The sun is shining and the world is open to you – the road awaits and you maybe off on a road trip, did you look at a map before you leave? Most people do, unless they are planning on going the same way as they did before. Have you ever thought about the map or atlas? who drew them? who was the first? what skills were needed? what was going on in the world and did the person actually have to travel around the world to know? The book Mercator – the Man who mapped the planet by Nicolas Crane first published by Weidenfeld & Nicolson (paperback by Phoenix in 2003) London UK, 2002. Many of the above questions are answered and the story is very interesting. Gerard Mercator was the gentleman’s name, born in modern-day Belgium, a cobbler’s son was able to go to university  to study mathematics. His gift was to use the skills to map making from which font the print should be and works best on the globes of the world. In the 1500’s the globe has still an unknown because the travelled areas of the world were the trade routes from Europe south to Asia with North and South American only recently discovered or at least the Atlantic side known, the Pacific side was thought to be closer to Asia than is reality.

One of the hardest aspects of being a map maker in those times is whatever we are, we believe we are in the center of the universe (or least our universe), one can easily imagine a king who commissions the work of a globe expecting to see his country larger than what it really is. One can also easily imagine the institutions of the day not wanting to see too much change from their perspectives for it was not so long ago people believed the world was flat, now they were finding out the world is round. Also who was to pay for the time and effort needed to make a globe? who was the patron or as long as the state was in good standing, things were fine.

In the years that followed the globes became better because errors become clearer with the knowledge of magnetism. Mercator had increasingly absorbed by the nature and location of the magnetic pole and the behaviour of the compass needle at various points of the earth’s surface. It changes and if you were on a sailing ship and did not take it account, you would miss your mark.

Linking to dividend paying stocks, when you do make your investments you need a map, but which type of map are you using? Is your map updated? is it leading you astray? things change in the world and economic cycles changes communities in the area. It is why sticking to the best companies often makes you the most money in the long-term.

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

If you own a house you need to have insurance. At first you needed to have insurance when the house was mortgaged for the banks insisted you have insurance. For many banks. they will happily give you a quote from the bank owned insurance company and a possible discount for you. No matter who you take the insurance from, you need the insurance. After you have paid the mortgage off, the house is yours, now you need the insurance to protect against possible losses which hopefully never come. Although one never knows when a fire will happen or whatever you are covered for, although as a consumer you know the higher the deductible (the more you pay before you claim) the lower the insurance rate, but you still need insurance. Whether you pay the insurance in full at once or through semi-annual payments or monthly, the insurance payment is one of many payments you will need to regularly pay.

Linking to dividend paying stocks, one of the reasons why insurance companies are a good investment is people need to pay their insurance. The insurance company then invests the premium and the less it pays out, the more money it makes. The insurance company has to pay something or there should be plenty of lawsuits from consumers wanting their money. The insurance companies receive many regular payments, similar to dividends which for profitable companies should be regular payments to the shareholders. You need to have insurance, having a regular payment to offset the ongoing costs of life is a good thing.

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

n the world of investing, everyone has a theory which is great and when something major has to the economy, some sectors should benefit more than others or there should be easy pickings. In the economy, oil prices have gone down which is good if you buy lots of fuel or transportation stocks. On May 29th in the Globe and Mail, Peter Ashton of Recognia Inc examined US Transportations stocks to see if the theory matches the reality. First Mr. Ashton limited or narrowed the field by setting a minimum market cap of $ 5 billion. When the price of energy was bouncing back and forth, the transportation sector was likely doing the same and he focused on companies whose stock prices has shown negative performances in the past 13 weeks. In addition, we desire growth and some companies analysts are projecting growth by 10% or more. The final piece is companies with a price to sales ratios of 5 or less.

Rank    Company                                 Ticker   Market Cap  Price            Projected EPS       Price to Sales                 Dividend Yield

(US billion)   Perform %     %                         Ratio   %                                %

1.     United Continental Hold         UAL-N         19.8             -26.8             280.5                     0.66                                   0.0

2.     American Airlines                     AAL-Q          28.8            -19.3              269.9                     0.86                                   0.9

3.     FedEx                                           FDX-N         49.4            – 2.1                  43.4                     1.19                                      0.46

4.     Alaska Air Group                        ALK-N           8.1             – 3.2                120.8                    1.59                                    1.25

5.     Delta Air Lines                             DAL-N       34.2              -12.9                47.2                     0.9                                      0.80

6.     Southwest Airlines                      LUV-N        24.1              -20.6             211.6                     1.57                                      0.80

7.    Expeditors Int’l of Washington EXPD-Q       8.9             – 2.9                  32.7                   1.36                                       1.56

8.   JB Hunt Transport                        JBHT-Q      9.9              – 1.8                   28.0                  1.61                                        0.99

9.    CH Robinson Worldwide            CHRW-Q    9.2              -14.9                 24.9                    0.78                                      2.40

10.   UPS                                                  UPS-N       90.6            – 1.8                  13.6                      1.50                                      2.90

11.    Old Dominion Freight                  ODFL-Q      6.0            -10.5                53.1                      2.32                                       0.0

12.     CSX                                                 CSN-N      34.4             – 2.2                 12.0                      2.59                                      2.10

13.      Union Pacific                               UNP-N      90.1             -16.1                 31.6                     3.97                                       2.20

14.     CN Railway                                    CNI-N       48.0            -13.7                 20.6                     4.88                                      1.70

15.     Kansas City Southern                   KSU-N     10.3             -21.7                 20.6                      4.39                                     1.40

Linking to dividend paying stocks – it is given fuel is a major cost to the operations of the companies, it is good to look at what happens if fuel costs go down. The market remains tough for other reasons – the economy is not as robust as expected, China does not need as much bulk commodities so there can other factors to fit into your equation, but having a theory is a great place to start.

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

You did your research on what to buy, the choices you have narrowed it down and whatever you pick was the correct choice. The harder part is deciding when to sell. One of the reasons it is harder to sell than buy, is only in hindsight will you know you made the best decision. In a recent article George Athanassakos wrote an article titled A checklist to help you decide when to sell which should help you. Mr. Athanassakos is a professor of finance at the Richard Ivy Business School in London Ontario and the article was written in the Globe and Mail on May 29.

1. When management did not deliver on a major promise or lied.  If you are wondering what other problems the company has, it is time to sell, wait to see how they do, then if you wish buy come back in a few months.

2. When the balance sheet is deteriorating. When the accounts receivables and inventories rise from historical norms it is time to exit. If goodwill exceeds 20% of the company’s assets or debt is too high, move to alternatives.

3. When the market price rises beyond intrinsic value.  From the Theory of Value Investing once the stock price is higher than the intrinsic value, this is most straightforward reason to sell.

4. When the stock has risen so much that it represents a high proportion of an investor’s portfolio.  If you diversified portfolio and one of the stocks rises in value (which is good) but now represents 25% or more of your portfolio, value investing means to sell part of your holdings to lower the percentage the stock represents in your portfolio.

5. When a stock has risen sharply in a short time.   You made a great decision, the stock price is up faster than you expected it would be. Look around in the market for there are other opportunities, take your profits.

6. When a merger takes place. You will be either offered shares in the new company or cash which means you have to sell.

7. When you improve your price-to-value substantially. If one of your stocks is close to what you expect to be the high for the year, sell and switch to other companies in the grouping which are selling for less than their highs.

8. When a company’s business model has changed. When you did your research, you looked at the business model or strategy, if it changes (it maybe for the better) but you need to look at why it has changed and if the reasons keep you invested. If the change is substantial – you should look at alternatives.

Linking to dividend paying stocks, while the idea is to buy and hold for a longer period of time, companies go through cycles and sometimes it is better to sell and find another company. For companies that are growth stocks, you will move in and out of them as they grow or do not grow, for dividend paying stocks the focus is on the dividend, worry about growth of the stock price. If the dividend can not be paid it is time to leave (and usually there are plenty of clues along the way). Whether you have growth stocks or dividend stocks when you look at the reason why you bought  it will help you when it comes to the selling aspect.

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

Recently heard on the radio, the average reader of books, non fiction is read 2 times more than fiction, being below the numbers the book The Mask of Troy by David Gibbins published by Headline Publishing Group, London, UK, 2010 was read. It is an interesting read particularly if you have a limited idea about Troy and Homer. In the last number of years, movies about Troy have come out and maybe that is why the book was written. The story is an archaeologist is digging through Troy which was destroyed when it lost the Trojan wars. The archaeologist finds riches, but there is more meaning. What if the battle is not necessarily about gaining territory for the leader, but the changing from the bronze age to the iron age? What if prior to the battle, the metal for armaments was controlled and peace was the result. With a change to the iron age, anyone could make weapons, and those that learnt quickly could control the empire or build new ones.

Linking to dividend paying stocks, for many companies there are alternatives, those alternatives are often times not feasible or not widely available for the mythical average consumer. But when they are: the world for those markets change dramatically. One aspect of owning stocks is looking at the alternatives – what does it take before it is time to switch? There will be clues along the way, declining margins, revenues stalling, when you see it there are alternatives in the marketplace and you will need to move your money to ensure you keep more of it.

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

Most of people look to the skies and wonder, what is up there? We look to mountains and think what if we ever went to the top, where few have ever gone, besides the view would we be closer to …? The skills required to climb the mountain can be translated to another quest. In various parts of the world, the water has made caves and there is an active group of people who are fascinated and well-trained to go into caves. Over the years, the author has gone into very small caves, ones with big openings and gone underground as a tourist to look at mines; however they had lots of light and were very well-regulated. The caving that Blind Descent written by James Tabor published by Random House, NY, 2011 is the journey to the deepest cave on earth. There are two very deep caves and the ones that go the furthest in the ground are to found in Mexico and in Uzbekistan. The book is very interesting to read, because to go caving is to be able to solve problems generally in the dark. While some openings have greater light, much of the work is in the dark. Besides that aspect, water made the cave, which means the cave is going to be wet, with some areas lake size water, and some glorious waterfalls, however the water does provide clues to where the openings to be found in order to go deeper. One can imagine that dealing with the dark, the wet, if something goes wrong it is hard to fix, but the feeling of going deeper than any person has before is a driver. In caving, not all openings are walkable, sometimes there are tunnels, sometimes there are tunnels that will be blocked with rocks and the caver will have to back up. The physical and emotional abilities are very much at work inside the cave.

Linking to dividend paying stocks, the caves the dividend payers like are the well established, with lots of light type. Discovering new depths is for others. One can very much appreciate the training, the mapping of new knowledge, the adaptability and the desire to go under, it is generally not something one wants to do. With your dividends you can enjoy the sunshine or be a sponsor or admire the approach and preparation needed to do the caving.

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

Warren Buffett greatest success is investing in companies that have a moat which means investing in companies with strong brands, a history of high profit margins and dominant or semi-dominant in their industry. In similar terms they have a moat around them which helps keeps new competition out and margins for their goods and services high, although the prices can be very competitive. Charles Martin who works with Thompson Reuters writing in the Globe and Mail, May 20 offered some methods to figure out which companies have a good moat.

First criteria was the market cap had to be $ 5 billion or more.

Add earnings per share growth rates at least 5% compounded annually over the past 10 years.

Further add revenue growth of at least 10% compounded annually in the past 3 years.

Other criteria include lower debt-to-equity ratio than their peers; higher net profit margins and a history of share backbacks.

In addition, he used a Thompson Reuters product called StarMine to identify if the earnings were likely to continue.

20 Companies fit the bill from a wide variety of industry groups.

Company              Ticker                   Mkt Cap    EPS     Net Profit   Revenue/       Total Debt          52 Week Price   Dividend

Margin       Share              to Total Equity    Change %      Yield

VISA                       V-N                        167,980      41.5        42.7           12.4                     0                             29.5               0.6

Nova Nordick     NOVOB-CHP        114,058        21.1         29.8         13.8                    1.8                           55.5               1.4

Qualcomm            QCOM-Q              113,629          15.6        28.5        17.2                    0                              -13.2             2.2

CVS Health           CVS-N                  112,618          13.7          3.3         13.6                  34.1                             30.4             1.1

Nike                        NKE-N                  87,831           13.0        9.7          13.5                   12.7                             37                0.9

TJX                         TJX-N                    44,940        18             7.6         11.3                     38.1                           11.5              1.1

Hermes                  HRMS-PAR            39,430      15.5          20.9       13.2                       1.2                          30.5              2.4

Magna                     MG-T                     22,980         9.6             5.1      12.9                      11.9                           22.4             1.4

Monster Beverage  MNST-Q               22,112         38.4         19.6     14.8                      0                                 85.5            0

Ross Stores              ROST-Q                20,946        22.9          8.4     12.2                      17.5                             46.4            0.8

Chipotle Mexican G  CMG-N              19,724          50.3          10.8    21.7                     0                                 26                0

F5 Networks              FFIV-Q                9,080           23.3         18.0     16.4                   0                                  20.4            0

Hargreaves Lansdown  HRGL-L         9.071           42.1           45.2     20.8                  0                                 -0.4              1.8

Foot Locker                      FL-N              8,579             8.1             7.3      10.3                   5.4                             25.6             1.4

SEI Investments              SEIC-Q          7,732             8.8            25.2     13.4                  0.0                             44.0            1.0

Williams Sonoma             WSM-N        6,945             7.3             6.6      12.3                  0.2                               17.8            1.7

FactSet Research Sys       FDS-N            6,801           15.7            23.0    11.0                  0                                 52.9            0.9

Partner Re                          PRE-N            6,411            8.4            15.4      15.6                 11.6                              25.7            2.0

AXIS Capital                        AXS-N          5,528             9.3           17.6      11.5                 17.0                              21.1             2.0

Urban Outfitters                 URBN-Q      5,272             12.0            7.0     14.9                 0                                    7.6              0

Linking to Dividend paying stocks, if you look at the second last column over the past 52 weeks 17 of the 20 outperformed the market with gains from 20 to 50%. This means if you own them, your money besides being exposed to less risk outperformed the market which is a win-win. Investing in quality stocks never goes out of style particularly if the desire is to make more. The challenge is to narrow the field and pick the best of the breed.

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

The Corrupt Society by Robert Payne published by Praeger Publishers, NY 1975. The strength of cultures, and their weakness cannot be measured exactly by any known measuring rods. We simply do not know how much residual strength lies in a culture when it is confronted by a powerful enemy determined to destroy it.

The five faces of corruption are old age, conquest, tyranny, treachery and subversion, and clash of cultures.

In Mr. Payne’s book he focuses on society in general and has some very hard to read but descriptive chapters on the Soviet and Labour Camps as well as German Extermination Camps. Although they were from different types of government – one Socialist, one Fascist or one on the extreme left, one on the extreme right, in terms of the camps if you had flown over one of them, they would be remarkably similar in design. They served the same purpose – the planned degradation and destruction of the prisoners. Both camps were the same merciless and arbitrary punishments, the same coarse guards recruited from the criminal class, the same rows of desolate wooden barracks laid down as meticulously as a Roman camp, the same watchtowers and searchlights and barbed-wire entanglements. A heartless, mechanical bureaucracy ruled. Filth and misery and torture reduced the prisoners to mockeries of themselves and only the bravest and luckiest survived. The camps were places where men were stripped of the last vestiges of their human dignity, and this was done deliberately, according to plan, in the manner approved in the appropriate regulation without any feeling of guilt.

What is more terrible is both Stalin and Hitler were kept very much in the loop as to the results and the lists of people who went. Stalin’s camps killed in the range of 25 million people, Hitler killed at least 6 million people, only because the machine broke down during the last 6 months of the war.

Corrupt men/women are always liars. Lies are their instruments, their pleasure, their solace. In time they come to believe their lies or half-believe them. They test out their skill in lying in the Area of Confusion, where they serve their apprenticeship in corruption, and when they have passed through the gate in Toward Absolute Corruption, they lie more adroitly, certain at last they have acquired the keys of power. Corrupt men will choose other corrupt men as allies.

The tragedy of corrupt people gaining access to power is a waste of assets of both money and people, as well as the cynicism that builds up. Where they had been hope there is hopelessness, where they had been courage then is cynicism, where there had been life, there is a living death.

Linking to dividend paying stocks, it is never hard to find corruption of one sort or another, it is harder to ensure that power works for the many. As shareholders, you have choices what to do with your dividend, but the priority is to invest in a company which pays a dividend. As shareholders, we believe that our companies are doing good and providing hope in the world, which is why our companies can continue to make profits to pay the dividends.

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

The Corrupt Society by Robert Payne published by Praeger Publishers, NY 1975. The strength of cultures, and their weakness cannot be measured exactly by any known measuring rods. We simply do not know how much residual strength lies in a culture when it is confronted by a powerful enemy determined to destroy it.

The five faces of corruption are old age, conquest, tyranny, treachery and subversion, and clash of cultures

Corruption by Treachery and Subversion

A society invaded from within can give all the appearance of health, but it reality the signs were clear to see it was not healthy One of the best corrupters from within was Hitler and France. Starting in 1938, the Germans spent vast amounts in France to give money to the press from editor to journalist; lawyers, army and navy officers, and many politicians. The Germans compiled a list of thousands of people biography and asking how to push the right buttons that they would accept bribes. When the Germans crossed the French line, little bloodshed happened.

Corruption does have its limitations, people and countries play both sides off to become neutral.

Corruption by Clash of Cultures

Mr. Payne is talking about the wasteland of books such as those by Dostoyevsky which a character of a nihilist emerge. They believe in nothing, has no roots, does not abide by human values, rejects all authority and regards himself outside of the mainstream of culture. If there is poverty and hopelessness, wherever people have no reasons to go on living. In many cities around the world, the areas are not hard to find.

Mr. Payne’s book is a good read to ensure hope and openness are hallmarks of the countries we live in.

Linking to dividend paying stocks, in some ways the companies in general help make the problem bigger, although there are plenty of exceptions. As shareholders we want the companies to pay dividends and make profits, how they do it is not our number one concern. Whether they do it is. There are exceptions to the rules, there are many companies trying to give hope to people in general as well as providing great goods and services. Try to invest in them.

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

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