Ralph Nader is an interesting person – from his early days crusading against GM for safer automobiles to running for President to being a good person trying to make the system better, for he sees many areas of improvements. Mr. Nader has written many books and when a person wishes to run for President, often times they sign a book deal, which helps finance the campaign. The biggest supporters buy books and give them away, hopefully they are signed for a small contribution to the campaign. Mr. Nader never did that as a Presidential candidate – his books are more thoughtful including the 17 Traditions, Harper Collins, 2007. The traditions are the ones that make any family successful – the traditions are listening, the family table, health, history, scarcity, sibling equality, education and argument, discipline, simple enjoyments, reciprocity, independent thinking, charity, work, business, patriotism, solitude and civics. For each of the 17 Mr. Nader describes his family and particularly his parents directions and how each of the above fit into the traditions.

Linking to dividend paying stocks, the traditions of meeting customer demand and staying in business for a long time are wonderful traditions. Similar to the 17 family traditions of Mr. Nader, it is to be expected not everything went well all the time. Each family has setbacks, challenges but manage to keep the right attitude and continue. From an investor point of view, one can understand the setbacks, but as long as the company is profitable and pays the dividend, it is someone else’s problem. The 17 traditions that Mr. Nader lists are excellent traditions for everyone to have and bring to the workforce which would make the world a better place.

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

If you like running, the book 4:09:43 Boston 2013 through the Eyes of the Runners by Hal Higdon, Human Kinetics, Champaign, Illinois, 2014 is a terrific book. The book focuses on the Boston Marathon race and the people who come from around the world to run it. If you are a marathon runner the biggest and most famous race is from Hopkinton to Boston, Mass or the Boston Marathon. It is run the third Monday in April and to run you had to qualify at other marathons. For most of the 23,000 runners, winning the race was not something to be considered but finishing the race is the victory. For the Boston race is more than a Marathon, as the book discusses the day is called Patriot’s Day and the race is packed with spectators. Most races have friends and family at the end of the race, Boston has spectators for all of its 26.2 miles. People gather for BBQs, to cheer, to be the added value in the race, they are part of what makes Boston special. The book uses a variety of people’s perspective on running the race, including the logistics of it as running is seemingly an individual pursuit, but there is a great deal of community and support involved through running.

Linking to dividend paying stocks, while there are many marathons to run in, there are only a few great marathons and the granddaddy of them is Boston. The tradition, the need to qualify to run the race, the spectators that line the course, all lead to the Boston race as something greater than just a race. Similarly there is many, many investments to choice from but from the many are stocks that pay a dividend seem to last for a long time. There is tradition of paying the dividend, from being a profitable company, from the shares to increase in value over time. The race from the company’s perspective is a marathon for every company goes through management changes, trying to execute their strategic plan, and do good by their customers. From an investor point of view, the long term perspective means the dividend payments should be continually paid and shareholders benefit.

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

Clockers is a term for street drug dealers who are on 24 hours a day to supply the people who buy some drugs for a hit or two. The term came from a book by Richard Price called Clockers, Picador Publishing, NY, 1992. In 1995 this best selling book was turned into a movie directed by Spike Lee. When a person is a clocker they are very close to the bottom of the food chain of drug distribution, however they will likely earn more money than someone working in many 9 to 5 jobs. In between earning more money, there is the cycle of police and violence associated with the job. Drugs are still illegal and the police have to enforce the law; knowing when one person is removed others will take their place for the money for consumer goods is a heavy draw to the job. In the book the Clockers which takes place in a fictional job in New Jersey, but one does not have to look hard in the closest city you live in or near to see representative buildings. The people see the lifestyle and focus on the consumer lifestyle, not what they will be doing in 30 years time. Everyone thinks they will be the exception, including one of the leading characters who tells people to save some of their money – included in their accounts should be an account for bail money. In addition owning rental real estate would be a good idea, but somehow the character never gets around to doing it, for they want even more cash for consumer goods and living below the radar, but the police have them on their lists of the known suspects.

Linking to dividend paying stocks, unlike the clockers who live day to day and expect their life to include high consumer spending, jail time, and hanging around. investors in dividend paying stocks expect to live into the future. Whether that is 5 years away or 30 years, the consistent dividends will make financial lives easier and your overall wealth to increase with no jail time. If you expect to live well into retirement, then dividend paying stocks are for you.

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

One method for investing in stocks is trying to pick stocks which have a moat around them or protection which limits the competition. Through the limited competition, there is an ability to control prices and to ensure a reasonable return on investments which can translate into consistent dividends. As an investor you like stocks for this for they have been and continue to be long term investments. You may have wondered about the moats and such references. In times gone by, many towns were built with defenses around them – they were similar to castles but bigger. An added protection around castles were water, but you did not want to swim in the water for it was likely similar to a septic tank.

An interesting book about breaking the defenses of the castles and towns is a called Ancient and Medieval Siege Weapons by Konstantin Nossov, Lyons Press, Guilford, Connecticut, 2005. People have been building walls around their communities for centuries and the book starts with Ancient Egypt in the 23rd century BC. The book moves to the Bible stories of Joshua and the siege of Jericho. Jumping a few hundred years leads to Alexander the Great who took over many towns to expand his territory, particularly helpful was an elite detachment of the hardy and most experienced soldiers (think about Seals. In the Roman times Cesar had perfected Roman siege warfare. Included in his troops was a legion of engineers. The real secret to Roman success is having the patience and perseverance in carrying out a siege. To break a town could take years and the delicate balance of destroying crops and water supplies to starve people and managing the lands after the siege. Every hundred years or so, new weapons were developed from the ability to tunnel (have to give a distraction so nobody notices); to building moveable towers to be at the same levels as the town of the town; to large rock throwing devices to finally the cannon.

Over time, the nature of the land decided which method of attack was done. Generally most of the sieges were done in the spring and summer. It was easier to move materials and nicer for the soldiers. The two methods of capturing a fortress were an assault and a passive blockade. Each has advantages and disadvantages. For example carrying the siege engines was expensive and needed people with the discipline and knowledge how to do it. On the other hand, a passive siege tended to result in fewer lives lost. However, a passive siege allowed the other side to gather outside friendly forces to help them and lead to a squeeze of the passive army. Supply lines are something people tend to think of last, but no supplies means hungry and tired troops.

The main steps taken by the defense were to prepare for defense. Be prepared is the motto for Boy Scouts, and being prepared in terms of supplies and being independent when the gates are closed. If possible use the same tactics against the enemy. Ensure the builders monitor the walls and try to detect any undermining work. Sneak attacks to keep the attackers off balance and be prepared to fight in the streets or lose independence and never forget the treaty which protects the towns people by buying the attackers off.

Other strategies to use – use treachery. In every crowd, people have their own agendas and living is usually very high on them. Find people on the other side who will help you, usually sons who feel they could be king is a good starting point. The easiest method to win is with cunning. Using a variety of methods which the other side does not expect is a tried and true strategy. Blend into the crowd of the town you wish to siege in advance, when the main army comes, you already have help inside. An example of cunning is to lay siege and then back away as in retreat, and then attack with all the might.

Linking to dividend paying stocks, with these stocks their is a moat around them when you buy them. Sometimes it is the cost to entry, sometimes the legislation, sometimes it was the people. Understanding the reason for the moat as well as strategies to cross the moat into the castle, as long as you can see the moat is not being crossed, you can be contented to collect your dividends.

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

If you are alive you likely know about debt, for the bulk of the population it is hard to buy consumer goods without debt. Prior to credit cards, people essentially save either by themselves; went to the “corner” store which offered some credit for many people did not receive a weekly or bi-monthly wage. Farmers sold crops in the fall, paid down their debts and were borrowing again in the spring. Anyone who fell behind began to work the big deal, partly to extend their payments and once in while there really was a big deal; just like sometimes there is a lottery win. In the book A Fate Worse than Debt by Susan George, Penguin Books, London, UK, 1988 the author writes about the third world debt crisis. This is a crisis that has not gone away and in 2008 spread to the first world.

Debt of countries are paid by taxpayers, and as long as the country has money or can gain money they can receive credit – how they manage the country is a different story. In many countries, there is flight capital or money received in one country is quickly taken to another country which overlooks the origins of it, but once deposited is considered good money. There are multiple examples of countries building plants or processing factories which absorb a great deal of money for the country and work at less than 25% capacity. However the political structure benefited and could say look at what we are doing for you. In many countries the leaders enrich themselves and lead very luxurious lives and in many countries once the country is in debt the interest payments continue to mount and to have relief means to follow a agenda not necessarily the best for all its citizens.

The last point is the key, the leaders may talk about better lives for its citizens, but many politicians or leaders or their families end up with far more assets or wealth than they came into the office. The wealth of the country seems to go into the ruling group’s bank accounts. Understanding in most countries, getting elected or taking rule of a country is expensive, those debts are repaid quite fast. Ms. George book focuses on people in the countries around the world where credits by the IMF and World Bank have been given and the effect on the poorest citizens. The poor tend to get poorer, for the government in order to repay the debts most come with either increased exports (raise money) or decrease internal spending, the option of raising taxes is a non starter. Many countries around the word try to increase their exports but their exports then face greater competition which decreases the value of the exports which means the next step is to tighten government spending including decreasing people in the workforce. It is not hard to see how the effects go downwards fast and basic staples of people increase in price.

Linking to dividend paying stocks, some companies export their goods and the debt which is incurred by Third World countries go to purchasing the imported goods. For your investment that is a good thing, if it helps in the home country it can help in another country. The larger issue is how much is your company dependent on these type of deals, if they are too dependent, countries in debt will go through a crisis and need bailouts by countries in surplus and that takes time, willingness to negotiate and getting something to be paid back rather than nothing.

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

100 Ideas That Changed the World is edited by Jheni Osman, BBC Books, London, UK, 2011 The BBC asked people who work in Science, Medical and Technology fields what is the great invention which changed the world. Not surprisingly depending on where you work, your idea of what changed the world will tend to be related to what you do. That is great, that is the way it is supposed to be, each of us are exposed to different perspectives and with this type of list, none of them is wrong They ideas are interesting and worth reading because they may stimulate you to think of the world differently For example, one of the ideas is who ever invented the printing press, for those of us who are first inclined to pick up paper, this might rate high on your perspective. The younger people who rarely pick up paper, this is an idea on which something better was built – the micro computer Another idea in the book is the Big Bang Theory which took many years to move from the astronomy labs to a TV show or an idea which is generally accepted And there are 98 more ideas which lead to other ideas which lead to difference in the way the world is operated and understood.

Linking to dividend paying stocks, many people have many ideas of the best method to make money investing, one great idea not in the book was the invention of compound interest Everyone knows what happens when compound interest works against you – credit card statements balances go rapidly higher, but what happens when compound interest works for you? Dividend stocks help with their dividend payments on a consistent matter and increasing over time, as well as the capital gains which come from owning profitable stocks If you can have compound interest work for you, on the financial side of life, your bank account will be better.

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

If you go into a department store and look at the cosmetics section generally the main floor – you will likely see the Estee Lauder brand – Youth-Dew, Clinique, Aramis, Night Repair, and others. Estee Lauder was a person, she founded the company and helped grow it to a successful company and her story was written by Lee Israel called Estee Lauder – Beyond the Magic, Macmillan Publishing Company, NY, 1985. It is always interesting in the beauty world – only a few companies were run by woman, most of them were run by men.

Part of the story of Estee is the person and part is building up the company. In the beauty business, there is a great deal of looking to ideal beauty and thus the emphasis on having the “right” people use the cosmetic. There is always many people in the “society” pages or entertaining is a good thing. Another aspect is how cosmetics are sold. At the present time, people can and do buy on line or the internet but usually the tried and true method is sampling. You need to try the cream or smell the fragrance and the cosmetic companies set up their booths within the department stores. This is where you need to sell to customers and Estee was very good at it and could teach it.

Everyone has an idea of what the best store is for items, including cosmetics. Just after the war, in the US the top of the line store was Saks Fifth Avenue, to be in Saks was to be in the business. Saks was in the demand business, if there was a heavy demand for the line, they would carry it. If a customer or two asked, often a salesperson went to a different store, bought the item and charged the customer the retail price. One method Estee used was to give her lipstick in metal cases as opposed to plastic ones, people demand the items and Saks carried the line.

Another method to attract attention which is still used is the gift-with-purchase. It came about because of Estee’s personality and belief in the superiority of the product. The gift says – Try it. I know you will like it. I know you will want more. From this idea flow the next step sending  “junk mail” out telling people your gift awaits you when you come to the store. It worked (still does) and people bought other items as well.

In later years, reflecting on what made the company successful – Leonard Lauder said listen to your mother (Estee); listen to your customer, and understand the essential nature of your business. What that translated to was Estee Lauder was very good at the care and cosseting of their customers where they bought their product or point of purchase. The emphasis is on sell-thru not the sell in. Sell in means create a demand (advertise), get the goods out, and sell them to a customer whose appetite is already whetted when she comes into the store off the street an example is the Revlon company. Sell-thru is more expensive – because you need to rent space at the department stores Sometimes the advertising through the department stores ads were co-operative, sometimes the department stores made the manufacturers pay the rate. The larger and more profitable you are will depend on the relationship.

Linking to dividend paying stocks, each company will have different strengths which allows them to be successful. The strategies that work for one, does not necessarily work for another, even though they are in the same broad category. The example above was Revlon and Estee Lauder, both in the beauty business, both doing things differently. It is important to understand what makes your company better than the others, so if they begin to do something different, you can ask why.

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

If your company has interests in the mining field, one of the players in the mining industry is native lands. The history of natives around the world, was to move the natives from the land which they were on to another piece of land that is not needed for now. The government of the past, for a variety of reasons used the process all sorts of natives. One of the examples was a native group was moved to the oil fields of Oklahoma because at the time, oil was not used and the land was considered to be of lower value. When the economy changed and embraced the oil, the natives had to be moved again. At the present time, it is much harder and much less desirable to move people, which means land claims have to be agreed to. This pushes the natives from being a less desirable on the land to a partner on the land. In is natural for corporate and native interests to conflict – one wants to exploit the land and go on to he next mine, the other wishes to stay in the area for that is their home and they have adapted to it.

There are many books on the topic and one is written by Ellen Bielawski called Rogue Diamonds, Douglas and McIntyre, Vancouver, 2003. In this case, diamonds were found in northern Canada, but to do the mine the land would be changed. Although things have changed, the concept of time and the demands for making a decision likely have not changed much. The company wants to develop, it pressures the government to give them approval sooner than later; the natives ask were the diamonds there last year, so what is the reason for making a decision now? for many decisions in the band were made after all had a say. In most groups, some wanted more development, some wanted no development and some read the tea leaves and expected something to happen; for the divide between traditional and consumer society gets smaller every year. Questions about benefits would we get? should we get? what is our interests? come from the natives. Not surprisingly there are fewer, black and white answers many of them are grey or it depends, but it is no longer the old one of trust us.

Linking to dividend paying stocks, if you deal or work with a company that has paid dividends for a long time your expectation they will continue to pay increases as you expect the company to have ups and downs but continue operating for a long time. The company is made of people and relationships of humans will decide the answer. If the company can work with different suppliers there is no reason why it can not work with native groups. All over the world, people are people.

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

On Monday July 7, Let’s Gowex SA filed for bankruptcy, which is not necessarily a bad thing, because companies which file for bankruptcy generally had a long history of not being profitable and it was not that far from seeing a bankruptcy as the logical outcome. Gowex was different, it traded on the Spanish exchanges and for a time, the stock outperformed. The company is a Spanish wireless network provider across Europe and reporting increasing profits. With every company that outperforms there are analysts looking at why and some wanting to cash on the increasing stock price. The story this time is the analysts asking why? the analysts were short sellers who among their research looked at the revenue by its number of employees whose number showed the business per employee sales were far above the normal or rule of thumb. Either this was the most productive company in terms of revenue per employee or the numbers being reported were wrong. It turned out 90% of revenues were fiction or non cash. The investment company which uncovered this fiction was a short seller which meant it expected the price of the shares to fall and borrows the company’s shares, if the price falls buys it buys in at a lower price. If the shares go higher, the investment company losses money. The shares fell from $26 to $2 Euro.

The important thing about Gowex is who owned the shares, given the short sellers found the financial statements dubious at best. It turns out the founder of the company and partners owned 60% which at one time made among the top 20 wealthiest people in Spain, but at the time of bankruptcy, companies such as JP Morgan Europe Fund, Danske (a Danish firm), Henderson Global (a UK based fund) and Banco Santander owned shares. One would expect the Spanish bank Banco Santander owned some shares because Gowex was likely a client of the firm. However the others all stress on their websites and publications, they are looking for opportunity in the capital markets with their 1000 plus analysts. Did they miss something or did not look? or was the share price too much of a carrot to overlook the standard rule of thumb analysis?

Linking to dividend paying stocks, Gowex did not pay a dividend, very often you can avoid the losses of the market when stocks drop. Shares will go and down, it is a given but there are sets of shares which tend not to fall as much. For most companies which pay a dividend you can reasonably see if they are not going to pay it, for the signs in the economy should be evident. As well most companies which pay a dividend will first cut the dividend rather than not paying anything and as an investor you can see if you wish to hold or fold and try other dividend paying companies.

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