In the US, Prohibition was on the books from 1920 to 1933, or it was illegal to drink liquor in the US. This had two effects – one society more or less decided law makers were wrong and wanted their liquor, which lead to smugglers getting wealthy. It also made liquor barons in countries outside the US because the profits were enormous and there was no Prohibition in their country. The society included the police and law enforcement who both took brides or just looked the other way for the salons to operate as they had before. The book Booze Boats and Billions – smuggling liquid gold by C. W. Hunt, McClelland & Stewart, Toronto, 1988, talks about the process and people involved in the operations focusing on Lake Ontario. However, all the Great Lakes were involved and the biggest importer was the group lead by Al Capone. In the western states – the booze came by truck; in the eastern states – the boat played a role. When the US government passed the legislation, distilleries expanded in Canada – Seagrams, Hiram Walker, Corby’s became some of the world’s largest distilleries in the world. The process was the customer was based in Cuba or Mexico (all three countries did not have a prohibition) and once the booze was picked up, there was plausible deniability of where the booze went. With the plausible deniability, it was legal therefore legitimate business.

Linking to dividend paying stocks, owning the distilleries at this time and well into the future was very good business to own. The markups were very large and that means profits were high. In 1929, a Seagram owned distillery was producing whisky at $10.50 a case and selling for $50 or a profit of 39.50 a case. The Al Capone organization was buying between 8,000 and 10,000 cases a month or Seagrams was making plus $300,000 a month. To run the business, all levels of government needed to overlook the law which most people believed was too harsh, but governments move slowly to change laws. For example until the late 1920’s the US Coast Guard had 10 slow ships to enforce the entire Great Lakes system. the In this example, what is a law abiding citizen to do? buying shares in the liquor companies means you must know the liquor ended up in the US, but it is legal in Canada or Cuba (rum distilleries). The profits are great and the government moves slowly to change a bad law. When the law changes the price of the middleman should drop and distillery can keep producing spirits, profits and dividends.

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

The Gestapo refers to the Nazi Party in Germany which had great plans for a 1000 year reign except for the leadership really never left its purpose and campaigning and running a government are different. The Gestapo – A History of Horrors by Jacques Delarue, Frontline Books, 2008 although the original version was published in French in 1962. The Gestapo were the troops dedicated to the Nazi Party ethnic cleansing and German Nordic ideal. It is estimated 10 million people died from their actions, plus the second Word War was needed to stop the ambition of the Party. They had expected to take over Europe with no consequences and all would be peaceful. In some countries the ability to take over power was easier than others and since the major powers essentially slapped their wrists, the party kept going.

There were many lessons from the Nazi and one of them is it is easier to takeover power than to retain it. In Germany, the Nazi party had made Hitler as the great leader, as the war was finishing there was a great power struggle to who should be the next leader. Another lesson is the top management structure of the Nazi Party, after the war was killed or in a few cases went into hiding which meant living similar to the opponents of the Nazi Party, there was poetic justice in it. Most leaders tend to want to live a long life, if you run the company or country where killing people is just another meeting, then your life will likely be short. If you want a long life – there are much better options.

Linking to dividend paying stocks, because no two people are alike there is a variety of management styles that are successful. If the company has a monopoly or monopoly like position, there will be all types of management styles. If the company has to protect its position in the marketplace by adding value to its products, then there are fewer management styles that will translate to actually ensuring value is added. Buyers of dividend paying stocks are looking to the long term and when management changes, people in the organization and those using the services of the company do not change very much. One method to doing research is to look who the seniors managers are for the past 5 years.

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

The Gestapo refers to the Nazi Party in Germany which had great plans for a 1000 year reign except for the leadership really never left its purpose and campaigning and running a government are different. The Gestapo – A History of Horrors by Jacques Delarue, Frontline Books, 2008 although the original version was published in French in 1962. It is often hard to read about a government who believes in purifying a race to the extent the Nazis did. A government that did not think about economics but stressing nationalism, patriotism, secrecy and was great on the propaganda fronts. Unfortunately, none of the above actually bring in revenues into the country but makes it go into debt. The government used massive amounts of slave labour, treasuries of other countries and eventually many of its citizens were killed in the war. The legacy leaves much to be desired.

There are some very good things the Nazis did, although most of them did not pass the test of time. The Gestapo function of the party was obsessed with controlling the police and military and thus the important posts were Interior Minister and Defence Minister. The Interior Minister emphasis was the police and information about everyone. The party had some of the best information access systems in the world, unfortunately it was used to spy on its own citizens. By controlling the police, meant the propaganda machine could be used to justify any action against somebody who did not agree with everything the Gestapo wanted to do. This meant legalized killing for the investigation would come to the proper conclusion. One has to remember, when the party was formed, part of its appeal was to street thugs who were brought into the Nazi government to continue doing the work of street thugs. Along the way if they stole, beat, controlled the black market  is was all in the name of the Nazi government.

This need to control the police and functions lead to something else the Nazi were very good at – when they moved beyond their borders to countries with “ethnic” Germans, the propaganda machine and how the police functioned were very carefully examined. The police were examined in terms of operations and people, so when the Germans occupied the lands the correct people could be put in or promoted to ensure a smooth transition to Nazi thinking. In some countries, the locals were much more accommodating to Nazi cleaning of anyone who did not agree with the party ideals. The non desired people were killed or used as slaves.

Linking to dividend paying stocks, a book such as the Gestapo has lessons about changes in leadership and how far one goes to ensure the directives of the existing leaders is carried out. In all companies, the President eventually will leave office and the new people will have to give loyalty to the new one. If the focus is on making money first, and other things well below the primary focus, shareholders will likely not interfere. If the focus shifts to pet projects of the President without making profits, shareholders will vote against the leadership.

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

At the beach before Labour day, the young children were building sand castles by the water’s edge and it was something people have been doing for generations. Many of the kids castles were simple in nature – use a bucket, fill it with sand and then use your imagination. On a different scale, there are very talented folks who build beautiful sand castles for competition and to attract the locals to a beach festival. If you ever are in the area, dropping in to see them is a worthwhile use of your time.

Going back to the kid’s creations, often with the help of a parent and you never know who is having the most fun. Sometimes the parents would display a perfect mound of sand then their child would quickly change the clean edges with the use of their shovels. Later the castles were built and the time is to leave, the waves will come and reclaim the castles. Castles built on sand do not have a strong foundation, either the next day or the next week, the waves will go on to the shore and the castles will disappear. Everyone building sand castles expect this to happen.

Linking to dividend paying stocks, when you examine your portfolio of investments what material are they built on? If you are a normal person, you first put money into stocks with companies you expected to go up 5 times their value and more, and that might have happened. Some people seemingly make money on lower priced stocks. Another method to make money is buying companies that pay a dividend and  are profitable. Those two elements allow for a strong foundation in the future and will make you money with limited risk taking. The companies stocks may go up and down, but they tend to go in the long run and along the way, because they are profitable they pay a dividend or income to you.

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

Labour Day tends to mean the end of summer as many schools are back in session, but it also tends to mean the growing season is beginning to wind down. Crops are still being harvested before the frost, but many should have been picked and sent to the local farmers markets or supermarkets for farm produce. In between all this is the fall fair, the big and splashy ones are in the large urban centres but the ones the author likes is relatively small town ones. The rides are better in the urban centers, but the food and artwork seem more desirable in smaller fairs. The portion size seems bigger, and the artwork because the fair is smaller and space for the artwork takes on greater significance – a whole building devoted to it, Also the young people showing their animals seem to represent any young farmer. The bigger fairs, people selling stuff which only is bought at these types of fairs is more prevalent. Whether you like the smaller fairs or large ones, it is hoped you attend or try to attend at least one or try to attend every other year.

Linking to dividend paying stocks, whatever fair you attended to, likely it has the annual one and the number keeps getting larger. Whether it is the world’s best or the best in the area, as long as you are there it had to be good. Similar to dividend paying stocks, some of the best profitable companies raise their dividends every year which makes the price of the stock higher or more valuable. Keeping it basic – invest in profitable companies paying a dividend allows you to look forward to next year’s fall fair.

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

In many libraries there are two sections of DVDs – the fiction or Hollywood type movies and the nonfiction or more educational video. Most people go to the fiction but every once in a while, try the nonfiction side. One video you may find is Fraud Squad which is one of those 10,000 channels on TV or you can go to their website http://www.fraudsquadtv.com and watch the shows online. In this case, Fraud Squad TV is the first season of the show or 13 episode TV series dealing with fraud. The headings are moving fraud, counterfeit money, charity fraud, travel fraud, home improvement fraud, identity theft, employment scam, pump and dump or investment fraud, car insurance fraud and others. The series gives you some ideas how the fraud works and measures to counteract the fraud, lessons everyone needs to learn. If you have a consumer fraud – the consumer protection act and letters to either VISA or Mastercard, will help you get your money back.

In terms of investment fraud, many appeal to high great consistent returns or earning money fast. The reality – it is very hard to earn great returns consistently unless there is something illegal going on – for example investing in the illegal drug trade. It is entirely possible to earn a good return consistently and every once in a while earn a great return, but generally that means somewhere along the line values had fallen. The last crisis was in 2008 where stock markets decreased in value. Now the global financial industry has stabilized, the markets have returned to where they were resulting in good returns if you bought after the markets went down you should had great returns, if you bought before and held, you should have returned to normal and made some money. If someone offers you consistent returns much higher than current interest rates, you have to wonder.

The other aspect of investment fraud tends to be the need to act now or lose the opportunity. If you have to act fast, do the opposite, the author belongs to a service club which meets every two weeks which means decisions only happen every two weeks or there is a process. For your investments try something similar in terms of process.

Linking to dividend paying stocks, at the moment because of low interest rates, one of the best investments with low risk has been dividend paying stocks. You can buy anytime and buying on a regular basis helps you (the author has a monthly plan) or  there is need to act as soon as possible. There are always opportunities in the marketplace, but if you make great money today but cannot sell, or when you can sell you lose money, those are opportunities to be passed by.  For a low risk and good return dividend stocks or investing in companies already earning profits is a good thing to do.

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

In the late 1340’s Europe was dealing with the worst outbreak in history – the Great Plague or Black Death was gripping Europe. The disease reduced the population of Europe by a minimum of a third and in some cases over 50% in a very fast death and is well written about in the book The Great Mortality by John Kelly, Harper Perennial, NY, 2005. The plague moved around the countries similar to trade routes and quickly spread through the population. No one really knew why people were getting sick and some were not. The plague we now know was carried by fleas on rats, but back in the 1340’s they did not have the infectious disease control centers we know. They just knew a disease was travelling around Europe leaving death in its wake.

The plague lead to a number of advances, one it is believed the infection ran out of people to kill or the bodies that were left, adapted to the genes. It also believed abnormal climate changes affected the rat population to move to the urban cities from the country. Prior to the plague, in many countries they were either faced with more extreme weather or earthquakes which affected the normal everyday life. The extreme weather could be it drought or rainy weather for 3 years or more, it order to survive people and animals had to move, and typically when people move they go to urban centers for opportunity.

Although the author hopes we never have a plague again, reading the book was hard to read because of the descriptions of death, what was interesting to this blog was how did people react to the plague? In many cities, a minimum of 1/3 of the people died and it was likely closer to 50%. One thing people did was to ensure they had been to the lawyers to update their wills, hoping somebody listed actually survived. People also turned to religion to try to make sense of it all. The religion had both good and bad – if someone dies of the plague what to do with the body and since there were so many deaths how to ensure their souls were saved? People also turned to the worst parts of religion by using the religion to blaming somebody (other religions) for the plague in the name of their religion. The conspiracy folks had a field day one can only imagine what would be going on using the internet. Another aspect of many people passing away is fraud, particularly if someone had money was easily found or stolen.

On the flip side, those that lived after the plague found many shortages – food, administration and work which sent up wages. It many areas it took hundreds of years before things were back to normal.

Linking to dividend paying stocks, the companies which produce dividends consistency prefer stable or near stable conditions, although there will be fluctuations here and there. The plague was very similar to the war where a third or half the population disappears, which produces very challenging situations. If the company has a reasonably diversified income streams it can weather some of the changes the regular environment offers. It is important to note some companies are more use to dealing with challenging environments than others just because of the nature of the business and it is good to learn from them.

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

Sitting under the mighty Oak tree … is part of a well known verse and it is likely memorable because many of us know oak trees. In the book Oak -the frame of civilization by William Bryant Logan, W.W. Norton & Company, New York, 2005, the author discusses oak trees. This column will touch on four stories – shipbuilding, architecture, oak barrels and root system in order you may discover a renewed interest in the oak tree.

Sometime ago the US Navy thought if we could only build a ship that functioned similar to the dolphin they would have the best ship in the world. The dolphin is one of the most efficient animals in the sea – they adjust to the waves and water pressure to go through all types of sea conditions. In short,  the dolphins wiggles through the waves. It turns out there was a ship based on the dolphin  – a Viking ship. The ships were made of cleft oak and had incredible adaptablitiy. The Vikings could sail, they could row, they could turn on a dime, the boat easily went through shallow waters and could be landed at the beach. The ships moved with the waves or were excellent ships in the ocean or closer to shore.The wood that made all that possible was the oak as it is strong, watertight, bendable and workable.

In architecture, between the 4th and 18th centuries, 95% of all buildings built in Europe were made of oak. Including famous churches and great halls. Most of them built by carpenters that had little formal education but through their work knew and understood the wood.

Oak barrels are an incredible invention – you can put liquid or solids in the barrel – without the barrel leaking or breaking. The barrels can be easily moved once something was put in the barrel by rolling it. It took skill to learn how to make a good barrel and when someone had the skill they were called either Mister or Master of the trade. The invention of the forklift meant square containers and less need of the barrel.

If you either look at the Oak tree – most of us know one type of another but there are many types with very adaptable seeds or accorns. If the weather changes, the oak tree will begin to adapt to ensure it will continue. The oak tree is one of the very few trees that has deciduous types (with leaves) and evergreen oaks. The root system will cover a wide radius and its roots have been known to squeeze through the smallest of openings. On top of all that a favoured bird of oaks is the Blue Jay which can carry 4 acorns in its beak which helps spread the acorns to a wider geographic area.

Linking to dividend paying stocks, the oak tree has many of the characteristics you should be looking for in buying shares. In terms of dividend paying – similar to the oak tree you want to buy a company with a flexility and adaptability to stay in business for the long term. You want a strong wood or has many uses or is needed by the populace to be better in their lives. The oak tree has been and is a valuable tree in man’s evolution, many good dividend stocks have helped and are helping countless individuals.

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

Sitting under the mighty Oak tree … is part of a well known verse and it is likely memorable because many of us know oak trees. In the book Oak -the frame of civilization by William Bryant Logan, W.W. Norton & Company, New York, 2005, the author discusses oak trees.  If you asked where can you find an oak tree, it turns out where you can them where we find civilization in Asia, Europe and North America. The story of civilization goes as the following we were hunters and gatherers, but what were we gathering? It turns out many were gathering accorns. Take off the shell. the Insides can be ground into a basic meal which is good for you, although the taste is bland which required the invention of stew. Last week a telephone directory arrived in the mailbox, because of the wide range of the oak tree many people have their last names associated with the oak tree. The oak tree is one of the most diverse trees and it is fortunate for all of us, the oak tree and people got together.  The oak is strong, comparative light, watertight, bendable and workable. The author has some great stories about the oak in terms of boat building, architecture, oak barrels and root system  which will be touched on in tomorrow’s column.

Linking to dividend paying stocks, the oak tree which many of us know for us in the urban environment seems like any other tree, but all is not what it seems. Similar to investing all stocks are shares in companies, but profitable ones are better than others. The profitable ones will earn more money in the longer run, the ones that pay dividends will be even more valuable. Like the oak the tree good investments are flexible, adaptable and have very specific reasons why they are good investments.

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