If you watch business shows on TV either Shark’s Tank or Dragon’s Den you will have seen Robert Herjavec sitting on chair 5 and offering good advice and sometimes offering money. Mr. Herjavec was written a book called Driven – How to Succeed in Business and in Life published by HarperCollins Publishers, Toronto, 2010.

Chapter 1 Know a Good Deal when You See It

Mr. Herjavec tells a story about a possible closing when an advisor to the group began to ask questions and not show respect. As this happen, Mr. Herjavec tore the cheque up and said, if the amount is so small write a cheque yourself. The lessons are you do not bite the hand that feeds you. Venture Capital is too difficult to obtain. More importantly, do not assume that every business idea you have is worth a million dollars on its own. Because it is not.

Chapter 2 Appreciate What it Takes To Succeed

I admire the people that come before me because no matter how badly conceived and poorly presented their venture may be, I admire them for their determination to take risks and their preference to play the role of entrepreneur over that of employee.

One of the most important elements for success in business is the ability to communicate your concepts effectively to a wide range of people, including investors, employees and customers. If you do not get your concept easily for investors, why would consumers buy the service?

Chapter 4 Put Yourself in the Investor’s Shoes

• Things that People Do Well when Pitching a Deal
• Engage us quickly – you really only have 30 seconds
• Maintain a pleasant demeanour – be persuasive without being pushy
• Bring us a great idea – one that is original and appeals to a defined market
• Know how to make a good presentation – back up you pitch with solid facts and figures
• Have recorded actual sales or have a realistic plan to generate them – nothing succeeds like sales
• Submit a reasonable valutation of thie idea or company – it does not pay to be greedy

Things that People do Badly

• Fail to be honest – pitches are followed by due diligence
• Do not know their market – wise investors do not put money in things they do not understand or the person seeking the money does not understand
• Have recorded no sales
• Are unrealistic about growth
• Become rude
• Use sex

Linking to dividend paying stocks, whatever you do the process does not change to a great deal, inside a company divisions are expected to grow and how are they going to do it, the senior people have to make a pitch to their higher ups or this means all employees likely have an idea(s) which could translate into higher growth. How does a company tap into its workforce? How well are the new products?

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

The Baby Boom or those who were born after World War II have influenced the economy from the day they were born because of the numbers. When they were young a demand for new schools occurred, as they were older the expansion of the post secondary institutions and then into the workforce where many new jobs were created. As their normal lives have come they are beginning to reach retirement age. This is the magic number which the government begins to pay you because you are 65 or older. For many, they have pension plans which begin to pay and for a good number they will have personal savings or investments. If they were fortunate to live in the good area, the value of their homes has increased which could be sold and the money invested. When someone goes into retirement, the amount of leisure can go up. What will this group do or not do and because the numbers of seniors will increase, what they do or do not do will have an effect on the economy. This is the premise behind the book The Leisure Economy by Linda Nazareth published by John Wiley & Sons, Toronto, 2007.

What we do know is the Baby Boomer senior will have some that struggle, some that are content to not to spend, some able to spend on something and some able to spend on everything. Much will depend on health or the perception of health; if the person feels healthy they are able to do just about anything. Traditionally baby boomer families (2-3) are smaller in size than the families they came from (5-6) – the grandchildren maybe spent upon. In theory the leisure economy means people have more time, but errands can seemingly take up more time to do. In general, they are still people and do all the same things people generally do. If they love it, they spend more time and money on it. Occasionally waves happen, when they seemingly do something at once.

Linking to dividend paying stocks, theses stocks always feel pressure both in terms of market and attracting people to work for them. The market tends to change and companies have to be adaptable and with the hiring of the workforce – the next generations will typically not give as much to the company as the past generation did.

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

Many years ago and the sentiment is still true John Maxwell an analyst on Wall Street said, the cigarette industry said, only the mint makes more money easily than those little white tubes. As an investor those words are music to the ears, as a person in society you may or may not want to invest. We all know cigarettes sell nicotine with the tobacco which makes them addictive and for some to have health problems. In the book Merchants of Death by Larry White, published by William Morrow, New York, 1988 the industry is examined in a less flatteringly way, but reveals some of the classic elements of monopoly control.

For years, people knew cigarettes were additive but few knew why. People who smoked found it very hard to stop smoking and the health affects were years in advance. When filters were invented and put on the market, people felt the companies were trying to ensure their health was protected. It turns out, filters did not help as much as people thought they did. Essentially one cigarette is the same as another – it really depends on which additives are added, but because of advertising people believe brands are different. From the companies stand point – one person said I like cigarette advertising. It’s advertising in the purest sense – no product difference but a perception of difference in product. To achieve this perception difference for many years the cigarette companies were the biggest advertisers in the US. In 1984, the companies spent over $ 2 billion on advertising or $ 35 for each of the nation’s 56 million smokers. The good news was smokers tend to stay with one brand for their lifetime. Advertising has two purposes: brand competition and increasing the total number of consumers of a product. The companies looked to women and children who when they started were not likely to stop.

To combat the potential lost of advertising, the companies tried a variety of strategies. If an ad does not look like an ad, is it an ad? The constitution was brought forth – is advertising protected by the First Amendment? or wrap yourself in the flag. The companies ensure some of the advertising went to non-profits in arts and culture. The companies sponsored university research or the science to show cigarettes may not be the only problem, but what if it was linked to other things a consumer did?  In addition the company always used the term good corporate citizen, as well as use some of the billions to try diversification (although from an economic point of view the majority of profit was and still is comes from cigarettes). One affect was very few advertising companies did  anything against them – for they knew what side of the bread was being buttered.

Linking to dividend paying stocks, the tactics used by the cigarette companies are the same used by large companies everywhere when faced with potential legislative changes. The companies have the ability to spend money on strategies of delay until the problem is less and their penalties are reduced. While as investors we hope our companies do little wrong, sometimes they do but it is legal.

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

 

Many years ago and the sentiment is still true John Maxwell an analyst on Wall Street said, the cigarette industry said, only the mint makes more money easily than those little white tubes. As an investor those words are music to the ears, as a person in society you may or may not want to invest. We all know cigarettes sell nicotine with the tobacco which makes them addictive and for some to have health problems. In the book Merchants of Death by Larry White, published by William Morrow, New York, 1988 the industry is examined in a less flatteringly way, but reveals some of the classic elements of monopoly control.

The cigarette industry is dominated by 6 companies – Philip Morris, RJ Reynolds, Brown and Williamson, American Tobacco, Lorillard and Liggett. Although tobacco has been known and grown for as long as the US was discovered by  Europeans  The native Indians were using tobacco and John Rolfe the husband of Pocahontas was the first major grower of tobacco. It was not until 1881 when James Bonsack invented a a machine to produce 120,000 cigarettes a day combined with James Duke’s  understanding what the machine would mean. Mr. Duke tied Bonsack to a series of unbreakable contracts guaranteeing Duke prices and royalities 25% lower than the competition. Duke expanded both by buying smaller companies as well as expanding the market and by 1900 he had an effective monopoly on tobacco.  In addtition, in terms of cost of tobacco, because many of the growers were small farmers, they counted a great deal to the representatives they sent to Washington. As the years went by, the representatives were re-elected and slowly became overrepresented in length of service and being Chair of the committees which run Washington. The clout ensured both the manufactures and growers were given a subsidy and the manufactures received the greatest amounts.

The news is not always good, the height of the cigarette smoking was in 1964 helped by GIs were given free cigarettes during the war. In 1964 people slowly began to try to quit or not smoke, however in 1986 the companies were earning returns in the 20% on their sales. The  money continues to roll in during the 2000’s.

Linking to dividend paying stocks, it is hard to overlook the tobacco companies because the cigarette industry generates billions of dollars and produces a continuing dividend payment not matter what part of the economic cycle the economy is in.

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

 

 

 

 

 

 

 

 

 

We all like to hear, read or watch movies where the bad guys particularly if they are not from where we are located are caught and the world is seemingly a better place. Among the many movies with this theme is Z which is loosely based on a 1963 assassination in Greece Those of who live in democracies for all their faults, still believe even if the person has left or right leanings they should remain alive for the good of the country. Depending on our opinion of them, when they leave politics or die the morning can be very short. In the movie Z , the attorney general sends one of his young aids to quickly ensure the myth matches the reality, however reality turns even under the threat of violence. Petty jealousy, not seeing the big picture (or future career) and seeming very similar descriptive sentences leads the attorney to bring to trial a number of the conspirators in this case the accused include police captain and his deputies. This seems like a good thing, except when their sentences are shown on the movie – the bulk of the individuals received a slap on the wrist and life carried on and the attorney went to private practice.

Linking to dividend paying stocks, these stocks are similar to the established political party for even though many think there is a distinction between politics and business, the ability to continue the business means the threads run thick. This is why established companies seemingly like stability, similar party continuing to win. They may or may not support them directly but indirectly it is relatively easy to see the benefits for each. Stability means the rules favor the existing companies.

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

When you think about great publishers of newspapers, you often think of men, however there are a few women which rise to the occasion and dominate. One such lady was Cissy Patterson who life was written about by Amanda Smith in the book Newspaper Titan – The Infamous Life and Monumental Times of Cissy Patterson published by Alfred Knopf, NY, 2011. In the book half of Cissy’s life it read as one of the ladies who was born to marry and have sons to continue the family business. The family business was newspapers and her grandfather had founded the Chicago Tribune which was the most widely read newspaper in the Midwest. Her grandfather was Joseph Medill who linked the paper to the Republican Party and Abraham Lincoln. His daughter married Robert Patterson who became the editor and part owner of the newspaper group.

If you read the New York Daily News this is part of Tribune group because the son and brother of Cissy founded the paper in 1919 as a paper similar to the ones he saw in the London, UK when he was in WW 1. The paper repaid its debt in 1920 and circulation rose to over 2.2 million by 1946. In the print business, if someone sees somebody doing well they launch a competitor for example Liberty was the competitor to Colliers and the Saturday Evening Post although losing money will soon lead to closures.

In the book, Cissy became the editor of Washington papers –  and help propel them to the number one in paid circulation. This was at a time when Cissy was the only women publisher of a major newspaper in the US. Part of the role of the publisher is to balance the interests of those who are the largest advertisers which tend to mean the wealthier people in the area and the desire to print what people enjoy reading – something about their lives. In the case of Cissy her wealth put her in the 1% as such much of her life in Washington revolves around the White House and Congress.

Linking to dividend paying stocks, in the days before the wide spread of the internet, to own a newspaper was to influence public opinion and to gain access to those in power. It maybe the same today, but the easy relationships to large advertisers have changed, which is why the newspaper business is a tough business indeed, although there is healthy role for newspapers.

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

 

When you think about great publishers of newspapers, you often think of men, however there are a few women which rise to the occasion and dominate. One such lady was Cissy Patterson who life was written about by Amanda Smith in the book Newspaper Titan – The Infamous Life and Monumental Times of Cissy Patterson published by Alfred Knopf, NY, 2011. In the book half of Cissy’s life it read as one of the ladies who was born to marry and have sons to continue the family business. The family business was newspapers and her grandfather had founded the Chicago Tribune which was the most widely read newspaper in the Midwest. Her grandfather was Joseph Medill who linked the paper to the Republican Party and Abraham Lincoln. His daughter married Robert Patterson who became the editor and part owner of the newspaper group. As readers of newspaper we often forget our favorite newspapers have biases, but they do and the newspapers are in the business to make money and some do very well. The Chicago Tribute thrived in the market and the Patterson wealth became part of the 1% in the US which means they had mansions in Chicago, Washington and Newport. At the time of the “robber barons” the Patterson were well familiar with many of them. Cissy lived could have easily been one of the 400 special people in New York but she fell in love with a Count from what became the USSR and had an interesting time in Europe at the time of many Kings and Czars. Counts have the title to land or people in villages paying rents to the landlord, but in all countries not all the land is equally as productive and profitable as others. The Count had a relatively minor holding, but Cissy was in love.

Linking to dividend paying stocks, when Cissy married the Count he was living well beyond his means (had mortgaged the properties a number of times) and was fortunate that Cissy’s family was able to pay a generous allowance or dividends on the stock holdings. The Count was not the best of husbands for a number of reasons (gambling, mistresses were among other vices) and eventually Cissy left him as the family paid him to leave. While this is a person, we all fall in love with a stock or two because of the promise of the future. In many cases, even when we look back at the research which told us to look at other alternatives, we went ahead anyways. Understanding emotion plays a role in our decision-making is a good thing, learning to do it less can ensure we keep more of your money.

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

In many articles on the economy, eventually inflation is asked about – what happens if inflation and interest rates rise will the economy slow down and asset values fall? How can the middle income group (every year the number rises) continue to pay its debts or will they walk away from homes where the mortgages are greater than the value of the home (that happen in 2008). The are many methods to react to the problem or potential problem – one method is to study what do past economic cycles tell us? Norman Rothery writing in the Globe and Mail used author James O-Shaughnessy 4th edition of What Works on Wall Street and the Professor Kenneth French research. The results are high yielding stocks outperformed the markets in 1940’s, 50’s,60s, 70s, and 80s. The high yield stocks trailed in the 1930s and 1990s (internet bubble – however many high tech stocks went down on the other side of the curve – what was increased was decreased).

Linking to dividend paying stocks the lesson to learn is if you have a high yielding portfolio it will have to rebalanced because there are very few stocks of 1940s remained in the 1990s. You should not fear inflation over the long term, because large companies typically can adjust to the economic cycles if they have a monopoly or monopoly like competitive advantage over the competition. Think about utility companies and the ability for the government regulated body to raise rates to ensure profitability. As you review your portfolio ask how does the company retain its profitability and as a starting point you will be either reassured or start to look for alternatives.

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

If you search Google for Attila the Hun you will find great amount of information and if you search You Tube for movies and documentaries you will find different viewpoints of the leader. In History, the victor writes what happen and ensures that it is published and since it is a victory – there will likely be some embellishments on the part of the victors. It could be the losers made a mistake and it was taken advantage of, but that will likely be glossed over. In the written word and many documentaries, Attila was the leader of the Huns who were the nomadic tribes in the Eastern Asia (think European half of the USSR) which he ruled from 434 to 453 CE. Attila had a scorched earth policy – kill the men, burn the village and take the women and child as slaves, nomads were not farmers. Sometimes the Huns lined the men up and a knife reached their throats, sometimes he placed the men on stakes. Part of the strategy was to enforce no resistance and in the town or city, bribes or tribute not to do the same were the norm of the day. For those who live in many parts of the world, bribes are common to this day and will be far into the future. In the Hollywood idealized movie there is a movie called Attila staring Gerald Butler, the warfare is toned down with more emphasis on the person and their domestic life.

Linking to dividend paying stocks, for all companies there are the stories the company tells and the story in real life. Once in a while they meet, most of the time one is said to be better than the other. For the company, there are a multitude ways to describe how things are doing better, but in investing you often make more money if you have rather simple metrics. For example if the company is making a profit is the dividend sustainable? how often does the number increase. If the number has been increasing and the company is still making a profit, the other metrics while very important can be seen as secondary. For you investments, there was a reason why you bought, keep the reason simple and you will know to keep or look for other alternatives.

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