In your area of the world, do you see more solar panels or wind turbines going up? If you do that is one of the reasons why the International Energy Agency said worldwide growth in renewable power capacity is set to double by 2027.

In an article by Elena Shao of the New York Times News Service, the IEA says renewables are posed to overtake coal as the largest source of energy generation by early 2025.

The growth of renewables is led by the European Union, USA and China. China is expected to install almost half of the new global renewable power capacity over the next 5 years, based on the country’s 5-year plan.

In should be noted all 3 countries are also using coal and during the Russia cutback, coal mines have opened in England, France and Germany.

For low-income countries there are barriers including a weak grid infrastructure, lack of access to affordable financing for renewable projects. At last month’s United Nations climate conference in Egypt, many global leaders asked the World Bank and International Monetary Fund to make financing of renewable projects easier.

Linking to dividend paying stocks, if you own a utility stock, the company used coal till coal prices went up and switched to natural gas and when renewables prices are compatible or thanks to Washington’s grants the prices make renewables good for the utility to make profits, the utility switched. Utility companies need to keep the electricity on and will do whatever makes economic sense for the shareholders as well as the community. It is good that renewables are gaining a greater share, but as a shareholder the return matters more.

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

Every investor has a bias towards where they live – they are familiar with the company names, sometimes investors know or see management of the company and there are multiple other reasons, but most people have bias. At the end of the year, major investment banks look towards the next year to see where there are undervalued companies or opportunities (investment bankers always see opportunities somewhere). Just because there is bias, does not mean you have to diversify or change the bias, just understand likely you have some.

In an article by Harish Sridharan of Reuters, global banks are turning bullish on South Korea and Taiwanese shares, expecting a rally in semi-conductor stocks.

Goldman Sachs says South Korean stocks are the bank’s top rebound candidate and expects a 2023 return of 30%. The premise is Chinese demand is expected to increase.

Morgan Stanley believes Korea and Taiwan have an early-cycle leaders in the demand recovery. The chipmakers such as Samsung Electronics or SK Hynix could rise 50%.

The elephant in the room or geopolitical events is what will China do in regard to Taiwan? One way to limit the risk is buy a country ETF stock.

Linking to dividend paying stocks, in every stock market around the world there are great stocks and very, very hopeful stocks. there are very good reasons to be diversified, in different parts of the country, in other countries but there are good reasons to have bias. The answer is it depends on the individual investor, but the numbers are the same – for you to make money the company needs to be profitable and ideally pay a dividend. If they can do that on a consistent manner, there is limited reason to look outside your bias area. Investing should be reasonably comfortable, and you want to limit the risk and allow the rewards to flow to you. There are always opportunities, but in the long run steady is a very good strategy.

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

In the retail world, the holiday season leading to Christmas is the quarter where profits are to be made. In is expected that in the following quarter people will generally spend less at the retail store as they pay down debts or build up savings and in the northeast the weather changes to colder. People consider going south to warmer areas of the world or there is never a lack of things to spend money, it usually does not go to the retail stores. After January, one expects to see retail stores cutting staff or hours to meet less demand.

In an article by Stine Jacobsen of Reuters, Swedish fashion giant H&M will cut 1,500 jobs primarily in Sweden where it is headquartered. H&M employees 155,000 worldwide. The prime reason for cuts is to safe money due to keeping the lights on and heating the buildings is increasing unaffordable with energy prices so volatile. H&M has many stores in Europe and due to the Ukraine conflict, there is less Russian gas which has pushed up energy prices.

In addition, the prime competition to H&M is Spain’s Zara and British fashion retailer Primark who are trying to woo customers.

H&M had 170 stores in Russia which are now closed as the clothes are sold.

Linking to dividend paying stocks, all companies have quarters which they tend to do better in, if the quarter which is traditionally their best quarter is not going well you should seek alternatives. If the company is doing great in quarters that are traditionally a little slow, then have higher expectations for the good quarters. If expectations meet reality, then you can do nothing and wait for the next quarter. Reality versus expectations helps make decisions to do or not to do.

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

Sometimes people see the world as either my way or the highway, a company or individual is the bad guy and the other side is the good guy, meanwhile the bad guy is just trying to do what is legal and meet a demand. When a person makes a great deal of money, it is reasonable to ask how did he/she do it? what connections do they have? can everyone have the same connections to make money?

In an article by Kruthika Pathi and Sibi Arasu of the Associated Press, they examined the richest person in India. Gautham Adani runs the Adani Group and by any measure is one of the largest companies in India. His success is tied to Prime Minister Narendra Modi and his policies to promote self-reliance and achieving net zero by 2070. Prior to Prime Minister Modi, the Adani Group was much smaller, but since his election, Mr. Adani’s net worth has gone up 2,000% to $125 billion according to Bloomberg’s Billionaire index.

According to Mihir Sharma, an economist at the Observer Research Foundation, it is not that government policies are shaped by the Adani Group so much as the Adani Group is a willing and able partner in what the government decides are its priorities.

Mr. Adani has a base in supplying coal to coal burning electric power stations and has expanded to ports, farming, defense manufacturing and announced plans to invest $70 billion in solar, wind and other green projects over the next decade.

The company has won multibillion dollar contracts to build ports, highways and power plants. If there are large government subsidies involved, the Adani Group expands. One of the key elements to Adani’s success has been his ability to manage relationships. He is close to every politician that is power according to RN Bhaskar who wrote a biography on Mr. Adani.

Linking to dividend paying stocks, in the above case Mr. Adani is flexible enough to agree with India’s policies and benefit from them. Some companies try to stay away from government subsidies, others embrace them, what does your investments do? does it what which party is in power? does the management team have relationships?

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

There are many people who discus the economy and what is going on and some write books. One of the speakers is Ben Stein who wrote the book The Capitalist Code, published by Humanix Books, West Palm Beach, Florida, 2017.

The book is designed for young people and hopefully older people are essentially doing what Mr. Stein recommends.

Someone is sitting in the shade because someone planted a tree a long time ago – Warren Buffett.

That means time is going to be on your side, think about Mr. Buffett’s long time holding in Coca-Cola. The stock pays dividends and over the years has increased in value but does not usually go up or down more than 10% a year. If you own it for years, the value has increased and the dividends you received would have paid for your costs and the money continues to flow to your account.

Do what you love, the money will follow – Marsha Sinetar

There is no one way to make a living, there are multiple methods. It is wonderful if you love your job or love parts of it, but unless you own the company one day you may be asked to leave. The key is live on less than you earn, whatever you feel is comfortable and save first, then spend. The savings as long as the investment vehicle is good will over time use compound interest to become large when you need it at retirement.

One of the best methods is buy an index fund for the S&P 500 which gives diversification, is low cost and because the index is changed at least twice a year (the losers go out, the winners come in) over time the index will be higher than when you buy it. Contribute monthly and in a few years, you will see the difference. If you want diversification, buy a dividend fund (if a company cannot pay a dividend, the fund sells it for one that can). Over the past 10 years, it is easier to buy the funds and contribute to them, most large fund companies have index funds.

Take advantage of all tax subsidies – Frank Knight

Understand relatively wealthy people write the tax code and there are more tax subsidies or breaks the more money you have invested or saved. Whether you call them incentives or deferred taxes or subsidies, the tax breaks are available to all but benefit those with more invested or saved. What you wish to do is convert short term taxable income into long-term very highly tax advantaged capital gains income. Use the system to your advantage.

Liquid assets = Action – Herbert Stein

What this means at some point, you will wish or want to sell your assets. If you own stocks or index fund or other types of funds you can sell them and receive your money within 3 days. You can invest in many other asset classes but understand how long does it take to get your money out if needed?

Linking to dividend paying stocks, if you place an emphasis on dividend paying stocks, you expect to live a number of years and be rewarded for what corporations do – try to make profits and reward their shareholders. The income you receive ensures an income stream and over the long term because profit making companies trade at higher valuations the shares increase which is a lovely benefit. If the dividend decreases, you can find alternatives there are always good alternatives on the stock market, it is just a matter what one you choose.

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

In 10 years or less, the average vehicle sold will be electric, but we are a long way from there, however the present leader in EV market is China. There are a number of reasons but the primary one is Bejing is similar to LA – they are built up in bowl like areas where pollution sits until the wind blows it out. Bejing as capital allows government officials to want to have less pollution EVs are a partial solution. All the major car companies have subsidiaries set up in China to sell into the EV market.

In an article by Nick Carey and Giulio Piovaccari of Reuters, according to LMC data while fully electric cars make up an average of 5% of models for foreign carmakers sell in China, they account for 30% of Chinese carmakers models.

The formula for success in China has changed, consumers want EVs akin to smartphones where the emphasis is on connectivity and apps rather than performance – to the extent the EV makers such as Nio have a built-in selfie camera in some models to appeal to younger buyers.

Within the above market, the bankruptcy of Stellantis’s Jeep joint venture in China could spell trouble for other global automakers whose output has plunged over the past 5 years in the world’s largest car market, as domestic players rapidly takeover. On October 31, the joint venture between Stellantis and Guangzhou Automobile Group (GAC) has ended although earlier this year, Stellantis was discussing increasing its stake from 50% to 75%. A spokesperson for Stellantis noted the Jeep dealership in China is still operational and Jeep is committed to it.

According to LMC Automotive, capacity utilization at its plants has fallen from 43% to 13%. At those numbers profitability is not going to be reached.

Part of the reason is the markets have changed from the foreign carmakers right to win to where there is far more level playing field according to Bill Russo, head of consultancy Automobility Ltd in Shanghai and a former Chrysler executive.

Part of the problem with capacity has been the Chinese government’s response to COVID 19 by locking down parts of the country which has also caused a semi-conductor shortage to build the vehicles.

Linking to dividend paying stocks, companies are brand loyal, but customers are not always brand loyal. The brand gives an edge to begin with. but if the consumer is more features driven, they will switch to other brands. If consumers are seeing their vehicle as an extension of their smartphones, then you have to notice the different brands of smartphones and see how consumers switch between the brands. A car used to be a status symbol does that change. We all look to the big companies to see even if consumers change their habits, somehow money flows into the big company, if it does at healthy margins allowing for profits and dividends, as shareholders we do not have to do anything but enjoy the ride.

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

The lifeblood of every economy around the world is credit. Who has access to it and who does not. The government needs banks and one of the most important banking regulations is the reserve requirements. The banks of every country need to maintain a level of liquidity versus the number of loans they have outstanding and can lend. In times of recession, the reserve tends to be higher, in times of booming economy the reserve tends to be less, the rest of the time the government departments are trying to do a balancing act.

In an article by Ellen Zhang and Kevin Yao of Reuters, the Central Bank of China is cutting the amount of cash that banks must hold as reserves for the second time this year which has the effect of releasing $93.3 billion in long term liquidity.

The idea is banks would lend more money or offer more options to businesses which are struggling because of lock downs imposed by the government. The issue is having more money to lend does not necessarily mean more money is lent.

The cut by the Central Bank will lower the weighted average ratio for financial institutions to 7.8% and will affect all banks except those implementing a 5% reserve ratio, while lowering banks’ annual funding costs by $1.1 billion.

Linking to dividend paying stocks, all economies that are market driven are similar in terms of loans are given out, loans are repaid, and the leverage means the economy functions. In order to see how the economy is doing, seeing what the reserve requirements from the Central Bank to the banks is a good indication of how things are really going. For your investments, you need to know what government regulations help and hurt your investments, which is why every week the government issue reports which tells you the big picture and you can distill it to your investments.

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

When you own shares in a company, at every annual meeting you vote on executive compensation, the auditors and approving the financial statements. When you vote for executive compensation, who they are and what you pay them are public knowledge and worthy of discussion on how they are doing.

In large corporations with many shareholders, the Board chooses the new President and if the leaving President is leaving on a good note, they often have a say in their replacement. In the case of Disney, Bob Iger was the President and by all accounts he did a good job which meant he moved to the Chairman of the Board and had a say in his replacement.

Recently the replacement Bob Chapek was let go, although he was likely handsomely compensated. Then the columnists offered their views. One opinion is from Gus Carlson and he offers the comment:

There is a basic guiding principle that every company leader must understand. Know your core business.

Mr. Carlson believes Mr. Capek did not get it and moved Disney away from its core business of creative storytelling. Mr. Capek took budget and power out of creatives’ hands, treated talent poorly, insulted loyal customers, embroiled in fights that he did not need to and promoted people who were loyal to him but not on creative storytelling business.

After Mr. Iger resumed the role of being President, he sent a memo to all employees, saying I fundamentally believe storytelling is what fuels this company and it belongs at the center of how we organize our businesses. In the meantime, Mr/ Iger is looking for a new President in 2023.

Linking to dividend paying stocks, when you own the company, you follow the company, but you are not a manager. In order to keep your shares, you need to see the company is fulfilling its business strategies around its core business. As a shareholder when the company does something and you see the announcement, you can ask yourself how does it fit their core business? perfectly aligned? somewhat or padding someone’s pockets? How you answer the question means you do something or look for alternatives.

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

Everyone who invests is interested in alternatives to the stock market, whether it be real estate, art or collectibles or even crypto currency. Just because you are interested does not necessary mean you ,do because while there are similarities there are also differences. In the world of crypto, some have embraced it, some major banks help move money around and people similar to Warren Buffett says stay away. This means similar to all investments doing your homework is important. When the market or potential market was relatively small you may have heard the names of bitcoin and others. One exchange which rose to prominence was FTX.

In an article by David Yaffe-Bellany of the New York Times News Service, James Bromley, a lawyer at Sullivan & Cromwell in New York said a substantial amount of assets have either been stolen or are missing.

FTX is based in the Bahamas and was owned or controlled by Sam Bankman-Fried who also owned Alameda Research a crypto based hedged fund. Billions of crypto went to the hedge fund which invested in other exchanges.

The reason why FTX is in the news is Mr. Bankman-Fried was worth over $26 billion dollars and now he is in millionaire status. Although it seems FTX or Alameda Research bought real estate in the Bahamas for executives to live. If you follow the NBA Basketball, the Maimi Heat played in the FTX Arena, it will be renamed.

The trustee in bankruptcy is John Jay Ray III, who having oversaw the biggest bankruptcy in the US or Enron, said the FTX was the worst he had seen in his career. The top 50 creditors are owed $3.1 billion.

Linking to dividend paying stocks, when you invest you believe you will be repaid or be able to sell if and when you wish to. FTX went bankrupt but the stock markets continued to have good days because they are large and more interested in the future of the economy, this is good for investors. With all investments, the first rule is try not to lose money, then it is the risk reward calculation. For those with a low-risk reward calculation, receiving dividends from your investments is a good thing. When you receive money, you have alternatives what to do with it, but you should not have to worry about not being able to sell or finding new alternatives.

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