We all have opinions about the unions, some are good some are not, but given they are a fact of life it is good to know something about them. One of the biggest unions was the Teamsters and you might have heard Jimmy Hoffa and know something about the union. One of the books about The Teamsters was written by Steven Brill published by Simon & Schuster, NY, 1978. The book highlights the workings of the union and for all the good work it did, one connection was to organized crime. They shared the fight on the street, Teamsters was (or is) the union for truckers and for many truckers the work came with an increasing pay. There are multiple stories but two will be highlighted – one about real estate and the other about governance. It terms of real estate – the unions had their members enroll in a pension plan which is a good thing, the not so good thing was one part was invested through investment managers and insurance companies which kept the fund solvent. The other part – the Central States Pension Fund decided to invest in real estate. In 1974 the fund had over a billion dollars invested in real estate which was 20% less than Chase Manhattan Bank – the US second largest bank. That might have fine if most mortgages received the same attention as the Chase, but in reality many of the loans were twinned with mob money. It can easily be said, those two funds built Las Vegas and other leisure centers across the US.

Another story revealed around governance – when Jimmy Hoffa went to jail, he pick a successor – Frank Fitzsimmons. At first the reason was considered Mr. Fitzsimmons was supposed to offer a caretaker government for the return of Mr. Hoffa. However 3 months into the job, Frank liked it and started to make changes He started to feel comfortable with the power, to look as if he knew how to handle it and like it enough to want to keep it. When positions have respect – the people in them tend to rise to the demands of the position, although everyone will do it a little differently – be it more delegation or less.

Linking to dividend paying stocks, with the union one of its strengths was the size of the pension plan. However, the union really did not use the pension plans resources to further their fights. When a group owns a pot of money and every month more is coming in, there are responsibilities and abilities to effect whatever their cause is. In the Teamsters case they spent the money on themselves and organized crime figures, things could have been different if different management and skills were managing the money. Pools of money represent choices

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

It is good to occasionally read books that do not fit your way of thinking about the world. One such book is called The Myth of the Market – Promises and Illusions by Jeremy Seabrook published by Black Rose Books, Montreal. 1991. Mr. Seabrook believes the root problem of our society is that it is consumer based and somehow we need to changed it. In a consumer society there is need for growth – the need for a vast expenditure of human energy in the effort to sell more and more than things to people, the need for which had not previously occurred to them? Mr. Seabrook goes on to describe all the ways the market does not work for people and there are lots of examples.

Linking to dividend paying stocks, if the company has a reasonable monopoly then it does not have to matter about how the economy is set up or whether the market works or does not. Although for the for see able future, the market is going to be the system of the economy. In reality, one of the few methods to get the economy moving again is to encourage individual spending on goods and services. From a macro point of view it is great policy, on an individual basis – it may or not be – it depends on debt payments.

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

The Shadow Market conjures on privacy but what it really means is around the world there are billion dollar funds looking to invest in something which makes money and there is little regulation on the money. In the book The Shadow Market by Eric Weiner published by Scribner, NY, 2010, Mr. Weiner shows how the financial markets of the world are changing. If you read the financial press, the news will reflect that corporations who are buying greater assets tend to be less US-based. For the last century or so, the US corporations lead the world in expanding their operations around the world. As the world changes, although it has a long way to go, the non US corporations have tended to be more aggressive in their expansion and the dollar figure seems to be in the billions. Every once in a while, the company funds will influence their clout for example, in 2008 China was consuming 60% of the iron ore supply (iron ore is used to make steel), when the price was rising the companies which supplied the iron ore were raking in the billions. The negotiation for price is the Chinese steel makers estimate how much steel they are going to make and negotiate with the big producers about price. The Chinese wanted the price to go down after a couple of years of increases; the chief iron ore negotiator was arrested until the price was negotiated down. This may not happen in all cases, but it does happen. The problem with billions at stake, politicians who do not directly own companies will try to influence companies to settle based on the revenues the resources bring into government coffers and the jobs they offer.

Linking to dividend paying companies, the world is changing but that does not mean the consistently profitable North American companies have to be switched to non North American companies. It is important to be aware of the pools of capital around the world because for investors – who has the gold (or pots of money) has say. When countries run large deficits, they may want to grow their economy to pay the debts, but in the short-term they have to pay attention to those that have the pots of money to buy bonds. From a small investor point of view, as long as you stick to profitable companies which earn enough to pay a dividend, you may have new owners or get bought out but in the end your investment has gone up and that is a good thing.

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

The Shadow Market conjures on privacy but what it really means is around the world there are billion dollar funds looking to invest in something which makes money and there is little regulation on the money. In the book The Shadow Market by Eric Weiner published by Scribner, NY, 2010, Mr. Weiner shows how the financial markets of the world are changing. It used to be the largest capital pools were a combination of money centered banks in New York, London and Frankfurt. The world has changed because of sovereign wealth – money controlled by individual countries (primarily enhanced by oil revenues); hedge funds; global market funds; state funds (China) and most of this money is not controlled by the US or western world. This mean these funds can have a say in how the world reacts to various crisis and proposed solutions. For example, China and India because their economies are becoming the biggest in the world and owning billions of dollars in US reserves can tell the US to pay down its debt. (that must have been an interesting conversation for the US President generally said to be the most powerful office in the world).The funds can invest around the world and as long as they receive resources from a country which allows them to tell others to tone down their ability to influence the government. All of this means the financial world is changing and other considerations need to be applied to solutions offered by the G7 and its institutions.

Linking to dividend paying stocks, while it is entirely possible to invest in North America or Europe, the reality is greater wealth is coming from other countries. The Shadow Market has the goal of buying into corporations and ensuring they continue to grow or be sold off so their funds grow. The Shadow Market is generally not interested in control the corporations, just trying not to lose money and make money. The Shadow Market because it tends to be risk adverse, has help create a great deal of financial vehicles which individuals can invest in to try to capture wealth creation around the world (this is a good thing). The Shadow Market funds are not homogenous, they are like all investors – everyone is looking for perfect information (which is only available in hindsight) which means many different theories are being used and tested. Some are good, some are not so good, but investing in profitable companies with a reasonably stable income stream never is a bad idea. Some years the growth is great, some years it is only good. As individuals we can live with good.

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

If you really examine work that you get paid to do to earn a living, if you work for someone else when you leave the company should the work continue on. The answer invariably means you can be replaced and the question is how easy is it to replace you? In a book called Linchpin  Are You Indispensable? by Seth Godin published by Portfolio or Penguin Books, NY, 2010 says you should make yourself indispensable and that way you can survive the changing nature of work. What does indispensable mean? Besides coming to work on a regular basis, what does an employer want? The ideal person is passionate about their job and tries to find workable solutions to help customers or people. Every job has defined rules to them, 95% of the time they need to be followed – in some cases it is 100% because lives are at stake, but what if your job there are no lives at stake? then there is wiggle room or creative solution making. In those instances you can make your job indispensable. There old values of being productive, coming to work are added to the art of being an artist.. An artist, and we all see a little differently otherwise our homes would all be decorated the same, the artist means there is a chance to perform or make a connection to do your art. The old formula was higher on conformity, obedience and compliance; the new formula is based on dignity, generosity and humanity with overlap between the two formulas. There are many other aspects to the theory and the book brings excellent points to it.

Linking to dividend paying stocks, while personally you can be a linchpin (and I hope you’re) the reason to read the book is another method to do research on the companies you have shares in or are thinking about in. How do managers treat their employees? what attributes of linchpin are found in the companies you invest in? The belief is a linchpin employee is a higher value added employee – ie makes more money for the company, ideally most of the employees should be, but reality is different from ideal. If you like the theory and see how human resources should be evaluated then look at companies to see if they follow the theory and make more money for them and you.

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

Losing the Signal with the subtitle of the book is the spectacular rise and fall of Blackberry by Jacquie McNish and Sean Silcoff  published by HarperCollins, Toronto, 2015 is the terrific story of the smart phone and the growth and decline of a technology company. In the world of telecom companies – the telecom companies do very similar things however the suppliers tend to be different. This was the case which allowed Blackberry to grow, their built a wonderful handset which offer secure emails to people, and in a world where privacy is still important, having secure emails is a great thing to offer. The supplier was BellSouth who was competing against the other telecoms. If they had the hot technology people would be sign up as subscribers and the company would operate similar to a utility. People tend to have few choices to their provider so switching is less an option particularly if the provider has the hot technology. This leads the suppliers in a tough position – every year companies more or less have to come up with something new and this new should be the hot item in the field. That is a huge challenge and for 15 years the engineers at Blackberry did that but since engineers are people; events and lives change sometimes for the better and sometimes to make them run on the same spot while others in the field are running in the distance.

Part of the success of Blackberry was for many years the two founders functioned great as partners – one looked after sales and finance; the other looked after the engineering. The sales person always promised the moon in new things and the engineered delivered. The abilities of the two to be co-Chairs with a President who could balance the two off and understand what directions the company needed to go was one of the companies secret to success. The engineer and his group did wonders in correctly anticipating where the market was going and meeting the needs of the telecoms. When the telecoms were interested in advanced technology for the time and the engineering group asked why? they started to look at other alternative companies who would provide the devices the company needed to compete in the marketplace. Loyalty was not forever but it would allow for time overruns.

Linking to dividend paying stocks, one of the reasons to read the book is to look at why the company can down as fast as it did. One year it was worth 100s of billions next year tens of billions, still a large successful company just not as large as it once was when it dominated the smart phone market. When you invest in companies such as Blackberry you need to know what triggers and what is hot and not and be ready to switch to alternatives in the market place when those triggers can be noticed. Otherwise one year your stocks are worth 100s of dollars the next year they are worth 10s of dollars.

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

Losing the Signal with the subtitle of the book is the spectacular rise and fall of Blackberry by Jacquie McNish and Sean Silcoff  published by HarperCollins, Toronto, 2015 is the terrific story of the smart phone. If you look around more and more people have smartphones as opposed to basic cell phones and there are many advantages to this. One of the first smartphones was the Blackberry and being the first on the technical side there were many hurdles to pass through. The combination of brilliant problem solving engineer and a hard-driving sales president  – Mike Lazaridis and Jim Balsillie respectively, built a great company, however in the ever-changing world of smartphones the company is not the leader it once was. The story of Blackberry is the story of an engineer who figured out how to put wireless communications and computers together is to build something special. The something special proved to a Blackberry which allowed a person to read their emails away from their computer on a secure platform. This lead to sending more emails than telephone calls. Along this journey is the invention – trying to keep the device reasonably simple; the selling of it and all the infrastructure to ensure the system works 24 hours a day, 7 days a week.

The sexy part of technology is the device or program; the non sexy part of business is selling the technology to receive income streams. After Blackberry was being used and sold, it than began to be concerned over receiving the income stream or money from people using their devices. The stock would go up on the greater sales, it would fall when those sales were not regularly captured by users paying for the system – or bad operations. Big companies do the operations side well; small companies do not because it is the non sexy part of the business. As a company grows it has to balance these elements of the company out or be sold to a bidder willing to pay for the technology. The sexy part of the smart phone business is the continual advancements – figuring out what a consumer is willing to pay for. For many years, Blackberry was the secure emails; however as time went by and telecom companies spent billions to upgrade their infrastructure, the advantage is no longer an advantage. Apple made the Mac portable in the iPhone; the iPhone came with applications or apps for people to use; there is now considerable advantages to having an iPhone. Blackberry is still in business just following a different path.

Linking to dividend paying stocks, while successful tech companies generate billions of dollars because of their age they often do not pay dividends. As the company gains years of service, then it is inclined to offer dividends which are secured by their large cash balances. As younger companies tech stocks are growth stocks and with growth stocks the manta is what have you done for me lately? or why is the latest technology the best and brightest, given the immense alternatives that are offered in the marketplace. Understanding the complexities of the how and where the companies compete is part of the investors homework. If you are interested you world is a bigger place, if not focus on other companies where the benchmarks of understanding are easier and the rewards can be as lucrative.

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

This blog looks at books such as Switch – How to Change Things When Change is Hard by Chip Heath & Dan Heath, published by Random House Canada, Toronto, 2010 because as Dividend buyers part of what we want is not to change.

To create and sustain change, you have to act more like a coach and less like a scorekeeper. You have to embrace a growth mindset and instill it in your team, The reason is in the middle of the project everything can look like a failure, it is only at the beginning and the end do success occur. In the middle it is often 3 steps forward and 2 steps backward – think snakes and ladders. This means if failure is a necessary part of change, then understanding failure is a critical step. The important thing to learn is people will persevere only if they perceive falling down as learning rather than failing. What is the attitude towards failure in the company?

Many times we attribute behavior to the way they are rather than the situation they are in. The Path can be made easier to navigate and no matter what your role is there is an element of control. Tweaking the environment is about making the right behavior a little bit easier and the wrong behaviors a little harder. Remember the easiest path – most people will take.

How can you create a habit that supports the change you are trying to make? There are only two things to think about (1) the habit needs to advance the mission and (2) The habit needs to be relatively easy to embrace.

One of the best tools to do this is the Checklist. Why are they effective? They educate about what is best, showing them the ironclad right way to do something. You can ignore but you cannot dispute it.

How to keep the journey going? Reinforcement is the secret to getting past the first step on the next ones. The problem is most of us are not good at reinforcement we are quicker to complain than to praise. Learning to spot and celebrate approximations requires us to scan the environment and look for little rays of sunshine and it is not easy. Change is not an event it is a journey.

In the book there are more examples and downloadable on http://www.switchthebook.com/resources

Linking to dividend paying stocks, the good thing is these companies tend to have longevity which allows change to happen and many companies are not the same as they were founded, something has changed. Something good and consistent which customers keep paying for at a margin which the company can make a profit and pay dividends. The history is of some change, just because it is making a profit does not mean standing still. The key is making it easier for the people who continues to buy your goods and services.

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

This blog looks at books such as Switch – How to Change Things When Change is Hard by Chip Heath & Dan Heath, published by Random House Canada, Toronto, 2010 because as Dividend buyers part of what we want is not to change.

In the world of big oil companies, because they are big they are looking for big oil reserves. However, you really do not know until you have drilled to determine how big the oil reserve is or can be? Oil companies exploration budgets go up and down with the price of oil and during one downturn, the head of BP exploration lowered the budget and came up with the simple phrase “no dry holes”. This means a lot of things but one thing is to ensure the geologists to spent more time formulating data to weed out the possibility of dry holes, so when the drill was going down the best information possible was used to expect a hole with oil. No system is perfect but BP used its data better and hit rate was 2 out of every 3 holes struck oil which was better than the competition.

In all industries – various publications dominate for example with financial news the Wall Street Journal, for institution investors add the magazine Institutional Investor (II), the large pension funds managers look at II for articles and rankings to see where they allocate their funds. For a firm to be highly ranked, it will translate into more dollars going into that firm. It was this premise that in 1986 Shearson Lehman’s research ranked 15th with nobody ranked in the top 5 in II. The new boss made many formal changes clearing out deadwood, changing the compensation package and to get the company moving he decided analysts were expected to initiate at least 125 client conversations per month and post them on the internal network. In addition, at presentations the I think were changed to we think. The results were besides doing better research which II noticed, customers were noticing the extra attention. One example of the work was when a drug company called Epogen made by Amgen and distributed by J&J was introduced, Shearson identified more than one market for its drug and called it a blockbuster which made money for many clients. It is always possible to rise in the rankings.

How do most of us change something ? do we analyze-think and change or See-Feel and Change. Turns out it is the second one or we are touchy feelings and if you show us we can and do react. Two wonderful examples:

a man wanted to centralize the purchasing system – the company had many different divisions buying products. He took gloves from all over the company with various price ranges and laid them out on a table and said – if we centralized all the gloves would be in the similar price range. The board approved it.

Target department store is known for many things including clothes with bright colors but that was not always the case. The ready to wear trend department manager saw that the year’s fashion was neutral or gray, white, etc. She wanted color, so she bought M&Ms and displayed them in glass bowls and asked do you see the colors? She brought in Apples in different colors and photographs from different boutiques showing colors and how they pop. The interesting thing is she was one person with limited authority and resources but it can be done.

Linking to dividend paying stocks, the examples show change is possible within any company and the organization can benefit from it. What changes are going on in the companies which you own stock in?

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