We all have preconceived impressions about warfare, and generally it is correct – if a state or government is very well funded it could afford to spend the most money on advanced weapons and pay for a standing regular military. Along with reasonable administration it should have staying power and then comes the exception. In a book called Mongols, Huns and Vikings by Hugh Kennedy published by Cassell & Co, London, UK, 2002, Mr. Kennedy says the Nomads were the exception and to answer the question why were they the exception, he reviews the groups.

The first group is the Huns led by Attila. The Huns and the fall of the Roman Empire are linked but so is Attila’s tactics as he is also called the Impaler. Attila instead of nailing people to the cross which the Romans did, he sharpen trees and the sharp end of the tree went through the person neck until either the birds had their share or they were taken down. The tactics lead to many stories and easier battles, give up or pay tribute (bribes) to stay alive. The Huns were originally from the Central Asia grasslands and were excellent horsemen. Observers noted they ate and slept on their horses. The advantage they had is endurance and the art of mounted archery. Another advantage over the Romans is the Huns horses feed themselves on the grasslands; when the Romans travelled they brought feed for their horses or needed larger supply lines. The Huns while generally living in smaller communities, all adult males bore arms, which made them a nation in arms. Attila worked with and against the Roman empire, as long as they paid their gold, he worked with them. When they could not the Huns attacked. Shortly after Attila died the Huns empire divided and moved in different directions.

Linking to dividend paying stocks, every organization has strengths and weaknesses and depending on circumstances can be good or bad. In the case of the Huns, they had strength in their agility but there was no staying power after Attila died. It is a credit to find a company which has continually made money and can pay dividends. There are many factors which compete against long standing companies, enjoy the benefits while they are still making profits.

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

We all have preconceived impressions about warfare, and generally it is correct – if a state or government is very well funded it could afford to spend the most money on advanced weapons and pay for a standing regular military. Along with reasonable administration it should have staying power and then comes the exception. In a book called Mongols, Huns and Vikings by Hugh Kennedy published by Cassell & Co, London, UK, 2002, Mr. Kennedy says the Nomads were the exception. The groups were the Nomads – who were mobile but equally important could retire or retreat to areas where others would not follow. The Huns and Mongols went to the grasslands of eastern Asia – lack of grain and very cold winters would stop people. The Arabs went into the desert (same problem) and the Vikings had superior ships.

Being a nomad was in fact being a warrior. To live on lands which do not produce an abundance of food and having to deal with the climate means the skills acquired just to live makes the person have the basis of being a warrior. Before the use of gun powder or guns, people depended on the bow and arrow and the sword. The nomads added the horse to the bow and arrow to make them a deadly combination. Another advantage was leadership in nomad society was based on skill and wisdom in warfare and hunting. It does not take long to determine if you have good knowledge – if you did you could rise up to leadership levels. The first order was to conquer your on lands before you conquer other parts of the world, which is the reason why until the Nomads left their lands, the writers in Europe did not pay a great deal of attention to them.

Linking to dividend paying stocks, we pay attention to those companies which are in our immediate horizon, if we recognize we are bias. Being bias can be a very good thing, you pay attention to those opportunities which are immediately around you and which are easy to follow. The easy to follow is the key, people are people and they all tend to do the same basic thing to earn an income. Some go into government and administration of the lands; some go into construction of buildings; some go into servicing of the others; and some go into the grey area of economy and will be known as the usual suspects to the law. Along the lines, we all want to live off more than we earn and have savings and thus investments. If you have investments as long as it is reasonably diversified and the country is stable, there are few reasons to look outwards. When you country is invaded, life changes and having ready cashable investments is a great thing. Investing is something in between and since we never know what is going to happen, being paid along the way – in dividends is always a good thing to have.

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

In the book Conspiracy of Fools written by Kurt Eichenwald published by Broadway Books, NY, 2005, the senior management of Enron changed the company from a gas distribution company to a trading company which tried to commoditize increasing parts of everyday life. Part of the reason was the senior management thought all business are similar. We have expertise in pipelines, what is the difference if we move into another commodity structure such as water. At Enron Water or Azurix they quickly found out – owning water infrastructure was not the same as owning pipelines. In England, what was thought as an easy return on investment, turned out to be less because the government changed the amount which rates could be raised. In Argentina where a system was bought, the former employees trashed the computer systems so no one would know who and what to bill. The former workers were government employees (will all the historical connections to that name) and it was very poorly told what would happen to their job and benefits.

In a Norm Brodsky article in the magazine Inc, he writes about looking at conditions and thinking they are similar conditions,but are they? They will be differences in economic and cultural conditions. What is the real competition? what price points do they offer compared to what you are thinking of? how does the local government embrace you or do they? are they willing to work with you or are you on your own? why can not someone else compete against you?

Linking to dividend paying stocks, while as consumers we want fair competition, as an investor you want the market tilted towards your investment. Why can the company continue to make money to be profitable and pay a dividend? It is not always an easy answer, but you need to know when the company thinks of horizontal expansion – what questions are they asking? is it really a similar business?

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

In the book Conspiracy of Fools written by Kurt Eichenwald published by Broadway Books, NY, 2005, the senior management of Enron changed the company from a gas distribution company to a trading company which tried to commoditize increasing parts of everyday life. In a trading company, people are paid to trade and used the firms capital and credit capacity. To gain an edge, an understanding of the regulations and where the regulations have a loop hole is important. Often times, regulators made the regulations but they left a tiny loophole which others see as being able to profit from. As private industry and the public complain about higher prices or no other option finding the loopholes is where the traders jump in. In Enron, they moved from gas distribution to many other industries – water distribution, electricity, broadband distribution, some had markets some did not. As a trader, you are looking for something to trade not to operate it. Enron people rarely said no to any ideas – it was to offer to the market to get the price of the stock higher so more credit could be used. In additionally, the CFO had an interest in using off balance sheet items which could take the bad stuff off the balance sheet for reporting time to be made good results and then put in back on to figure it out. The CFO and others would pay themselves large fees for their efforts – who were they working for themselves or the company? who knows? When was the CFO ever going to say no? If not him, who? When the CFO is more interested in the deal making than the nuts and bolts of operating a business, the wrong CFO is in the job. As Enron went down, the CFO was asked about outstanding debt – he said $34 billion, when asked about maturity scheduled, interest rate protection, daily cash flows, available cash – the answer was I have to get back to you or I do not know. The mundane things of keeping the business alive and knowing your cash flow is the job.

Linking to dividend paying stocks, the CFO is the one who pays the bills, they are where saying no to projects is important. At Enron, the wrong person was put in as CFO and predictable results happened. All companies have or should have more requests or ideas than money; similarly all companies should have more requests for donations than they have money. How does the company decided and when do they say no, is something the investor should get a feel for.

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

If you ask a small retailer what is the secret to their success invariably the answer is positive cash flow. The company earns enough to pay its bills and the expenses of running the company. No cash = no sale. It is relatively simple. In the Conspiracy of Fools written by Kurt Eichenwald published by Broadway Books, NY, 2005, the senior management of Enron forgot that simple lesson. Enron was a gas distribution company which became a trading vessel which tried to commoditize increasing parts of everyday life. The problem was the senior people focused on the trading, used of debt and the larger bonus – rather than the companies they bought operationally made money. When you focus on the trading, rather than the operations, the solution is to be creative to find a way to make it work. If you focus on operations you focus on simple stuff – who pays the bills? what is our cash flow? when do you say no to ideas. On reading the book, one is impressed with the creativity of the dealmakers – they were bright, eager, worked long hours but rarely were told no, only get it done and you will be rewarded come bonus time.. They were rewarded with the get in done theory, and as long as it did not break the law but was okay to be well into the grey area. Over the years the grey area of what is legal or proper and what is not, the grey area moved from white to black as enriching yourself before the company was foremost.

Linking to dividend paying stocks, Enron was a dividend payer through the years of pipelines, became a growth stock which exploded and the pipeline company was reborn and if you own stock in Kinder Morgan you have done well and continue to do so. With dividend stocks, boring, vanilla and making money are the keys. Creativity is wonderful but not too much which loses track of the reason for the company to stay profitable and turn out dividends.

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

March and April are a perfect time to go to home shows for in April to May it is time to do. Shows or conventions are not necessarily there for you to buy something, although you can. It can be used to gain ideas for what you might do to improve your living space. The other day someone tried to sell me a gas furnace, my furnace is oil based. To buy a new one would mean to tear out the new one and for what return? Spending ten thousand to save a few hundred on the bill? Unless the furnace needs to be replaced what is the value? At the home show which was recently attended there were many examples of bringing your living outside, the problem is the home would need major renovations to accommodate the deck which means great ideas, little implementation.

Linking to dividend paying stocks, when we look around at our homes, we know what we wish to renovate, in my case the new furnace would be much higher than the savings, so that is not going to be done this year, but new windows? When it comes to investing, you should be aware of what you are paying for and what seems to be too expensive. If you understand what is a bargain and what is not a bargain, you will be a better investor and can say no more times. The reality is money is made when good stocks sell inexpensively and come back to trade for higher multiples. Your task is to figure out what is which and along the way earn dividends while you think.

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

you are very curious, one of the questions you might ask is how do we get to where we are at? Most of us accept where we are at, but some ponder the question and research what the philosophers say. A easy book to start with is Eureka! What Archimedes Really Meant  – 80 Other Key Ideas Explained by Michael Macrone published by Cader Books, NY, 1994. In election cycles we all vote or should all vote, and the ideas expressed by the candidates often originated by the 80 people who include: Pythagoras, Pascal, Pavlov, Newton, Plato, Freud, Locke and others. Each ponder and some figured out why the earth and humans function they way they do. Each of the thinkers are famous and you will likely have heard or even said some of the things they do.

Linking to dividend paying stocks, most of the people were in institutions of higher learning or universities. They were paid and could ponder questions and the masses on the outside were in awe of their talents. The money is thus made in the application of the thinking, not the thoughts themselves. While most high school graduates support post secondary institution, we invest for action not thoughts. Something that can help raise sales, justify the monopoly holding, reach out to new markets. There should always be positions for great thoughts, but only invest in applications of the thought, not the thought itself.

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

In every state, there are reasonably few very wealthy people who seemingly have great influence on the economy. In the northeast of the US and into a province called New Brunswick, one of the families of concern is the Irving. Whether it is gas stations or woodlots and mills, the Irving’s have an influence on what government does and for that reason it is worthwhile to know about the family. In a book  called Irving vs Irving, by Jacques Poitras published by Viking Books, Toronto, 2014 –  two brothers decided to separate their interests in the family company. The first generation starts, the second generation expanded or vertically integrated the companies. The third generation begins the process to break apart as they have other ideas. In the story of the Irving’s the founder wanted everything together and all his sons to work together. As the sons had families with sons of various capabilities, differences of who was going to control the biggest parts of the billion dollar empire was explored in the book. Although when a billion dollar empire is taken apart with one portion of the family worth $5.6 billion and the other worth $5.5 billion, there was not too much sorrow to be had. Internally, in an effort to split the company, various projects to raise money were taken that two generations would never had happen. When a family is worth billions, the government whether state or provincial has a hard time saying no to what would make it easier for the company to be in business in their state or province.

Linking to dividend paying stocks, in this case the family companies are private and is very profitable on a year to year basis. To invest in the family, is to invest in companies which support them for every once in a while, the family companies will threaten to close down and relocate to some where the ability to continuing to make profits is greater. If you live in the state, one hopes besides keeping the plant or mills operating – the wages remain constant or at least the taxes to support the infrastructure. As an investor, you want someone else to pay for the infrastructure and keep company taxes low.

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

The election guide 2008 is written by Michael Moore, published by Grand Central Publishing, NY, 2008 and was a guide to the US Presidential election. This was an easy vote for the Democrats and President Barack Obama, although with politics in the internet age the rumours and lies that normal people thought were half truths are remarkable. Mr. Moore has a title of “Ask Mike!” which people ask questions and one would think when people can surf the internet to gain great amount of information, hopefully the school system graduates an increasing number of graduates, more people have access to post secondary education – the questions which made the book – one has to wonder. Politics is the only area where the goal is to inform or have the majority of the population vote one way or another. In reality, many people will over their lifetime favour or vote in one direction, but not every candidate is the same. Sometimes very good candidates run in seemingly hopeless ridings. Billions of dollars are now spent on elections – which indicates it must be important.

Linking to dividend paying stocks, as an investor you have a vested invest in who wins or what they do once they are in office. Although most of us suspect that whoever wins would do something similar as the one that lost, sometimes there really is a difference in the use of government resources which can affect people lives on a daily basis. As an investor your interests will partly rely on the status quo continuing, although there is almost change in the marketplace, which is why reading a Michael Moore book is worth considering.

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