; sufficiently trained workers; open space, clean water.

Think about the companies that had to change and the ones that adjusted there are many.

Trend 11    The Triumph of Big Ideas

In the factory based organization little ideas are the key to success. New Marketing in the noisy marketplace demands something bigger. It demands ideas that force people to sit up and take notice, but it needs to be embedded into the experience of the product.

Trend 12   The Shift for How Many to Who

Marketers can focus on who is hearing (and talking about) their message and no longer have to use the mass audience.

Trend 13   The Wealthy are like Us

We either do not care about the best then we want the cheapest or we want the best, which means the companies in the middle are having a hard time.

Trend 14  New Gatekeepers, No Gatekeepers

It use to be in order to get bigger, you need to work with the big companies, and big companies like to work with other big companies. The path has changed.

Linking to dividend paying stocks, the internet and how we use the internet to buy has altered many companies. It will continue to do so, but that does not mean companies can not adapt to take advantage of the internet. Does your company make it easy to find your services and products and can easily meet customer demand wherever they are? In most businesses, who the customer is? allows you to narrowly define it. In politics, everyone has a somewhat equal say with one vote – are you doing politics or business? Business maybe harder, but it can be more exciting because the people who you serve really love what you do and that is a good thing. Making a profit and paying a dividend is also a good thing which is why it is hard to find companies doing it over and over again.

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

 

 

 

 

In a couple of months the weather will warm up and people will go to the ice shops to buy a sundae – ice cream, whipped cream, and toppings. If you love ice cream, you are looking forwards to buying at least one sundae. What if instead of ice cream, the shop put in meatballs? not the results you were looking for – Seth Godin in his book Meatball Sundae published by Portfolio Books, NY, 2007 saw many companies and organizations were producing meatball sundaes in their marketing execution. The reason is all the wonderful attributes of the web are added, except the organization had not changed to use and embrace what the web brings and does not bring.

Marketing is we make what we sell. Markets spread ideas, tell stories people want to hear and believe. Translate emotion into action to close the sale and make things people want to buy. The best available medium to reach the right people at the right time is used.

Trend 5   The Long Tail

In almost every single market “other” is the leading brand. Consumers reward providers that offer the most choices. While there maybe a number brand, the market itself is a lot smaller. In any normal marketplace, if you give people more choices, revenue goes up.

Think about the Sears catalog – the catalog frees a retailer from physical constraint. By putting a retail store in millions of home you could profitably stock far more than you could in an average store. The internet takes that equation and amplifies it. It permits niche sellers to pursue the same strategy that Sears took but even deeper.

The secrets of the long tail are people who really care will find you and going to the trouble to make what someone wants is in itself a useful marketing exercise. It is not what you think the market wants or what you want to the market to want. It is about creating and assembling a collection of goods and services that captures the attention (and commerce) of the people who truly care.

Trend 6  Outsourcing

It is not just possible to find someone to make/code. do something for you quickly and cheaply; it is very easy. Just because you can outsource something does not mean always you should.

Two choices: either take every repetitive, by the book task in your organization and outsource it or give the people who do the task the freedom, the incentive and the imperative to something that cannot be outsourced.

Trend 7  Google and The Dicing of Everything

Google and other search engines have broken the world into little tiny bits. This means the end to end solution offered by most organizations is destroyed and replaced with a pick and choose component based solution.

The idea that one product line can subsidize another is built into the way many businesses work. The fact that middle men profit by bundling information or product lines or shelf space is at the heart of what makes so many businesses successful. Now bundling and middleman services are deliberately undervalued.

Trend 8  Infinite Channels of Communication

New forms of communication will continue to evolve.

In order for the consumer to make a decision, two things need to happen. The second is that he/she needs to determine that is it worth the time or money to take action. The first is they need to know about the opportunity.

In the old days you appealed to the masses in the hope to get the consumer. Now you trying to only appeal to those who are interested and with email you can do it more cheaply that ever before. You can advertise on those tiny slices of the market in which you have determined where you market is – those who are passionate about your products and services. From adwords, to blogs, to videos to searches it is about being selectively targeted.

Linking to dividend paying stocks, one of the methods to do your homework in deciding how to invest is the company doing the correct things to reach its customers? How well does the company know who is willing to spend money on their goods and services? Where is their profit margin? what companies are attacking their profit margin? Answering those questions will help in defining where you invest your money.

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

 

 

 

In a couple of months the weather will warm up and people will go to the ice shops to buy a sundae – ice cream, whipped cream, and toppings. If you love ice cream, you are looking forwards to buying at least one sundae. What if instead of ice cream, the shop put in meatballs? not the results you were looking for – Seth Godin in his book Meatball Sundae published by Portfolio Books, NY, 2007 saw many companies and organizations were producing meatball sundaes in their marketing execution. The reason is all the wonderful attributes of the web are added, except the organization had not changed to use and embrace what the web brings and does not bring to the marketing abilities.

Marketing is we make what we sell. Markets spread ideas, tell stories people want to hear and believe. Translate emotion into action to close the sale and make things people want to buy. The best available medium to reach the right people at the right time is used.

The new marketing or use of the internet means it favors some approaches over others. However, new marketing also demands better products, better services and better organizations. It also means in a world of choice, few will pick good enough. Avoid compromise.

Hopefully you will see companies capitalizing on the trends for the book is now almost 10 years old, but likely you will see companies still trying to figure it out.

Trend 1  Direct Communication and Commerce between Producers and Consumers

Organizations hear more directly from consumers. They gain a permission to market directly to them and they can create products for their customers. (the good part)

The need to change in organizations mean a retailer understands making a customer wait leads to lost opportunities. Inbound communications from consumers demand speed in answering and consumers have been trained to expect that they should be able to work directly with the person who can make something happen and that should happen almost immediately.

If someone sent an email to your president? what would happen to it?  Is it a missed opportunity to start the conversation?

A typical direct mail campaign earns 1% response rate. For every 100 letters one response.

A typical email campaign can get 20 or 30% the response rate.

Therefore the challenge is to see customer interaction as a profit center.

The marketing should start at the reachable then do your best to build the group ever larger by serving them and tell stories which appeal to them.

Trend 2  Amplification of the Voice of the Consumer and Independent Authorities

In a market where everyone is a critic, the need to create products that appeal and satisfy critics becomes urgent.

Consider the 1%. Not the richest 1% but 1% of the community are the givers. If you listen to talk radio only 1% are the callers, however you do not know who they are? You do not know who are the customers and who are the prospects, the ones who need to, love to and want to post their experiences. You have to assume every interaction is an interaction with a critic.

Every business has its 1%. Every business has a group so motivated, so satisfied, and so connected that they want to tell the rest of the world about you and what you do. As a marketer your challenge is to give these people a megaphone to spread the news.

Trend 3   Need for an Authentic Story as the Number of Sources Increases

Consumers hear about organizations from many sources. You have to get your story straight – say one thing, do another fails because you will be caught, someone will notice and bring it to the attention of the web.

Spread stories not facts – as long as the organization from top down lives and believes their story ( a unique story and a story that resonates with their customers) it is easy to spread the story.

Trend 4 Extremely Short Attention Spans due to Clutter

With the amount of choice we are offered, we tend not to spend too much time at one thing. This means the personality of your product on the shelf matters. It means every interaction with a consumer is a make or break proposition. You do not get the chance for a learning curve. You do not get the opportunity to have the user overcome initial discomfort.

Linking to dividend paying stocks, often times these companies were making money under the old marketing environment. The old method allowed them to do make good things including being profitable and paying dividends however the organization is likely the hardest to change, to see what is happening through the use of the internet. There are many examples of not doing in right or writing off campaigns that were not successful. If they are not doing it right, then looking for alternatives is your challenge.

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

 

 

 

 

 

 

The hardest thing to do is not spend money when the boom is on. We all know commodity prices go up and down, we all know cycles will go through the market, but we do not know when they will stop. One of the great examples is the mining industry, from 15 plus years the growth of China propelled up commodity prices which meant money was flowing into the big global mining companies. This meant they were buying up more resources, often not close to their core assets because they could. With the increasing commodity prices, deals were coming and closing and everyone in the system was happy. China has slowed down their growth, and the major mining companies are awash in debt. Anglo American company is in debt $ 5.6 billion and CEO Mark Cutifani said part of the problem was we spent money on stupid things. To get out of the mess, they do have some great assets ( relatively low cost mining and huge reserves) and will have to scale back the size and scope of the company. Assets that were bought near the height of the commodity boom will have to be sold.

Linking to dividend paying stocks, when the purchases were made and expenditures to bring the assets to market, there were many reports which showed the large number of pluses why the spending should be done. There were very few negatives, for the forecasts did not know when the cycle would change. When the cycle began to go down and prices fell, Anglo American kept spending for the clues were not obvious (although hearing about ghost cities in China seems to be a good clue). When the decline happened all the global mining giants felt the pinch of lower commodity prices, some a little better than others, but what do you do when the market collapses? The lesson might be when the boom is on be prepared to exit quickly for the downtime will be years to work through, maybe next year is a great time to buy the best assets at a healthy discount.

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

While watching an old version of the Count of Monte Cristo movie staring Richard Chamberlain (1974) there were a number of events where lessons are learned. The book written by Alexander Dumas in 1844 has numerous screen adaptions and is a great story. In the opening scene of the movie is a celebration for a ship has arrived in port. What it really represents is the merchant(s) invested into a ship which went to India from France ( about a 2 year journey) to buy spices. The ship has returned and the spices hopefully will be sold at a healthy profit and the owner will stay in business for another voyage. The celebration is both for the crew and the merchandise.

In another part of the movie, the central character Edmond Dantes is thrown into an off shore prison where the inmates are forgotten and eventually meets a fellow inmate who gives him a map of potential riches. The theory being finders keepers – if you can go to the island and find the treasurer it will be yours. This of course expects the finder would know how to convert the treasure to currency of the country he or she is going to live in.

The central character Dantes has paid for the Count of Monte Cristo title, this means the wealthier you are, the more titles that are available to you. Those of us who have no titles are suppose to be impressed with a title, but it could just mean you are a friend or have done something good for the King, in many countries around the world where a monarchy can be found, titles can be bought.

The downfall of one of the “enemies” of Dantes was insider trading. However for the plan to have worked, the Baron had to have used inside information to become rich and stay that way. In the book Dantes used inside information to trade against the Baron and the Baron proves he is not that good of a banker for he robs a Hospital fund and runs off to another country.

Linking to dividend stocks, even watching movies there are lessons to be learnt for example: slow and steady gains makes fewer enemies. In the movie, the Dantes character originally only wanted to be ship captain for his income would increase and he could buy a small house for his father and marry his girlfriend. In the end, he finds treasurer to buy estates but his father has died and his girlfriend has married and is no longer is for him. There are trade offs but one thing you do not have to trade off is income plus potential capital gains but sticking to profitable stocks and holding them for their dividends.

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