One of the most fiercely independent elements left for every person is how much money the person makes and how they spend it. We report to the government on our individual cases at tax time, but we seldom tell anyone else and since we do not tell, people speculate how much we have or do not have. In many families and schools – somehow speaking about finances seems to be a secondary issue, it comes up only when there is something wrong. Rob Carrick who writes about Personal Finance in magazines, government commissions and in the Globe and Mail asked a variety of people in the financial services industry why do people fail with money? The reasons are varied as the people for there is no correct answer, except for generally the concept is people are earning more than they need or should have savings. Many of the answers do not relate to the people at the low wage income how are barely getting by, with that said, we can move on. The reasons in general are:

1. Finding satisfaction in spending and consuming rather than saving. It is true some spend more than others, they are the drivers of the consumer economy and in general that is a good thing. It is true depending on where you live, there will be a “keeping up with the Jones” meaning if your neighbors have new cars and have done new renovations, you are more likely to do the same. If you lived in a different neighborhood you might do them less. If you do have this problem without savings – you need to do forced savings. One method is set up with a bank and deposit money into a mutual fund once a month and let the fund grow. If you pick a fund ensure its fees are low.
2. Not starting early enough. The idea here is to use compound interest rates to do most of the work. The problem is most people start with a little and it takes years to grow, the largest growth is after the fund has accumulated to a size, for example if there is $1,000 in the fund and you gained 10% (for easy math) you would have $1,100. Ten years later when it goes over $10,000 then you have $11,000 but when it reaches 100,000 then you are getting $10,000 and you can see it easily going up as the years go by. Rather than pay compound interest rates to the credit card company you earn them.
3. A flawed savings program. Most of us expect to live more or less similar to what we are doing now. In terms of income and health and family obligations. When they change most of us have few options and there goes the savings. The solution save regularly not just when it is convenient.
4. Risky investments. Once you accumulated savings a multitude of options are available for you and come to you. You may have a family member or relative in need of capital to invest in their business. Sometimes you win, sometimes you lose. Not losing your money should be (and it is hard) but not losing your money should be your investment strategy.
5. See the title of this blog, many people hope things will take care of themselves. If you own a house and live in the correct neighborhood and housing prices rise before you sell, then the strategy may very well work. If you do not live in the desirable neighborhood then maybe just maybe you have to be proactive or ensure you can live on  less money. There are many free things – the best is a walk in nature.

Linking to dividend paying stocks, these stock will help your investment strategy because you are investing in the profitable companies and be paid a dividend for your holdings. Over the long term, the stock values of the companies will rise and you will have more money to do the things that are important for you.

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

 

Before lotteries became our game of chance, the track was the next best thing. At the track there are many people who represent all kinds of analysis towards either breaking even or making a little more to dreaming of a winning on a longshot. There are generally very good reasons why the horse is a long shot. In a movie made in 1985 Tim Conway, Harvey Korman, Jack West and Ted Wass stared in a MGM movie called The Longshot. The 4 characters are friends who regularly meet at the track, usually bet $2 or $5 on each race and generally broke even, but in the back of their minds are the thoughts of winning the long shot to change their lives. Each of them would have something a little different to spend the money on, but to go to the track on a regular basis is to think about the long shot and the potential winnings. In the movie, the gentlemen know that the inside confidential information on who will win and who will not win, rarely comes to them. They seemingly have a tip, which to them is the big tip, the one tip they have been waiting all their lives for – do they go for it or not? The questions rarely change and make the movie fun to watch.

Linking to dividend paying stocks, over the years and through various people being charged for trading on confidential information, people trade and benefit from inside information. Most people have some sort of information, they know a little, however whether the information is enough to move the stock materially and you could actually make significant money from the information is an unknown. One of the methods you can do this is buy options for calls and puts, of course if this is the only time you buy the options the regulators may notice. A better way to invest is try not to lose money by investing in profitable companies which pay a dividend will allow you to increase your wealth. When the general market goes down, you buy the best companies you can and watch the companies rise as the markets rise for when the general market is down, there is a flight to quality stocks or the best stocks. On your entertainment budget – play a lottery who knows maybe it will happen to you.

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

Hoosiers is a nickname to describe Indiana basketball and is a movie about a small town against all the odds, the high school basketball team went to the State Final and won. The movie is from MGM and made in 1986. In Texas, Friday night football is the big event of a community, in Indiana basketball has the same affect. Sports play a role in community and when it works, there is nothing better to bring the community together and Hoosiers the movie represents that viewpoint. In the small town world, although it seems relatively simple, there can be various undercurrents for things that happen recently and faraway.

Besides the Cinderella story of a 7 person basketball team going all the way to winning the state championship against the a more powerful, wealthier and recruited team; there are other lessons to learn. In the movie, the coach is played by Gene Hackman whose character was a college coach with a winning record and wants to win more than anything else. When he coaches the small town team, some of that comes out; as well as the desire not to do it again – maturity and the love of the game are also important. The other lessons – the focus on the fundamentals, the combining of the group to be a team, to break down the team at the start of the season to build them up; the measurements of the hoop and key when they reach the building where the state championship is held.

Linking to dividend paying stocks, while the desire to buy a stock not on the radar and as it grows to become a leader you would benefit financially, you have to recognize these are rare examples (Wal-mart). An easier process is to look for a mature management that has desire to grow the company and loves doing what the company does. You should be able to find more of them and they will benefit you, with limited risks.

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

Everyone in the world can create art, most of us do not do it well enough to make a living or even to think about making a living. Many of us earn a living doing something else and we can buy art. Everyone was a different view of what is art and the book What Are You Looking At? – the surprising, shocking and sometimes strange story of 150 years of modern art by Will Gompertz published by Dutton, NY, 2012.

In the book is a wonderful paragraph – if 10 people were to stand on a hill and take a photograph of the same view, using the same camera, the results would be near identical. If the same 10 people sat down for a few days and painted that view, the results would marked different. Not because one individual might be a more accomplished artist than another, but owing to the nature of humans: we can all look at the same view, but we do not see quite the same thing. We bring our own unique mix of prejudices, experiences, tastes and knowledge to any given situation, informing how we interpret what is before us. We all see the things we find interesting and ignore those that we do not.

Much of modern art is doing something different than expected. It is a new way to look at that viewpoint. Most people start with the old masters and landscapes – they are easy to relate to. Modern art would look at the landscape and ask what is the most important thing – could it be enhanced? does the viewpoint have to be exact? or what is the viewer  focusing on? If the answer is yes it could be, then you are open to new ideas or at least a different one. If the answer is no, then you keep to the old style. The great thing about modern art is there can be no wrong answer, except for if you are buying for enhanced values in the future you have to believe either in the greater fool will pay more or the art really will be worth more money in the future. Sometimes it is hard to tell.

Linking to dividend paying stocks, while profitable companies never go out of style, the names of them do change over time. A simple exercise is look at the Fortune 50 stocks in the year of your birth or your father’s birthdate, when you are 25 and 50. The names on many companies will have changed for a variety of reasons, which is the reason why you need to review your portfolio on a semi regular basis. Ask your yourself how does the company make profits? and what is the outlook for continuing to do so? If the answers are remain easy to answer then it is possible to keep them or do nothing and watch the dividends flow. If the answer is more complex, there are always alternatives in the marketplace.

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

 

 

 

One of life’s joys in spring time is after plants have been sleeping for the winter, they awaken and flowers brighten up the landscape. Different flowers come throughout the year and wait till the winter’s frost to go back to sleep. As the snow has shown itself in the northeast and around the country, it is good to read a book about flowers. An interesting book to read is The Reason For Flowers – their history, culture, biology and how they change our lives by Stephen Buchmann published by Scribner, NY, 2015.

While many of us in the urban areas may grow a little food, the reality is those that grow plants we grow for the colors and odors. This is not a new thing, we know that the Egyptians, Chinese and Aztec all loved flowers, which means whatever you do in your garden is the correct way to do it. Flowers have also been associated with the dead – burials and love – weddings and Valentine’s Day. In addition if you go into a department store – the main floor will have many fragrances for you to try – all have a base of flowers petals. Gathering all those flower petals helps understand why perfume is expensive (as well as someone must pay for the marketing dollars). Flowers have a long history in terms of their language – to give a flower represents something (hopefully the other person knows) as well as flowers are highly represented in art and literature.

Linking to dividend paying stocks, where the flowers come from has changed over the years and how new ones arrive changes, the color and odor of the flower remains. We are drawn in although unlike the bee we are not the pollinators, but we are drawn in for the same things people have always been drawn to flowers. In your investing style look for consistency and you will be drawn to dividend producing stocks.

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

 

One of life’s joys in spring time is after plants have been sleeping for the winter, they awaken and flowers brighten up the landscape. Different flowers come throughout the year and wait till the winter’s frost to go back to sleep. As the snow has shown itself in the northeast and around the country, it is good to read a book about flowers. An interesting book to read is The Reason For Flowers – their history, culture, biology and how they change our lives by Stephen Buchmann published by Scribner, NY, 2015.

While we enjoy the colors and varieties, the number one reason for flowers to have color is to attract attention from pollinators so they can have sex. Inside the colorful petals of the flower will be a pistil with an ovary at the bottom and stigma at the top. The plant is looking for pollen from another to reach the stigma to generate more plants. The reason for outside pollinators to visit a plant is they receive a reward. The reward is usually food in the form of nectar, pollen, floral oils. The animals such as bees love nectar and have parts of their body to pick it up, collect pollen and drop off pollen in the plants which makes it a win-win for all.

The author studies bees for a living and makes the book exciting to read. Bees are the world-champion pollinators because of their ancient specialization upon flowers, their ability to learn and manipulate complex floral signals, shapes, colors, and odors. Sometimes they fly for miles, the plants deposit pollen onto the plant when they come including in places the bee can not reach or forget to look for it. This pollen is the stuff that goes plant to plant and helps to form new plants. The bees ability means for commercial agriculture – their hives are near by for nearly 2/3s or about $ 10 billion of agriculture is dependent on the bee.

Linking to dividend paying stocks, the more complex the world looks, the harder it is to find the simple facts. In the world of agriculture which looks to weather as the prime factor, we really should be asking is their enough bees? if there is, then weather can be the next discussion. The plants and flowers grow to attract the bees to grow the plants.  Continually try to find the simple in the complex allows it to make decisions easier. In investing the simple is profitable companies which can pay a dividend will be good investments.

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

Most of us worry about things local first. Whether that is our neighborhood, state, country or history of our ethnic group. Afterwards we worry about the rest of the world and want to learn. For me, part of the rest of the world is the island of Taiwan. Besides knowing that it was pro west, while China was communist, and where on the map it is, the reality is little is known about the island. Part of the history of Taiwan is between 1895 and 1945 the island was run by the Japanese for its resources. Similar to many conquering countries, the resources were more important than the people. There are many good things the Japanese do for the world, however their methods to suppress the invading forces goes beyond most of the “developed” countries. Part of their reasoning was they saw the natives as savages and anything goes when anyone looks at other people as savages. In 1930, the native tribes held the mighty Japanese forces for 50 days in an uprising. The natives had their knowledge of the land, the ancient traditions, and machetes. The Japanese in 1930s had the complete arsenal from planes to cannons to machine guns to fully trained armies. Part of the native strategy was to capture and use Japanese guns. At the end of 50 days, the tribes were banished to a remote island.

Linking to dividend paying stocks, no one will ever know if the Japanese had treated the natives differently, different results would have taken place. For dividend paying companies the question is always what do you do about the competition? Do you crush them? do you allow a little? how much is too much? An easy method is to ensure government regulations (the thing people say there is too much of) always ensure government regulations favor the company first and makes life difficult for the competition. If the competition can spend most of their energy on defeating government regulations, it should be easier for the dividend company to defeat it in the market place (where it really counts).

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

A couple of months ago, there was a bombing in France and after grieving for a few days, France unleashed its fighter planes bombs against who they thought were the enemy. It was normal reaction by countries around the world and often thought as the best action. In reality, it feels good for the time but does not solve the problem. The US has engaged in combat missions in the Middle East for sometime and when they first went in – their reaction was similar to France. We will go in, use our superior weapons and eliminate the threat and hopefully go home. The hopefully go home is still on the to do list, but is not coming as soon as the US wanted to. In the book Counter Strike – The Untold Story of America’s Secret Campaign Against Al Qaeda by Eric Schmitt and Tom Shanker published by St. Martin’s Press, NY, 2012, the authors tell a new story on how to fight the enemy. It used to be countries went to war and countries could be seen on a map, with a capital city and a government running the country. The war was typically fought within the country and one could target the enemy. During the fight against Al Qaeda, the leaders do not have a country, they have safe houses in many countries, this makes the fight more difficult. In the book, it took the US about 5 years to adjust because the Secretary of Defense was frustrated and want to hear different ideas. The idea was if it takes a village to raise a child, determine the networks and go after the weak leak link till you have located the leaders.

That statement sounds simple, but it is very complicated to do, because one has to learn about the networks. The networks stem from leadership, recruitment, financing, information and people. After learning the networks than one can use tap into to try to counterattack the opposition. Sometimes breaking up a threat is more important than killing someone. It also means a reliance on information – the gathering, the analysis to determine patterns and occasionally finding a treasure of information. One of the many new devices is the ability to tap into your phone, look at your calls to see if you had called or received calls from known “bad guys”. Most people in the world tend to behave in patterns – it works for them and why change it. If governments can recognize leaders patterns, it makes life a little easier to track and eliminate the leaders. The billions of dollars being spent are about trying to find patterns.

Linking to dividend paying stocks, most investors start with a theory and then branch off, while everyone would like the biggest payoff first, over the years you will have both dogs and stars, hopefully you will remember both. The reality is life is about a village and building networks and taking advantage of opportunities as they come to you. One method of taking advantage of opportunities is not to lose your money investing or using dividend paying stocks for both dividends and capital gains.

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

 

 

 

In the 1950’s, the United States was the most powerful country in the world and tended to believe an American investment in any country needed to be protected. This has always been a strange idea, because it does not say the investment needs to be protected because it represents the best of the country, just an investment. In the Central American country of Guatemala, United Fruit had an investment in over 500,000 acres of land to grow bananas, as well as it owned the railroad, ran the ports, and telegraph. The story of how the rest of the story plays out is outlined in the book Bitter Fruit by Stephen Schlesinger and Stephen Kinzer published by Doubleday, NY, 1982

When democratic countries invade other countries they just cannot make the decision to send troops. The government needs the will of the people. For many in the US, besides knowing Guatemala is south of them, they probably could not tell you very much. In all likelihood, they would confuse Panama with Guatemala – Panama has the canal and is 800 miles south. To begin the process United Fruit hired lobbyists and PR people to tell a story, that would not lie, but not exactly tell the truth, after all United Fruit while delivering bananas to the US was not a perfect corporate client. It did bribe the government; it did treat pay labor slightly better than minimum but hated unions or threats of unions; employment was seasonal; there was little regard for health and safety when spraying the crops; the company paid little in taxes and sent most of its money to Boston or head quarters; it did what it wanted to in the country for the benefit of United Fruit or the benefits for Guatemala were marginal.

The lobbyist and PR people sent information to all the newspapers. The information polished the good image of the company. The company being from Boston tapped into its Board and connections to Washington for the House and Senate representatives to comment on the situation. If the Senator talks about the issue, it will be reported on by others. During the 1950’s McCarthyism was building or being afraid of communists – the government in Guatemala was left leaning (not communists) however this could be the first place where communism could start – need to stop it. The anti-communism tact had friendly faces in some newspapers or magazines and stories began to appear. One magazine was called The New Leader. The editor wrote a book called Red Design for the Americas and the company bought and sent copies to opinion leaders.

Newsletters was designed to create an atmosphere of deep suspicion and fear and when those arrive they begin to formulate a plan of action. In the meantime, the government of Guatemala did little to present its side of the story. The phases grew with a report by Clements Associates (who were close to the CIA and military) to write a report about Communists infiltration in the Guatemalan government. The report was called Report on Guatemala 1952 was sent to all members of the US Congress; the Report on Central America 1954 was sent to the CIA and the solution was a change in government. The cost for United Fruit was $ 500,000 a year. Likely if they had used the money to improve working conditions different results might have happened. Eventually the US decided to act, but found few communists.

In retrospective, trying to distance himself from United Fruit, the Eisenhower administration Department of Justice had reached the conclusion that United Fruit monopoly on banana exports from countries like Guatemala was a violation of American antirust laws. The agreement was settled in 1958 which United Fruit had to sell to local companies so there would be competition. In another lawsuit, United Fruit had to sell the railroad and in 1972 sold its lands in Guatemala to the Del Monte corporation.

Linking to dividend paying stocks, for a long time United Fruit was a wonderful company to own for it held a monopoly on bananas as well being vertically integrated owning a railroad, a fleet of white ships and ports. When the monopoly was broken, it was time to exit the company. Sometimes the focus is on other things than the operations of the company, when you see this become nervous.

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