The Horse That Leaps Through Clouds is the Chinese name for Baron Gustaf Mannerheim who was sent by the Tsar of Russia to travel to Beijing along the Silk Road and report back on the countries. It took him 2 years to do the journey and later he settled in Finland (as he born there) and his trip was incorporated in the university studies. One of the students who studied the reports was the author Eric Enno Tamm who decided to recreate the steps in 2006 (the 100th anniversary) and wrote the book The Horse that Leaps Through Clouds, published by Douglas & McIntyre, Vancouver, 2010. From the viewpoint of a North America the travel from Moscow to Beijing overland is a view which you do not often read about. Most of the time, the viewpoint is from Hong Kong to some of the cities which have grown dramatically along the Pacific Coast. The breadth and size of China is one of the views one can easily see along the journey. Although it is noted, Baron Mannerheim was sent by the Tsar partly to see if Russia decided to invade or attempt to gain a portion of China in the northeast for peace in the southwest, could they do it? or it was partly a geopolitical journey. Now days, it would be called a trade opportunity journey for the emphasis is moving goods and services from one area to another. Trade is available in peace time, gaining territory is for conflict situations and in conflict situations one group will be traded for another. At the time of the journey, Mr. Mannerheim was also looking at the resources particularly those underground – metals and mines. This leads to investing in global mineral companies – issues broader than the minerals in the ground will always be in play, sometimes more than others and peace allows for the mining and transportation of them.

Linking to dividend paying stocks, as an investor you may wish to think you are investing in the goods and services of the company, but to others there will be other issues tied to the company. Many will be localized, but they are important to take into consideration for at some point the other issues will affect the stock price. It is sometimes why investing in companies in your backyard is easier.

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

The Horse That Leaps Through Clouds is the Chinese name for Baron Gustaf Mannerheim who was sent by the Tsar of Russia to travel to Beijing along the Silk Road and report back on the countries. It took him 2 years to do the journey and later he settled in Finland (as he born there) and his trip was incorporated in the university studies. One of the students who studied the reports was the author Eric Enno Tamm who decided to recreate the steps in 2006 (the 100th anniversary) and wrote the book The Horse that Leaps Through Clouds, published by Douglas & McIntyre, Vancouver, 2010. One of the interesting aspects of the book is how much life is same, but slightly different for many of the people along the way. The environment or making a living is the concern of the citizens, the second and usually distant concern is geopolitics. In the past 100 years the lands from St. Petersburg to Moscow to Baku to Kashgar to Zhengzhou to Beijing have been broken up, put together in the USSR, broken up to independent states and now slowly put together again. The lands have some resources – oil and gas which makes them valuable to both Russia and China. The growing influence of China and the demand for resources, the ability to move people into a region and to protect those interests are interesting stories. In addition, for the people of the lands in terms of the religion to which they practice has been both favorable and unfavorable to the governments of the day. When it is unfavorable, it is hard to practice. When it is favorable, life is a touch easier, still difficult but a touch easier.

Linking to dividend paying stocks, we all have a concept of time. Sometimes we believe we are short of time, sometimes we have lots of time, but books such as The Horse That Leaps Through Clouds gives a longer concept of time. Dividend paying stockholders tend to believe in a reasonable future (the world is not going to end) for we expect the basic elements of society to remain in place for a while to come. If you expect the basic structure of the economy to continue, then investing in profitable stocks is a good thing to do. The move to alternatives always takes place but the rate of change is likely less than you think or expect it, so look forward to the future and collect dividends along the way.

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

In the US, the key to the economy is the consumers. How they collectively spend their money drives the economy, however there are large consumer companies which should make profits because consumers buy their products year in, year out. The question is which ones do you start looking at? Peter Ashton of Recognia used his company’s Strategy Builder software to search. The criteria was:

market capitalization of $ 5 billion or more.

dividend yield of at least 2%

companies must have raised their dividends by 4% or more in the past year (Current Yield /Past Year’s Yield)

a beta between 0 and .75  which means the stock has 75% or less volatility than the overall market – the stock prices are more stable.

Rank  Company                      Ticker                 Mkt Cap              Beta            Dividend                Dividend Growth

(US$ Bil)                                 Yield %                  Rate      %

1. Philip Morris Int’l            PM-N                 121.8                  0.70               5.3                          8.4
2. Altria Group                    MO-N               106.3                   0.61               4.2                          8.7
3. Coca-Cola                     KO-N                 172.5                   0.49               3.3                          8.9
4. Hershey                        HSY-N                  20.3                   0.70               2.5                         12.7
5. Proctor & Gamble           PG-N                196.1                   0.62               3.7                           5.9
6. Kellogg                              K-N                   23.5                  0.59                3.0                          5.6
7. Kraft Heinz                     KHC-Q                 83.9                  0.33                3.1                          4.9
8. Campbell Soup               CPB-N                 15.7                  0.51                2.5                          7.6
9. Dr. Pepper Snapple          DPS-N                 14.9                 0.61                2.4                           7.9
10. Clorox                               CLX-N                 14.8                 0.54                2.7                           4.2

Linking to dividend paying stocks, there are many choices and all the above companies are good choices. They are hard to go wrong with for they produce goods people tend to buy on a very regular basis and will continue to buy. Mr. Ashton used some criteria, but you always add more to eliminate or narrow down the field. Will you double and triple your money? once in a while but what you will not do is lose money and the first rule of investing is not to lose money. The dividend helps ensure you do not lose money.

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

At my local library are DVD to borrow and one which was seen was called The Admiral: Roaring Currents. The setting was in South Korea and the battle of Myeongyang in 1597. The Admiral had come from a defeat, had been tortured and was pressed back into command by the King (later he was asked why – loyalty to the King forever). As result of the earlier defeat the navy had 13 battleships. The Japanese were invading the country had more than 200 battleships and 100 other ships. The first reaction is fear – the odds looked like they are overwhelming stacked up against the navy, This reaction is seen in the men and the leadership of the navy, if you go to fight you are sitting ducks and then the Japanese would sail right through to the capital. The Admiral (Yi Sun-sin) says first fear then courage and then you can do anything and if we are right everyone will have the courage to help. A bonus for the Admiral is the straits where the Japanese navy is headed – the tides come in and out every 3 hours, however when the tides go out whirlpools are created which can be used in the battle. This and when the tides change so does the current – flowing with the current and then against it. Admiral Yi took his stance – uses his skills, used the currents in the straits and the courage of the other 12 battleships to inflict enough damage the Japanese retreated. The little guy can win.

Linking to dividend paying stocks, if you are a small investor, the odds are stacked against you to outperform hedge funds, institutional investors and variety of other large players in the investment world. This means you should stick to a niche area where the large investors help you; one area is dividend paying stocks. These stocks are profitable ones and large institutions hold them for the same reason you do – they are profitable, they pay a dividend and profitable stocks trade at higher multiples of earnings. When the stock price fall or go down there is an opportunity to buy and hold for a period of time,

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

In terms of the large international commodity firms, Glencore is the elephant in the room. It is one of the world’s largest producer of copper, nickel, zinc and aluminum; Another asset is a trading firm which seemingly was a license to print money. In addition the company has a $ 30 billion debt which needs to be serviced. When China was seemingly buying more and more raw materials at higher and higher prices, Glencore was a very profitable company, with the slowdown Glencore will pay the interest on its debt and earn little else. This has resulted in the stock price falling, similar other commodity company stock prices have fallen. In one sense the news is bleak, if you owned the shares directly. In another sense, there is opportunity to be had.

Linking to dividend paying stocks, in all sectors of the commodity business there are still companies that will continue to earn a profit (albeit a smaller one than in couple years ago) and be able to pay dividends. The shares will have fallen as commodity prices are still in a downfall and have not begun to pick up. The way to earn wealth is to begin your homework on what companies are the best of the downfallen. Then begin to follow those companies with an eye to begin buying them when the market and you see there is an upturn in the commodity prices. When the time has changed over the next few months buy the best of the breed or the best stocks and ride the cycle until it is time to move onto another sector or alternative. Your asset values will grow, ideally there will be a dividend payment along the way, partly because when the dividend payment is under pressure, you know it is time to seek other alternatives.

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

In the Globe and Mail Report on Business, Thane Stenner who works at Richardson GMP wrote some easy lessons for all you us to remember about investing. Mr. Stenner highlighted writing by Howard Marks one of the co-founders of Oaktree Capital Management. Mr. Stenner recommends one of Mr. Marks books – The Most Important Thing: Uncommon Sense for the Thoughtful Investor. The recommendations are:

1. The No 1 job of any investor: Control Risk.

We all start investing with the idea of making more; the idea should be keep your capital safe or try not to lose it. There are many, many different  theories on which venue you should put your money in to make more. Most of them will end up with you having less, a few will give you more; remember the rule in investing is looking backwards is 100% right, looking forwards is an unknown. The rule means to do your homework, say no more than yes and have a good reason why to go forward.

2. Safety comes from buying things for less than they are worth.

If you go to a garage sale or flea market there are many items to be found, if you know what you are looking for in terms of prices you will be able to save money. The idea is you know what you are looking for and whether it is a good buy or not. The same theory applies on the stock markets, you have to study or know when something is trading for less than full value and the reasons why it will go up in value. The only good thing about a market fall is if you have cash or the ability to buy, you can pick up the best stocks at a lower price. When the market corrects itself, your assets are worth more.

3. The Market tends to move in Cycles and People forget, which means there are buying opportunities.

You have seen the charts where the sales or prices grow over time in a seemingly upward progression and everyone is happy, until there are dips. The world operates that way. There is a time to be in a sector, there is a time to seek alternatives.

4. Should does not mean will.

Very bright people will pitch you their ideas of what should happen on the markets, if they are correct the market should do what they are pitching. If they are not, you will incur more risks and wonder why the markets are not reacting to the should do. The reason is the very bright people will need to pitch you something else next week and every other week, rejecting theories or saying no will allow you to lose less or save your money. Build flexibility into your positions so you are not taking unnecessary risks.

5. The vast majority of your holdings should be consider 5 year holds.

If you have done your homework to buy undervalued assets, it will take time before the investments double in size. The idea is to buy stocks generally above $10 and typically more as the company and industry makes changes to be more profitable the stock will increase in value. Try to stay away from leverage and invest in the best quality you can.

Linking to dividend paying stocks, if you wish to lower the risk level even more add variables into your analysis such as the best dividend paying companies available. In this fashion as the market prices rise, you are benefiting from the dividend as well as the capital gains. The risk level is lowered and you are protecting the assets. All companies have highs and lows, as an investor you task is to study them and buy when the companies are beginning to come out of the down cycle and enjoy the ride upwards. At the same time begin to look for alternatives and follow the cycles.

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

Every day we live, we get older, as we get older some will say we do less. There are exceptions and hopefully you will be one of them. An exception was Mary Delany who died in 1788. Mary’s gift is something children and adults do for crafts – collage and her story is written by Molly Peacock published by McClelland & Steward, Toronto, 2010. Mary lived a full life and became inspired at 68 years of age when a petal of geranium fell onto the dark surface of a table. At the same time – nearby was a bit of paper of a similar color, Mary was connected the two and collage was born. It helped Mary loved gardening and plants, for to imitate them she had to study the plants – one of her most famous collages is a pick rose called Cluster Damask Rose. The pink rose contains 71 pieces of paper – each a separate color from pink to red to form a beautiful blush of red. The rose is surrounded by leaves and buds of other roses. In the book, the author tries to connect some of the actions of making the collage to her personal life and some of it works, others it is a bit of a stretch. At the same time Mary was working on her collages she lived in interesting times for Mary lived in the UK at a time when Captain Cook was bringing back plants from about the world. Looking at plants, the issue of how to distinguish them from each other arose and Mary agreed with Carl Linnaeus sexual system or based on numbers of reproductive organs of plants – the stamens and pistils, One method to look at her art – much of it is in the British Museum of History is start with the sexual organs of the flowers and then look at the rest of the flower. Mary collection was 10 years of work, but what a lovely collection it is.

Linking to dividend paying stocks, a question is often asked can you teach an old dog new tricks, the answer is yes. When we are younger, we make many mistakes, as we get older we still make mistakes we hopefully learn more from them. One mistake we make when we are younger is to have lots of money in a short time. As we get older, we know it is possible and sometimes that works but long-term investments will accumulate wealth, providing there are at least 2 ways of capturing the growth. One process is capital gains (which there tends to be a cycle) and the other is the steady stream of income or dividends. Whether you learn it in your 20’s or 60’s for we are living longer, the point is to learn for older people can still learn many tricks.

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

Individually we all want enough money (and everyone has a different version what is enough) to live reasonably well and invest for the future. In reality we know there are people in poverty and as citizens of the world we both wish to understand and help limit the worst, knowing that there will be poor in the world. There are many books about the subject, many paths to travel and no perfect answer. In one book Out of Poverty by John Stackhouse published by Random House, Toronto, 2000 added to the subject. Mr. Stackhouse went to many of the poor areas of the world and offers his views of what it is like and possible solutions. There are many inequities and very hard ingrained “systems” such as India’s caste system in place. In India, it will take many generations before meaningful change happens, but things are starting.

In some of the poorer countries of the world, big institutions have a bias towards big projects and governments like big projects. An example is Our Lady of Peace Basilica in Yamossoukro, Cote D’Ivoire. This is a church the size of St. Peter’s in Vatican City located in a small town 200 miles from the largest center in a country which is 1/3 Christian. Why the church and the infrastructure that supports it was built there is always a problem with countries with a powerful leader. The church is wonderful, but little of the structure used the materials from the country which means most of the money went to the western countries that were funding the big loans or only a small fraction went to local people. This is a strange method to build a country.

All the above means there are many,many problems in the world and even closer to where you live.

Linking to dividend paying stocks, it is easier to pay attention to the companies in your country and try to make your community as good as possible. There are many inequities in place, some of them are almost ingrained in the system, but things can change. Perhaps you can use some of your dividends to make small changes and hope they get bigger.

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

Ideally the company you wish to buy both pays a dividend and puts money back into the business. How does someone determine which companies are investing back into the business? Charles Martin of Thomson Reuters examined companies using the Thomson Reuters data base. He focused on US large capital firms or market valuations greater than $10 billion. Next we went looking for growth rates in their free operating cash flow (FOCF) by 20% or more over the last 3 years and reinvested at least 10% annually of retained earnings. In addition Mr. Martin was looking for a return of at least 10% and dividends have grown by 10% a year over the last 5 years. There were top 16 are:

Company                        Ticker    Reinvestmt   FOCF 3Yr  Return on      Dividend              Dividend       52-week

0                                          N          Rate %          CAGR%     Invested Cap%   5YrCAGR       Yield %       % Change

Walt Disney                     DIS-N         13               23                12                    18                    1.3                14.3

Visa                                     V-N         16               22                 20                    26                   0.7                30.9

Nike                                  NKE-N       20              64                 23                     12                   1.0                 42.5

Boeing                                 BA-N       27              62                 30                     12                   2.7                   5.2

Qualcomm                       QCOM-Q     13             20                 20                     19                   3.5             -28.0

Honeywell                           HON-N     16            37                  16                      10                  2.1                  1.3

Lowe’s Companies             LOW-N     17            20                   13                     16                  1.6                28.7

TJX Companies                  TJX-N      41             25                  38                     19                  1.2                 20.7

Estee Lauder                        EL-N      20              31                 21                     26                  1.2                   4.1

Cardinal Health                  CAH-N      12              43                 10                     13                  1.9                   9.1

Southwest Airlines              LUV-N      14              39                 12                      61                 0.8                14.0

Aon PLC                              AON-N     15              24                 11                     11                  1.3                 4.0

Ross Stores                        ROST-Q    35              23                35                      25                  1.0                31.0

Magellan Midstream Part      MMP-N     15             86                17                     15                   4.7               -25.3

Rockwell Automation            ROK-N       19            23                21                     14                   2.5               -11.2

Gap                                        GPS-N       29            21               29                      10                  2.9               -26.8

Linking to dividend paying stocks, the chart shows a wide variety of companies and although the stock price ranges from going up to going down, the risk level is lower given the reinvestment and dividend paying. Picking stocks is still an art but lowering the risk and raising the return is what you should be looking for. Charts such as these allows you to start and equally important to eliminate companies to invest in, giving there are always many alternatives.

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