At this time of the year, many Business magazines and newspaper sections publish what stocks should you buy to make money in the next 6 months. The emphasis is on growth stocks, those which you buy to make short term money and expect to sell in less than a year. There is a bias towards lower priced stocks, for if they move upwards you will automatically have a greater return. One piece of advice is if the stock is lower than the price of hamburger, perhaps you should buy hamburger first. Generally stocks are lower than the price of hamburger for a reason. (if you want to see how in touch your politicians are, sometimes asking them the price of hamburger is a good question to ask) Back to the sprint, it is a sexy race, trying to predict which stocks will go up in 6 months and it is similar to the Olympics. The most hyped and watched race was the men’s 100 meters race. Anyone who watched the Olympics either saw it or wanted to know the result.

Linking to dividend producing stocks, they will tend to lose the above race, unless the general market goes down for dividend producing stocks tend to hold their value longer. The stocks generally do not go up as fast, nor do they go down as fast, unless they have to cut their dividends. If you wish to play along in the business stock race, rather than the buying the names listed, focus on the the bigger picture. For example if many of the stocks in the race are in the housing sector, find dividend stocks which benefit from improvements in the housing sector. If the pundits are correct and the individual stocks do go up, you will made even more money with your dividend and capital gain. If they are not correct you still receive a dividend payment.

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

Referencing the book The Story Solution written by Eric Edson, published by Michael Wiese Productions, 201. Mr. Edson believes there are 23 interlocking steps used in every successful screenplay to create dynamic, 3-D heroes, and captivating emotion filled plots. In a two hour movie – there are many things going on at once – all the actions, all the words, all the non-verbal communication must be focused on the story. Another layer is the plot needs to be set up, a conflict raised, and have plot resolution by the end of the movie. During act one the characters that you like are introduced, something has to happen to make this story only this story; and a stunning surprise to move the hero along; In act two the hero’s conflict with the adversary becomes personal, love scenes happen, dramatic action rises, and another stunning surprise.  Act three has the final showdown between Hero and Adversary and then the wrap up.

To link with dividend producing stocks, when you look at or read the above, there are many variables happening in the movies to try to produce the magic on the screen. When it works it is great for the audience, but risk is present or there is a high potential for something not to gel or go wrong. In dividend producing stocks, there is one simple thing – the company either pays its dividend or does not. If there is a dividend cut or not paying the dividend, 99% of the time it is not a surprise. Before that happens, sell the stock and buy another one which is doing better, there are other companies that do pay their dividends consistently.

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

Continuing to reference the book The Story Solution written by Eric Edson, published by Michael Wiese Productions, 2011. Mr. Edson believes there are 23 interlocking steps used in every successful screenplay to create dynamic, 3-D heroes, and captivating emotion filled plots.

The wonderful thing about the movie is in two hours it can be a magical ride, no matter if you analyze the movie or not. That two hours means whatever happens, the element of time is the movie producer and scriptwriters greatest friend or enemy, the compensating factor is the plot structure. It becomes the single most important component of a screenplay. Similar to speeches and stories, movies that work are composed of 3 acts. If your prefer opening, body, and conclusion. If  the plot structure is correct, then the characters, the conflicts, the love interest will come together. The actors provide the mysterious element of chemistry for them and the audience.

Linking to dividend producing stocks, the most important element is does the company earn enough to pay a dividend and continue to pay it? If it does, the company is on a short list of names to look at, for most stocks on the stock exchange do not pay dividends. Once determining the payout, the next step is determine if the dividend has been paid for a number of years and the company can continue. What is the company’s story? What significant advantage does it bring that the competitors do not have? These questions are asked for you the investor to decrease the odds of buying a dud, but continuing to invest in stocks that hit for singles, doubles, and occasionally triples and home runs (to use baseball metaphors).

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

At a recent visit to a local Library, the book The Story Solution written by Eric Edson, published by Michael Wiese Productions, 2011 was an interesting find. Mr. Edson believes there are 23 interlocking steps used in every successful screenplay to create dynamic, 3-D heroes, and captivating emotion filled plots. My bias, similar to most people, is over the years, I have watched many movies – some good, some bad, but never took the time or desire to analyze why. Fortunately, there are people such as Mr. Edson who has to come up with 23 steps which a movie script needs. When we watch a movie, at some point we determine if we care about the movie or not. The 23 steps are designed to ensure the audience does care, for if the steps are not in the screenplay we definitely do not care about the characters.

Linking to dividend producing stocks, there are two reasons for tackling the subject – one if you ever invested in a movie company, you need to ensure the multi million dollar feature will actually bring in millions of dollars to the company. If it does not, the company is good short. The second reason is in most industries, including the creative industries,  there are steps to go thorough. Does following the steps automatically make it a winner? no. But not following the steps will ensure losses. Similarly with investing – does buying a company because it pays a dividend ensure you will profit for years to come? no, but it does dramatically increase the potential for that result to happen and then your can spend more time watching movies.

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

The writer was at lunch with a number of asset management people and invariably various stocks were talked about, one of the gentleman remarked, paying attention to various stocks means another reason to care for the country. In this particular instance because the gentleman was Swiss, the bias was Swiss stocks and a name mentioned was ABB. The comment caring for the country, can be two fold – the company you invest in has their head quarters in that country and through examining economic prospects of that country you broaden your horizons to what is going on in the country. If you put some money into the stock, you have a vested interest into what is going on in that country. A recommendation is unless you are buying for a very specific reason, ensure you have the ability to occasionally follow what is going on with the stock and the country.

Bridging to income producing stocks, it was an interesting remark about caring for your country if you own shares in the country.My belief is the ownership has to be a more direct link rather than through a device such as your pension plan. If you own shares directly, in your retirement plans or through mutual funds or directly,  there could be a tendency to ensure you care. For a duty of  an investor besides to receive the dividends is to ensure the company maintains the direction you believe it should be going in. Passive investment still entails some level of engagement whether it be awareness of the company’s presence in the marketplace. Besides money why are you interested in the company – does it seem to well managed? is it keeping its market share and ensuring its margins on the items it needs to make a profit on? By asking these questions, you will keep active and invariable care for the country you have invested in.

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

A few weeks ago, the writer was in the maintenance area of a building and saw a person using a steel cutter device to fix the wheels of a cart used for display purposes. On my return it was noticed the gentleman was still working on the wheels. When he stopped to examine his work, I asked why all the work to put on the wheels? It was explained the original came with small wheels that perform one function (and little movement) and larger wheels were needed to make the cart multifunctional. The problem was the design of the bottom of the cart was very poor and additional supports were needed. Later in the week, the writer saw the carts being used and could see the gentleman did a great job.

Linking to dividend producing stocks, often the design of a fund that you may have bought did one thing very well, but then it was asked to do something else which it was not really set up to do. If the entire frame is not fixed, tweaking just does not do the job. Dividend funds or dividend producing stocks need the least fixing because either the investments are paying dividends or they are not. What they were when they were bought should be what they are now.

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

Every corporation that has been profitable for a number of years, although every person is very valuable, none are replaceable. The practice is as people leave, the corporation  will continue, having said that, every once in a while investors attach themselves to the President. This person through time has earned the respect of investors from his/her actions and they will be missed. The example today is not because the writer is a car guy, but some of the products from Ford the writer likes. The President of Ford Allan Mulally is retiring and the succession plan will take 6 months afterwards. From what the writer knows, it sounds Ford has a good plan in place, which Mr. Mulally deserves extra credit for as President. The writer has seen too many people leave with a really poor succession plan as it evolved into stalemates and infighting.

Linking to dividend producing stocks, one of the reasons why you should buy stocks that have a long history of paying dividends is the good companies have managed to figure out succession planning. Poor companies do infighting and losing the edge they have over their competitors. The President of the organization matters when there is more time spent on building the internal profile and living off the corporate perks than serving the people who pay the bills. The business publications often have a story or two about the effects of infighting in the corporate suite, the end result is not good for investors. Being human, the infighting for the spoils of victory are bound to continue and while it makes interesting reading, as an investor you may wish to be on the sidelines till it is sorted out.

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

On any day in the market, there will be rumours of which company will be taken over. Some of the rumours are just that rumours, some of the rumours are based on truth because there is accumulation  of shares for investment purposes. The investors believe for a variety of reasons the company’s share price is low or undervalued by the market. In this area of investing, there are some well known names of hedge funds and names of people who you will consistently see that have varying degrees of success. Some investors will try to work with management, some will want new management, some will want Board seats and almost all just want to be bought out at higher prices than they paid.

Linking to dividend producing stocks, one method to play the game is when you look for takeover stocks add the provision the company pays a dividend first. In every industry grouping, there are undervalued stocks – very often with a good reason. Fortunately some of the undervalued companies pay a dividend. If they are undervalued for a long time, at some point, a larger company will wish to buy them for strategic reasons and the shareholders will receive a premium on what the stock is trading at. If the compay was paying a dividend, the investor has achieved two rewards their dividends and a healthy capital gain.

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

Every year, technology improves which is a good thing and we all can benefit from it. If you consider turning on of your computer, similar to many people, the writer has more than one computer – one is newer than the other, although both work; one boots up or is ready to use in less time than the other. The programs on each computer are similar, however the perception of time is different. Another example is a TV which took time to warm up in order to view it. Instant on was added and we all had it, then electricity bills went higher and we all did not want it, but we still like it. The savings in time was in reality minimal, but it seemed good.

Bridging to dividend paying stocks, the advantage of these stocks is the dividend is paid on a consistent and long term basis. The disadvantage of having most of your money in the dividends is sometimes you will read a great story of a stock which has increased in value and you did not own in because the stock does not pay dividends. One you may not have bought it anyways, but it is important to remember, the stock exchanges have many stocks in their listings. Most stocks on the listings do not pay dividends and most will not make you a wealthier as time goes on. It may seem you are missing the instant on, but over time with dividends and the increasing value of the stock you will be better off and as Martha Stewart says that is a good thing.

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