We all approach intersections differently, yet we all know the rules or we could not pass the drivers licence test. To turn left is the biggest challenge people tend to face particularly if it is a busy intersection. Some people will confidently approach the intersection, bide their time and make the turn as it was a normal part of driving. Others will approach the intersection and only want to turn on the green light if the way is absolutely clear – which is near impossible because it is a busy intersection. Others behind them will become frustrated as noted by their reaction after they turn – they step on the gas to make up for lost time. In addition to the vehicles, the other players on the road are people and bicycles and each of them at times make up their own rules. The cyclists using the pedestrian crossings, the people walking not following their rules. Together it can be a complex problem to solve, although it sounds simple.

Linking to dividend paying stocks, there are similar characteristics to investing as driving. Some are too confident, the market will teach you humility. Some are too cautious, although that can be a good strategy. As many times of drivers, there are investors and as long as the drivers end up home safely that is what is important. One method to get the best of both worlds is buying profitable stocks that pay a dividend. For the cautious, the dividend and on going profitability are the keys. For the too confident check out the ten year records of many mutual dividend funds – they tend to be higher than great performing funds one year ( then is when people should have sold) which lose money the second year (this is when many people sell), your average return was lower than the dividend fund.

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

Last week it was reported by Reuters that Koninklijke Philips the Dutch conglomerate that started making light bulbs 123 years ago is splitting off its lighting business in a bold step to expand its higher margin health care and consumer divisions.

In many homes, the light bulbs have the Philips name on them, Chief Executive Frans van Houten said he appreciated the magnitude of the decision but the time is right to take the next strategic step for Philips. Mr. van Houten said “Great companies need to reinvent themselves and we can do that, we can stay relevant, we can grow and we can stay successful. It takes courage, but it is a path we have been preparing carefully.”

The move is designed to bring better returns for investors as the lighting division is either sold  off to investors or listed on the stock exchange. Philips has built and spin off other companies including ASML the chip maker, Polygram the music and film label.

Linking to dividend paying stocks, because we are people, we often get attached to the reason why we bought the shares. In Philips case, you might have started buying the light bulbs, researched the company and its share in lighting and then bought. It has evolved and it still a large company. If the lighting is separated from the other sections, the other sections because they make more money on each sale or higher margins, the stock should trade higher on higher multiples. It is important for companies to look at their history and prepare to sell the parts if that is desired by the board.

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

Those of who live in large cities are spoiled when it comes to making food choices, particularly if the city has many people from another the world living in it. The reason we are spoiled is food from around the world is not far from our doorstep, even though most of us will buy very similar types of food when we go shopping. An interesting statistic was 97% of the purchases at the supermarket are for 3 % of the items offered. When we begin to think about food – it is a very broad subject, but Reay Tannahill in Food In History, Stein & Day, NY, 1973 tried to paint us a picture and allow you to do more information if you desire. Some of the early observations are even if we can get food from around the world, most of us eat according to where we live or the norms of where we live. The food is easily available and relatively inexpensive. When people travel from one part of the world to the next, they bring their food habits with them and will try to obtain them or grow them where they are. It has been done for thousands of years and likely will for more years to come. Even though many over the years  could not tell you the Nutrition Facts, on the label of many foods we purchase today, they knew what foods kept one reasonably healthy. There has been for centuries a divide between what the rich and the poor eat, history is written by those focusing on the rich. The other aspect is you may have heard of the 100 mile diet, for the reasonably wealthy there has not been a 100 mile diet for centuries, remember North America was founded because the mark up on spices (pepper, cinnamon, ginger). In 1621 on 3000 tons of spices bought in the East Indies (Indonesia) for $227,000 by the time it reach Aleppo, Syria  – the buying center at the eastern end of the Mediterranean was now selling for $1,972,000 and still needed to be marked up at retail.

Linking to dividend paying stocks, everyday we must eat in order to stay alive. As many of live in urban areas, there are wonderful choices available to us. If you live close to a mall, the food court has an array of choices as well as in many neighbourhoods there is sufficient demand for restaurants of one country or another. The neighbourhoods are easily accessible for you to try and like the food. From the food you begin the journey to the culture and soon the world is your oyster. To continue to try the foods, it is good to have dividend payments from your investments – whether you reinvest or whether you try something new, it is always good when the income is put into your account. On top of that over time, the stocks will rise in value and you can visit the countries of the food you enjoy and have the best of all worlds.

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

In many newspapers over the years, ideas of how to live well without spending too much money were published, one such column was The American Frugal Housewife by Mrs. Lydia Child, Harper & Row Publishers, NY, 1972. Mrs. Child wrote in the 1830 to 1850’s and was a very popular column. The definition of frugal is not cheap, it means not to waste. Frugal means reusing fabrics for other things needed in the household and knowing which chemicals around the house can be used for more than one thing. This aspect of frugal means you need to understand which cleaning materials can do more than one job. If you think about your cleaning products in your home – can one solution do most of the work or do you have many? one for each specific use? i.e. a solution for windows, a solution for floors, a solution for bathroom? do you have any idea what the main component is except for the lemon or orange freshener like me? One of many ideas about furnishing a house is do not spend all your money at once. Nothing is cheap that we do not want. Buy merely enough to get along at first. It is only by experience that you can tell what will be the wants of your family. If you spend all your money at first, you will find you have purchased many things you do not want, and have no means left to get many things you do want. As riches increase, it is easy and pleasant to increase in hospitality and splendor; but it is always painful and inconvenient to decrease.

True economy is a careful treasurer in the service of benevolence; and where they are united respectability, prosperity and peace will follow.

In the 1800’s most people lived outside the big cities and grew vegetables, thus many of the pages deal with household chores, cooking and canning for the winter.

Linking to dividend paying stocks, it is easier to buy into a company making profits than may make a profit. For one those making a profit will tend to have higher multiples for the price of stock and if they are profitable they can pay a dividend to the shareholders. The lesson to learn from the Frugal Housewife is take your time, buy what you can afford without using margin, and add to your holdings in the future. Prices of stocks will move up and down or fluctuate, which ones go up and down we do not know until they already have moved. We do know profitable companies will tend to go up in the long run and with a dividend payment, when the shares go down, you are still receiving a return on your investments.

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

The book Spoils of War – The Human Cost of America’s Arms Trade by John Tirman, The Free Press, NY, 1997 while wrapped around the sales of helicopters to non US countries also explores the history of Middle East in terms of geopolitics. For many years, the influence of the French and British and the countries ensured the oil was pumped to their countries. The countries would back leaders who continued to assist them. After the second world war, the US begin to play a greater role in foreign affairs in particular its substance against communism or to stop Russia via the cold war. The Middle East because of its geographic location became much more important and Turkey, Iran and Iraq with borders and particularly Turkey controlling the entrance to the Black Sea (Russia’s southern Navy). The countries of US, Russia, UK, and France were less interested in the internal operations of a country and like most countries around the world there tends to be wide opinions between the best religion and which style of governance there should be. All countries in the world have a left (tilt towards communism) and a right (tilt towards capitalism) as solutions to solve the underlying problems of the people in the region. All countries tend to have a relatively small group having large land holdings (feudal society) and many people barely surviving. Within the mix is besides different types of religion – Christianity, Islam and others; all the different types of Islam and Christianity and all the different divisions do not necessarily always get along. The leaders play off the different types to stay in power. In the book, Turkey as a member of NATO, buys Black Hawk helicopters to attack the communists within its borders – both known and suspected sympathizer, also affected were Kurdish which the leaders of Turkey wanted to surpress.

Linking to dividend paying stocks, as a shareholder you favour capitalism and desire the goods and services your company produces is used by as many people to ensure the company continues to produce profits to the benefit of the shareholders. When you go beyond your country borders, there will be all sorts of agendas and old grievances in play. Ancient countries have great stories and terrible stories in their past, your product may or may not be in contact with the terrible stories but all political parties do some sort of propaganda to allow them the greatest support. Sometimes it gets carried away till politicians rely whatever system they pick has a need to balance the books. What seems simple looking in, is actually very complicated puzzle to keep power. Worry about your goods and services, not the internal workings of the country where your goods and services are sold.

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

When the book Spoils of War – The Human Cost of America’s Arms Trade by John Tirman, The Free Press, NY, 1997 was picked up my thinking was how diversification of buyers leads arms manufacturers to ethical decisions. Instead while there is some of the that in the book, the focus of the book is American Policy in the Middle East with a focus on Iran and Turkey and the manufacturing towns in the US where the arms are made. The arms trade were the biggest employers in Connecticut, the Fort Worth area of Texas and LA. The state of Connecticut at one time had over 200 arms company forming the bedrock of the manufacturing industry and employing thousands of workers. At the time of the revolutionary war – Colt, Winchester, Remington Arms, Smith & Weston and Sharps were based there. Later GE engines and the Sikorsky helicopters were based in Connecticut. The GE Engines powered many jet engines as well as helicopters which changed the manner in which warfare was and is conducted. The book focuses on Helicopters and pays homage to Sikorsky’s strengths as an engineer were the necessary attributes of persistence, discipline, and hard work. Plus he had a remarkable mysterious faculty or intuitive insight to leap forward the technology needed. If you know the Blackhawk Helicopter that is one of his inventions.

People generally know about the left wing policy think tanks, there are similar right wing think tanks. When the right wing think tanks offer ideas the military suppliers like, money flows into them. All American Presidents must decided what he wants in foreign policy buffered by the largest and most advanced military in the world. Do you build up the military with the idea the lesser countries will not attack a strong military country? do you cut back the military and have the money go into something else or do a tax cut? Time will tell for no one is really positive of the best answer.

Linking to dividend paying stocks, all profitable companies are drawn into policy think tanks – the senior management’s job is to consider 5 years and beyond and anything the government can do to help your business, is a good thing for your business. By helping the business there will be spin offs into the community and larger boundary defined governments. Jobs are important because in some communities the industries that are there, were there for a reason and if you live there you support your local industries. If a company manufacturers arms, and government policies change every few years so who you sold to was your friend and now is your enemy, it is your fault the arms are used for things that are considered unacceptable in your country? in the Middle East who the friends and enemies changed every 10 years, but to grow the business sales are needed beyond the domestic borders.

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

On the North East of the US is a bank called TD – it also has operations from Maine to  to Florida and is located in Canada. If you had bought 100 shares in 1983 and left it your account, you would now have 2,400 shares and the dividend would bring you $4,500 a year which is more than the 100 shares cost in the first place.

What is the catch? it takes time, but your research included stocks which can grow their dividends in a predictable way. The word predictable is the noted because the firm which was focused on John Heinzl’ s column Dividend growth – an investor’s best friend jheinzl@globeandmail.com is Kaspardlov Laverty and Associates who run a Predictable Dividend Growth fund.  According to Pat McHugh the other indicators he looks for include:

a relatively low price to earnings multiple

a relatively high dividend yield

a high return on equity or ROE

a high degree of earnings as measured by stability of income.

These things matter for what they should tell you – dividend increases, because that signals a high level of confidence in the future. That and it would look bad if the board of directors increased the dividend and then turned around and said we made a mistake, because the first question shareholders would ask is what else did you made a mistake on?

The return on equity offers the company has a very good cost controls or they have their pricing model correct. The companies are probably focused on the long term.

Linking to dividend paying stocks, much of investing is picking the right stock in the first place. If you pick one which pays a dividend, has the ability to raise the dividend in the future, then you should be able to hold an receive the dividends for a long time without worry and risk. If the company can pay their dividend, because they are profitable the multiple at which the company’s stock trades rises over the years and you are wealthier.

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

One of the many books are written about the weather is called Extreme Weather by Bonnie Schneider, palgrave macmillan, New York, 2012. Ms. Schneider is a Meteorologist and her focus is a guide to surviving many types of natural disasters, for similarly to disaster planning on an individual basis most of us know about it but we really do not do. We have ideas, we tend to think our spouse would take charge and things will run smoothly similar to the way they were running before. However, if you were involved in a flash flood or tornado or hurricane or heat waves or snowstorms or tsunamis or something else and lost property what would you do? The reality is most of us would wing it and rely on our credit cards for a period of time. Many of us moved away from our immediate families to work which is a good thing, however it times of crisis do you know where to turn to? what agency would you look towards? In many disasters individuals have to help themselves first and then government and its agencies come later.

Linking to dividend paying stocks, on the checklist is having an emergency fund, a good idea is to invest the money in a monthly plan that grows and hopefully the disasters does not happen. The fund would at least ensure money is not going to be on top of the list, it should always be people first. Houses can be fixed or rebuilt, many people live in the same house for 30 plus years, but they sell it. If you buy a new car, you likely sold the old one – we are all capable of letting go stuff. Natural disasters just force us to do it sooner. He all hope for a long life of stability and the big action is on the TV screen either the news  in a far away place or in a fictional TV show. Even if the news is in a faraway place there is always a connection to the area in which you live, you may at first do not know about it, but it seems someone in the community is connected to the event. The world is smaller than you think it is.

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

Around the word, the first conversation between people has to do with the weather. Many days are nice and wonderful, some days are too something either hot or cold and then extreme weather happens. It used to be every 25 years, but now it seems extreme weather is happening every couple of years and maybe every year. Not surprising books are written about the weather and one of them is called Extreme Weather by Bonnie Schneider, palgrave macmillan, New York, 2012. Ms. Schneider is a Meteorologist and her focus is a guide to surviving many types of natural disasters. Part of it is planning  and part of it is luck. What we do know is extreme weather has a habit of dislocating normal routines after the natural disaster is over. For example, if there is flooding and you own a property, the water will have gotten into the house and it will take a long time to clean it up. No matter what type of extreme weather – it often involves some people dying and a desire by the survivors to talk about more education or what to do when something of that nature affects their community. If you need help with a check list – Ms Schneider’s book offers several chapters on things you can and likely need to do in advance of Extreme Weather and some of them are things you can  do even if you do not normally get extreme weather or it is a useful checklist no matter what type of weather is going on.

Linking to dividend paying stocks, if the business world because people have bosses, many types of plans are made and tested. What happens to the company’s operations if extreme weather happens? What are the back up systems? What is the normal time to be in reasonably normal operations again. Planning has taken place. We expect company’s to have made many plans to offsetting the negative impacts extreme weather has on the company and maybe even to take advantage of opportunities if the competition has been affect more than normal. If it is good enough for the company to have plans, it follows it is good enough for the individual. If extreme weather happens and the company is not prepared or manages at a below par level, it is time to look for other alternative dividend paying companies.

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