Most of us have heard about the California gold rush or perhaps the San Francisco 49ers football team named after the gold rush era. Have you really thought about what that meant? There is an interesting book called The Age of Gold by H.W. Brands published by Doubleday, NY, 2002 that does. The gold find at Sutter’s Mills (not far from Sacramento – the state capital) brought California into the United States as well as made the US a wealthy country. The world at that time was in a recession which meant when gold was discovered, it set off many middle income people to look for new opportunity by going west. In the US, the journey to California from NY area to San Francisco took about 6 months to close to a year whether by land or sea. People from all over the world came to the city by the bay and most stayed. The book has chapters of people leaving Europe, Australia, China, and of course the US to arrive in the golden state. There are many places in the world to find gold – you can google the big gold miners and see they are mining in many countries however most of the mines are digging in the earth or going down to follow the streams of gold. In California the gold was near the surface and was easily gathered by using water or panning the gold (which everyone can do). As time, went on people learned where to look for the gold and what needed to be removed, but for the first couple of years – the gold was easily found and many found something which lead to more people coming to California.

In the 1840 and 50’s the way across the oceans was by ship. The ship trade was fiercely competitive and often the first ship back to New York with tea could charge premium profits which meant profits on its cargo and sometimes paid for the entire cost of the ship. With premium profits to be made, shipbuilders experimented with new designs – they grew taller, leaner and longer. The era of the clipper ship was upon the seas.

The 1840’s the US Navy had begun sponsoring research into exacting how did the winds blow and what were the current patterns. Up to this time, sailing was more art than science; for although sailors knew about the general features of the trade winds and doldrums the more detailed knowledge was either undiscovered or jealously held by the discoverer for it gave the ship a competitive advantage. The US Navy was bringing the information to the public realm or for everyone.

Linking to dividend paying stocks, in the above case information was guarded because large profits were made; as more information is seemingly made public other factors will be available to determine profit. With all goods and services, when large profits are made more will try to enter into the marketplace. With dividend paying stocks that are profitable being consistent is more important than making great sums of money at one time or lower risk, higher long term values.

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