The Medici were once the most powerful family in Italy, the family ran a bank and one of its biggest clients was the Pope. In addition, the family helped sponsor and encourage the Italian Renaissance particularly around the city of their hometown – Florence. In the book The Medici – Godfathers of the Renaissance written by Paul Strathern, Vintage Books, London, 2007, the Medici were the dominant financial and political family in Florence.

In many communities, a group of families tend to dominate the political arena and conversely the financial sector. This is both good and bad, but it can be great if the right leader emerges and brings stability to the region. In the Medici times when families disagreed, were jealous, or had grand ambition,  the families often had private armies which lead to someone dying. Plots are hatch, the people back one group or another, people flee, come back and life goes on. Politics really was a blood sport. Thankfully, we now talk about it, not very often kill people. In the Medici times, the political aspirations is interesting reading.

Linking to dividend producing stocks, the head of the company have the ability to add to the wealth of the shareholders and can do so much more if desired. There has been a variety of Presidents who feel only the financial results are important; there are others who do both. The important aspect is the balance and where in the strategic plan it fits in for the President and the Company.

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

The Medici were once the most powerful family in Italy, the family ran a bank and one of its biggest clients was the Pope. In addition, the family helped sponsor and encourage the Italian Renaissance particularly around the city of their hometown – Florence. Besides being leading bankers, two members of the family became pope and one married the King of France. No doubt there are many myths around the Medici family.

One question is why did the Italian Renaissance start and flourish in Florence as opposed to the other Italian cities of Rome, Milan, Naples or Venice? In the book The Medici – Godfathers of the Renaissance, written by Paul Strathern, Vintage Books, London, 2007 part of the reason is the method the city states were ruled. Naples and Milan were subject to autocratic rulers; Rome was a backyards city subject to the whims of the new pope; Venice was ruled by a stable patriciate. Florence was a quasi-democratic republic and it could be the city because of its governance was open to innovation. Florence also had a long tradition of civic patronage; successful merchants were expected to contribute to the glory of the city,

Innovation can only happen when a host of factors are in play. The city does need wealth or to be prosperous (jobs for its citizens); there does need to be trade with the outside world; and people in the art world need to be paid to produce art. This attracts other artists to work with the existing ones and the cycle continues. Cosimo Medici was a conservative banker, but was also a major benefactor of the arts and the way people see each other.

Linking to dividend paying stocks. the Medici’s were conservative bankers who earned profits which allowed them to contribute to the culture of the city they called home. You will hear various leaders discuss innovation as it can happen tomorrow. The reality is a host of factors must be in play including the ability to allow for disagreement. Often times before innovation can happen new procedures or abilities must be developed. Once developed the avenues are then opened up for more innovation. Similar to the silicon chip becoming better each time which allows for your smart phone to have the abilities of your desktop computer and each time the possibilities grow. When you vote for management, ensure besides making profits to pay the dividends, their style of management allows for the company to continually improve.

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

The Agent is written by Leigh Steinberg, St. Martin’s Press, New York, and Mr. Steinberg is one of the top sports agents in the business. He got his start representing a friend Steve Bartkowski of Atlanta Falcons. From the modest start of one client his agency grew and developed to be represented by the movie with Tome Cruise called Jerry Maguire had a lot of Mr. Steinberg in it. Anyone looking at sports salaries now days can see that representing an athlete is a very lucrative business. But it has not always the case, salaries were much lower and so were TV contracts. Over the years the pie has gotten bigger and everyone can have a slice. As Mr. Steinberg relates the secret to being successful is representing the potential superstars of the industry, if you represent them, others will check you out. Mr. Steinberg believed and believes the athlete should have a sound foundation, care about his community ( part of the salary go to a start a foundation dealing with whatever the athlete cares about) and think about life after sports. There are very few 40 year old athletes in professional sports.

In the book The Agent, Mr. Steinberg talks about some the of the big names in professional sports as well as the owners. Which owners he liked dealing and why, as The Agent is in the middle. He wants to help the team, but have his client be paid at a premium number. The owner prior to the large TV contracts had only limited money to work with, perhaps owning the team was a secondary aspect to their lives. As owners of the team, one of the many perks is inviting people to your box to watch the game while you lobby them for something that will help your bottom line. To be an agent there is a lot of travelling involved – many frequent fling points will be received.

Linking to dividend paying stocks, similar to the agent, the company may start off with a big client, but that does not sustain only going expenses. The best agents are the ones very well prepared to be able to talk to owners and GMs in order to gain the type of contact the athlete demands. The agent will be interested in all aspects of the game, and get to know people in all the sports arenas, as well they need to relate and talk to the athlete and their support networks. Reputations take a long time to build but a short time to destroy. They must know the rules and expect the competition to badmouth them. Unless the company represents hundreds of people, there is little direct public investment in sport agencies, but the stories are interesting to sports fans.

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

The memoir by Paul Allen titled Paul Allen Idea Man, Penguin, 2011 is a the very interesting life Mr. Allen has since cofounding Microsoft. After Mr. Allen left day to day responsibilities what was he to do with his life and money? Fortunately for Mr. Allen he has been interested in many subjects or considers himself a generalist, but he has his passions. One passion is basketball and he wanted to be an NBA owner. That is great when the team wins, no so great when the team loses. The problems of ticket sales, arena and competing as well as being a fan come forth. Being wealthy lead to becoming an owner of the NFL Football team, the team was for sale and unless somebody bought it, the team would be moved. Mr. Allen bought it and the Seahawks are a very successful franchise. As a fan, you may know about the noise in the stadium, there are 11 players on the field and the hometown fans are the 12th man. The Seahawks fans are loud, passionate and community minded, for example, the 12th man has a flag and when Seattle makes the playoffs many flags are to be seen. The Seahawks planted the 12th Man flag on top of Mount Rainer as people raise money for the United Way.

The passion for sports plus asking what kind of content would people want most from a broadband network lead to Starwave now known as ESPN.com. One of the interesting story was when were people accessing the service? Turns out not at home, but at work – Monday mornings, noon (lunch hour) and before they went home. Those numbers change because of smart phones and tablets at home, because many people did not have computers at home, but they used them for work.

Mr. Allen has a passion for music and besides a concert hall at the University of Washington, he also created the EMP or Experience Music Project in Seattle. In order to be sustainable, besides having a wealthy backer, people must come and visit  which leads to programming which leads to other activities.

Not everything Mr. Allen invested in made money, he invested in Charter Communications in order to bring a broadband network to the major cities, except for Charter was not in the major cities, ending up losing a lot of money and needed to go through a Chapter 11 bankruptcy. Part of the problem was the competition is very tough and it was underestimated; another problem was the solutions being offered were ahead of times, not many people were buying into the future. At the present time your TV can act as your home computer and there is a number of people who want to do both at the same time. In 2000 there were very few. As time went on the solutions being offered are accepted and become normal but there is a lag time.

Linking to dividend paying stocks, when a company is performing on a consistent basis earning profits, the new people will not be as passionate as the founder. The founder lived and died the company, the new people were hired to do a good job, but there maybe some passion missing. It is important to see that the management lives and dies the company and are passionate about it and its effects on the economy. How does it do the extra mile when conditions change? a flood happens? the lights go out? how does it turn the lights on again? What passions drives the company?

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

The memoir by Paul Allen titled Paul Allen Idea Man, Penguin, 2011 is a the very interesting story of Mr. Allen has since cofounding Microsoft. The other cofounder Bill Gates is one of the richest men in the world, Mr. Allen is worth in the billions. From a relatively middle income upbringing to a very rich person makes an interesting story in relationship to what he does with the wealth once obtained? In Mr. Allen’s case he was and is fascinated by how things work, coding and what can the future look like. With idea people, many of their ideas are a little before there is a market or the ability to make money is found. Mr. Allen earlier in his life discovered coding and loved it, and when the first desktop computers were coming out, he and Bill Gates programed the language the computer uses to do what many of us want it to do. Basic eventually became MS Dos and most computers use the Microsoft language to run the computers. Mr. Gates owned 66% and Mr. Allen owned the other. They believed the software was more important than the hardware, while most early day companies believed the hardware was more important. After a number of years, running Basic, as computers became important in the work place, IBM entered the field but they were interested in hardware, thus they licenced Basic and MS-DOS which lead to the incredible growth of Microsoft.

In the book, Mr. Allen was thinking about the future and what could be. As the parts and the infrastructure began to catch up to what could be, there were many opportunities to be found and expanded upon. At first these were what Microsoft could do, later when Mr. Allen moved to doing his investments – he would invest in some of the ventures. For example, after MS-DOS is running the computer, applications become very important. An example of an application is MS Office which appeals to small and medium sized businesses and then everyone. The goal at the start was to make computers accessible to everyone, but each and everyone person needs to have a reason to have why they need to use it.

Linking to dividend paying stocks, in the case of Microsoft, it ended up as the standard program to run microcomputers which lead to explosive earnings and over the years a great amount of wealth creation. As time went by, the company needed to continually to change to keep its share as the uses of computers changed. The internet was not captured by Microsoft, neither was Smart Phones and a host of other uses. Microsoft is still a significant player but companies change quickly in the software industry. The leaders have continually changed as they way we interact and change to who we pay. The software industry has shown great wealth drivers of the economy and it is difficult not to want to put money in the area. One method might be to find out what software the more stable traditional companies use and as they change, change with them.

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

A variety of financial papers published lists provided by companies which access to the data and promoting their services. One such list was done by Craig McGee at Morningstar Research Inc. The big question Mr. McGee was asking was which companies have grown their dividends in the past years and are expected to continue to grow their dividends. Mr. McGee used a variety of criteria which were;

dividend change over the next 4 quarters vs the trailing 4 quarters.

dividend change over the trailing 4 quarters vs the prior 4 quarters

return on equity for the trailing 4 quarters

payout ratio using expected dividends as a percentage of the current year’s consensus earnings

What he found was 20 companies in Canada and the US which fit the criteria. The companies are meant as a starting point and also by looking at the Return on Equity how relatively safe and secure stocks give a healthy return for limited risk. If you are not getting at least the return of the best ones, perhaps your portfolio needs to be adjusted.

The companies are

Company                          Symbol      Expected Yield            ROE      Payout Ratio

PDL BioPharma               PDLI-Q            7.02%                   694.26%        29.13%

Enso Int’l PLC                    ESV-N            5.99                        11.58           50.85

BCE Inc                              BCE-T            5.07                         20.45            78.16

North West Co                  NWC-T             4.83                        22.71             81.69

Corus Entertainmt ,B    CJR B-T              4.46                        11.46              57.37

Shaw Comm B               SJR B-T            4.19                         18.45              62.50

Emera Inc                          EMA-T           4.12                         13.37             78.38

Mullen Group Ltd                MTL-T           4.09                         16.32           71.43

CIBC                                   CM-T            4.07                         21.68           44.44

PG&E Corp                          PCG-N        4.07                           8.80          60.67

National Bk of Can               NA-T           4.06                          18.35          42.11

Royal Bank of Can                RY-T            3.92                         19.26          47.89

Bank of Nova Scotia           BNS-T             3.91                        15.74           46.80

City Holding Co                     CHCO-Q        3.70                        14.0             49.84

CMS Energy Corp                  CMS-N          3.64                       13.10            61.36

Sturm Ruger & Co                 RGR-N          3.43                       80.27            52.81

CA Inc                                         CA-Q        3.28                       23.63            42.02

McDonald’s Corp                    MCD-N         3.26                       35.17             56.06

Dr. Pepper Snapple Gp           DPS-N         3.13                        28.59             48.24

GameStop Corp                         GME-N      3.12                       15.94             36.07

The above represent some of the best, but it should also show you the risk reward that dividend shares offer. For a relatively low risk, the return on equity has been very good the chart shows the dividend produces a plus 3% yield; the payout ratio shows the dividend for these companies can easily be maintained; and the ROE is primarily in the 15 to 25% range.

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

There is an ad for a new luxury car which starts off as Preconceived Notions …they tell you what is? whether or not it is true? In this case the car company is launching a new luxury car and trying to target those that believe an well established automobile similar to a Rolls Royce would have the same prestige as their new luxury car. Of the positive side, all car brands started at some point in time, all one time they were the new kid on the block. In terms of preconceived notions we all have them about different products and services, particularly if we do not use them very often. We also have preconceived notions about people and take only a few minutes or less to judge them, and since we all do it, it is okay. There is nothing wrong with having preconceived notions as long as we are able to adapt when new facts come forth.

Linking to dividend producing stocks, when you started investing you had a preconceived notion of investing to make money. It turns out being safe and secure is often the best method to achieve good returns. By investing in profitable companies which consistently pay dividends, you wealth grows by the dividends and the capital gains. It is also possible to buy a company that becomes an overnight billion dollar company, but you likely can count on your hands or even one hand the number of companies which did this. Then ask yourself how many stocks are traded on the exchanges and divide the two, the number would be a low percentage, actually a very low percentage. Thus the easier strategy is to buy companies that continually pay dividends which seems to be dull and boring but profitable companies are active In the mergers and acquisition category, for they can afford to buy the competitors or diversify their businesses. As long as the companies maintain their profitability and their dividends, you can stick with dull and boring, for in the long term you will have increased your wealth and that is what investing is about.

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

In the large cities in North America there are many wonderful hospitals and each year partly to raise goodwill and asking for donations; some of them publish a magazine with a few of the many new procedures taking place at the hospital. The stories are heartwarming, some great leaps forward from even a few years ago and raise expectations of the hospital. A number of months ago, visiting one of the hospitals on a regular basis and seeing these abilities to test and treat the patient are amazing. The quality of care which was run into was tremendous and from a personal satisfaction level, one could not ask for anything better. When reading these types of magazines, the heart warming stories are the most important, the second aspect is ask yourself what type of machines and procedures are the doctors using to do the new procedures?With the asking, you will begin homework to see if the machines are standard to all hospitals? are the machines continually used or generating revenue? are the companies investable? What you typically will see is some interesting hospital procedures done with parts of large company, for example GE. The company is a very large one, the revenues of the health care sector are important but GE is not just a health care company.

Linking to dividend paying companies, the large companies similar to GE allow the ability to invest into the health care sector, but that is not their only business. There are many companies in the health care sector, and everyone expects the health care sector to gain in size – partly because of demographics. The baby boom from the 1950 and early 60’s is beginning to retire and expected to live longer. If you listen to a small town radio – birthday and anniversaries the number gets higher every year or in general we are living longer. In terms of the health updates of the hospitals, if you have relatives or you begin to visit them more often, after the goodwill and hospital visit with the people, look around to see opportunities for investment in the health care field.

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

The Loggers is a book by Richard L Williams published by Time-Life Books, NY, 1976 written about the forestry industry on the west coast of the US. Prior to the gold rush which lead many people to the west, the trees kept people in the west (and still do). The timeframe of the book was the 1850’s to the 1900’s, the railways had not connected the country which meant people travelled in ships. The logging companies had gone through the good and easy wood in the northeast and the Midwest and were looking for great forests. The forests were found on the west coast, but the land is not flat which made considerable opportunities for solutions to be found. There was a need for wood to build ships, building growing cities in the east and the tall trees were the dream of many a logger. Saw mills were set up, although the pay for loggers was never great which meant when gold was discovered, the loggers migrated to becoming miners. Eventually many of them came back to logging. and the challenges to get the trees from high in the mountains to the bay where the saw mills were located.

In terms of the lifestyle, the work was hard for the loggers and when they eventually returned to town, the earliest cities always had a section devoted to bars, prostitution and gambling. The loggers would typically sent 3 or 4 months in the bush, then come to town with money in their pockets. One bar in Portland called Erickson’s had a bar of 200 yards staffed by 50 bartenders ready to take the money.

When the railroads were built, the government gave them free land grants, partly to encourage the railroads to become sustainable after the railroad was built. In this fashion the other activities would drive traffic to the railroad, but as railroads were traded on the stock exchange, new owners would sell off assets to pay for other ones. Frederick Weyerhaeuser bought 900,000 acres of timberland from Northern Pacific Railroad for $5.4 million. Northern Pacific was thinking that Weyerhaeuser would transport the timber on the railroads as a customer. At the time Northern Pacific had 44 million acres of land which was quite the asset.

Linking to dividend paying stocks, as long as commodities such as trees are sustainable they make good companies to invest in. Particularly now as the economic situation changes and demand for wood products will be higher. The history of logging and other industries are interesting in how the loggers found solutions to their problems of the logs in one place and the mills in another. History also shows some companies have hidden assets, ie the railroads had grants of land, some of it becomes valuable which makes the railroads more valuable than at first glance.

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