If you love military history, then the book The Face of Battle by John Keegan, published by Pimlico, London, UK, 1976 is a must read. Mr. Keegan who taught military tactics looks at 3 battles – Agincourt, Waterloo and the Somme and uses the recorded history to translate into what really happened or did it happen that way. Military history besides telling you the winner, may or may not be as accurate as you want it to be. Although history is always written by the winner’s side. When experts translate the words of the historians, sometimes it helps to be cynical because the writer of the winning side generally overlooks the errors and accents the positives. This is a good thing because with these types of battles there often is another one down the road. Your military needs good battle stories to go into the war and face the reality of it. In Mr. Keegan’s book, the 3 battles were dissected to see did history really match or how would have the leaders communicated with their regiments to follow the plan?

Linking to dividend paying stocks, with every battle there are things to learn; similar to investing you need to continuously learn. With investing looking back is perfect information; looking forward is imperfect information which means you need to protect yourself or your expectations. One method to protect yourself is to buy profitable companies which pay a dividend to you. If your expectations about the increase in price of the stock do not go as high as expected, your dividend adds to your total return.

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

At this time of the year, when the temperatures rise and the snow melts, people turn their eyes toward spring gardens. For many, they will want all the plants in after the last frost and their gardens looking great. For others there is planting of seeds and Seedy Saturday – which has an organic twist to it. The event that I attended had seeds for sale, some political activities which as an energy investor it did not concern me; and helpful hints. Sometimes the helpful hints are the ones which can generate the most ideas. If you are to plant seeds or flowers, one of the things you should do is to ensure your soil is going to continuously generate the food for the plants. It used to be people only considered 3 important items for plants – nitrogen, potassium and sulphur which is the count on the fertilizer bags; it turns out while they are very important, there are many other nutrients your plants need and the real work is done by tiny bugs. In a session by a worm provider, if you have worms in your garden, it is going to be a good garden. If you do not see worms, you need to add mulch to ensure worms do their digging and leave their worm castings or worm poop. If you add worm castings to you soil, it will automatically improve it. If you have good soil – things will grow in it.

Linking to dividend paying stocks, a number of years ago, a book was read about the value of worms and the role they play in a good soil conditions. Fertilizers will do the work, but worms do it better and you will gain consistently better results. The interaction of nature will keep the negative aspects to a minimal. In investing, you are looking for simple but effective solutions. Does the company have a monopoly or near monopoly which means prices can rise if costs rise? How does the company keep its competitors to ensure it keeps its controlling market share? Examining the right conditions of the soil or the right conditions for the company to making profits and thus paying you dividends makes your life easier.

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

For an interesting history of the tech sector or the digital revolution – the book the Innovators by Walter Isaacson published by Simon&Schuster, NY, 2014 is a wonderful read. The ideas which are society is using and developing had its start with Lord Byron. If you read poetry to your partner or lover you may have read some Byron. He had a daughter named Ada who has one of Britain’s few noted mathematicians and scientists. Ada worked with Charles Babbage on the Difference Machine – the machine the size of a room was designed to tabulate logarithms, sines, cosines and tangents. Ada was the world’s first computer programmer.

From microchips to personal computing – first through hobbyist and then through games and into the business world. In the digital age, the hobbyists came first because they were very curious, but they all had needs. It was great to have a computer, but what do you use it for? Now days the answer is almost everything, but the abilities of the first computer were not that great. Companies formed to meet the needs of the users and to reach the masses so they could go everywhere. Each of these directions are chapters in the book and it leads to the wonderful companies we have and continue to create.

People wanted something and would buy it – the first programs were developed and sold, people saw one could make a living and do very well which lead to more being done and needing to be done. This is the important element in the story, the people creating the companies were getting wealthy and it felt like they were doing very important things. The greater the wealth the creation the more people became involved to fill many new and important needs. In the marketplace, the public determines if it is a need, a want or a nice thing to have. If it is a need, the payoff can be very high.

Linking to dividend paying stocks, the growth of the industry has transformed the way we all do things in our lives which is great. From an investors point of view many companies were created but few became standard to the industry to have a long and profitable corporate life. It takes skill and understanding to determine which companies will become standard. You can do the research or you can watch and wait until the use becomes the standard, then invest in it. For example Microsoft has the operating system which many companies use. As long as they keep it current, the revenues will continue to flow, but do not buy it as growth company use the multiples of a mature company.

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

For an interesting history of the tech sector or the digital revolution – the book the Innovators by Walter Isaacson published by Simon&Schuster, NY, 2014 is a wonderful read. The ideas which are society is using and developing had its start with Lord Byron. If you read poetry to your partner or lover you may have read some Byron. He had a daughter named Ada who has one of Britain’s few noted mathematicians and scientists. Ada worked with Charles Babbage on the Difference Machine – the machine the size of a room was designed to tabulate logarithms, sines, cosines and tangents. Ada was the world’s first computer programmer.

The history jumps 100 years to the 1880s when Herman Hollerith vowed to automate the US census because the last one took 8 years to put together. The IBM punch cards was developed. The next big development was in the war time – due to demands of the military digital revolution came into being. Punch cards were slow and cumbersome – how to make it easier and in 1947 the transistor was developed by 3 scientists from Bell Labs developed the transistor – they were all geniuses and they worked together. Bell Labs was a remarkable institution – it was great at inventing, but not so good at capitalizing on its inventions. Part of the reason was Bell was a regulated monopoly and did not want to risk antitrust suits and public criticisms, and its solution was to license its patents to other companies. The growth of Texas Instruments – once known for its calculator was an example. Another great example is Intel – which transformed the transistor to the microchip and had enough brains to make Intel chips the standard of the industry. The book discusses the names of the people who did the work and this makes the book a terrific read.

Linking to dividend paying stocks, the first part of the digital creation is the science of doing. It took months and years to figure out how to conduct electricity through a transistor moving from vacuum tubes. It took another large leap to be able to figure how to conduct massive amounts of data through the microchips. If you are a little bit interested in the science of doing it, the book is a wonderful read. In terms of investing, the real stars of the digital age is in part two – the people who saw what the science meant and transformed it into companies the average company and then the average person would do. It often starts with companies because they have the ability to pay for what they need. Fill their need and the company is off to the races.

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

In 2008 most of the financial banks took a beating for their involvement with mortgage backed securities – the prices went to zero and had to be written off, as well as writing large cheques to the regulators which has helped the treasury of New York state and the federal government. Prior to 2008, the banks were counted on for delivering their dividends to shareholders. The world has changed and last the dividend kings were the IT or tech sector. In the article The US dividend kings: banks and techs? written by David Milstead using research from Howard Silverblatt the senior index analyst for the S&P Dow Jones Indices. Mr. Silverblatt added up the declared dividends and annualizes it – he noted the IT sector paid $ 55.5 billion in annual dividends or 14% of the S&P 500. In 2007 – financials accounted for 30% of the dividends. The following are the leaders in paying dividends

Top 10 Tech Dividend Yields in the S& P 500

1. Seagate Technology      3.97%

2. KLA-Tencor                    3.32

3. Western Union                3.22

4. CA                                   3.20

5. Xillinx                                3.12

6. Paychex                            3.10

7. Intel                                   2.97

8 Cisco Systems                  2.97

9. Microsoft                           2.95

10. Microchip Tech                2.91

The Top 10 Tech Dividend Payers in the S & P 500   in Billions $

1. Apple                               $ 11.158

2. Microsoft                              9.485

3. Intel                                      4.409

4. IBM                                      4.265

5. Cisco Systems                     3.895

6. Qualcomm                            2.693

7. Oracle                                   2.149

8. Texas Instruments                1.323

9. Hewlett-Packard                   1.210

10. Accenture                           1.188

Linking to dividend paying stocks, hopefully you know some or many of the names, if you do not, you need to broaden your searches. Quality companies come across the spectrum and the computer age is maturing. There is still many applications to be developed and capitalized, but as more mature companies one expects dividend payments rather than growth. The analysis and how much you should pay to get a return on your money becomes different. In does not mean a mature company can not have growth, but it is a wonderful bonus when it happens.

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

There has been a boom in accessing oil from shale which has been great for the economy, giving domestic energy towards self sufficiency and made money for many people connected to the oil industry. Similar to every commodity, too much of a good thing means lower prices and the shale industry is doing very well. Oil prices have dropped and there are concerns which is probably the reason why interest rates have not gone up. In a related article, Carl Mortished writing in the Globe and Mail – is solar having its shale moment? Thanks to technology, solar panels are decreasing in price which is one of the reasons why my home is being outfitted with them this year. With more homes being fitted with solar panels, there are opportunities for investors. Mr. Mortished believes 3 factors made the revolution of shale from oil possible. These were entrepreneur behaviour and innovation, market demand (high oil prices) and human aspiration. These 3 factors play well for solar power systems – energy self sufficiency is in public policy for hundreds of years – the ability to generate electricity is a good fit. Solar power systems have been falling in price and should fall another 40% over the next 4 years which means they cost less and bringing in extra income from your home will be the normal thing to do. Human incentives, fears, and aspirations are powerful and can drive economic policy in a way that high level policy can not. It is the human capacity under pressure to find solutions and seek gratification that will bring about the solar revolution.

Linking to dividend paying stocks, as the price comes down whether you pay for your solar power system or go through a 3rd party, solar panels will generate an income to offset or ensure your electricity bill is nil or maybe even positive cash flow. As costs fall the equation looks like a bond or guaranteed dividend payment. At some point in time, the biggest home builders will buy a solar company because people will expect their homes to have solar panels. Increasingly there will be greater opportunities to make money in the sector. The 3 factors from the article entrepreneur behaviour, market demand and human aspiration can be applied to any emerging industry, just ensure there really is market demand.

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

A number of years ago, there was a popular movie starring Gregory Peck called the Boys from Brazil. In the movie, former high ranking Nazi members escaped from Germany with treasures – gold, jewels and  money. and set up operations in South America where they felt comfortable and had dreams of rebuilding the empire. In a book called Inside the Fourth Reich by Erich Erdstein published by St. Martin’s Press, NY, 1977 fiction becomes fact. When the war is over, what happens? Typically the leaders are punished and former enemies become partners. Typically it would take plus 10 years because during war – in the name of the cause humans treat others very badly. In Mr. Erdstein’s book, he found a new life in South America and eventually moved in the justice department. He began to hear stories about how Argentina with its links to Germany encouraged Germans to come after the war. When Peron left, other governments welcomed the Germans, espically members of the Nazi party. In turns out after great research, undercover work, and the use of police resources there were very strong links to senior members of the Nazi Party. Safe houses or ranches, people who benefited from Nazi Party being in power were alive, functioning and trying to recreate their dream.

In the book, Mr. Erdstein notes his past experiences helped make him track through the web – his experiences included illegal activities, government relations, undercover work and working in justice. Part of the reason is to unravel the web, it is never a straight line the process goes through pieces of information and misinformation to narrow the move down to the next step. There is a reason why it is very hard to find the former leaders – they hide and are protected. The end of the book while the journey was very exciting, eliminating the leaders did not make the Nazi’s disappear.

Linking to dividend paying stocks, leaders lead and they should take responsibility if things do not go well. As an investor, it should not feel like Mr. Erdstein’s journey through the complex web, for if it does, you should move to other companies. There are many companies that are much more straight forward about how they earn their money, make profits and return money in the form of dividends. The complex companies tend to break the law, the simple ones are the ones you can depend on for longer periods of time.

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

As a person living, you will be in a variety of groups throughout your lifetime. Most of them are design to ensure you have extra support for example the church is moral supports; for some with extra disposable income – investment clubs will appear. For the elite, those who do not have to work and have a well above annual income – part of keeping the lifestyle is investments. In the book Secret Societies of America’s Elite written by Steven Sora published by Destiny Books, Rochester, Vermont, 2003 the Knights Templar and Masons have been a connector of America’s elite. If you were in, it was easier to amass greater fortunes. The way to be in was to be a merchant particularly an investor in the shipping business. The ships carried goods and services – soon of it legal and some of it illegal. Of the illegal side, slavery and opium were part of the freight which went around the world. If you think about the cocaine barons of the present time – the opium barons are now institutional in the US. Some of the biggest fortunes received healthy foundations to branch into other businesses including real estate, banking and insurance. The continuing wealth gave money to universities and museums to increase the goodwill of the families to the broader public.

Linking to dividend paying stocks, a book such as Secret Societies is an interesting read and shows how the myth of the US as open to everyone is not exactly true. It also shows or demonstrates how companies will use the resources of the state to increase or maintain their abilities to continue to deliver profits. There are many connections as long as the owners continue to be able to profit, connections are used. If you invest in an upstart it can show you how big the odds are against you. To shorten the odds, buy into the connections and let them work for you.

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

As an investor, it is hard not to like Jim Cramer and if you read his books you will gain plenty of ideas on not losing money and more importantly making money. He wrote a book called Get Rich Carefully published by Penguin Books, New York, 2013. One of the wonderful things Mr. Cramer does is tries to ensure you do your homework before investing.

The hardest thing to do in the market is to sell unless the company is doing really badly, but in reality someone is on the other side doing the buying. Lessons on when to sell or view better opportunities:

1. When the thesis changes, cut your losses immediately.  – You bought the stock for a reason based on research or homework. If the reason changes, other companies in the same industry can be great alternatives if you want to stay in that sector.
2. Don’t risk it all for a small profit – if you see the sector is in danger, move to alternatives.
3. If a stock goes down on great news, just sell it.   Good news should send prices higher, if the market sends in lower something is changing in the sector that you need to exit.
4. Upgrade clusters should be sold, not bought.  If the stock is moving higher because of the upgrades of the analyst, what happens when they are all bullish? If the next quarter is so-so the movement of the stock will be downwards.
5. Beware of multiple shortfalls – if one company falters, look at the alternatives, if they falter sell
6. Sell stocks that don’t participate in rallies – if you own multiple stocks and the market in general goes up 1% look at your companies did they also go up? If the market rallies the next couple of days did you stocks go up? It is a good time to sell because the market is buying other things.
7. Sector woes = sell.  All stocks are in sector baskets, if all the stocks in the sector are going down, then it is time to go to alternatives and wait for the bottom based on earnings. Then you can buy back in at lower prices.
8. After the crash, no financial should be given the benefit of the doubt – it used to be the banking industry was a wonderful sector to be in. The new rule is if you get bad news, do not battle it just exit the company.
9. Retailing’s tough- bad comparable store number means to sell – If the company is not selling inventory, it will be even harder the next quarter.
10. De-diversification can be costly – if you are diversified but to close to one commodity – prices go in cycles and the market will go down.  Watch your portfolio and try to stay really diversified.

Linking to dividend paying stocks, there are other lessons from Mr. Cramer’s book but it is sufficient to say listen to the market and the market is right. If you do your homework, always try to buy the better companies, you will do better. If you do not sell, ensure you are getting a dividend because the price will go up and down. To follow Mr. Cramer’s is to follow growth patterns because Wall Street loves growth. For the longer term, investors love stability and dividends. For best results, have cash and be ready to buy when the best stocks are lower in price and watch as they rise in the near future.

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