Dividends and Ocean Titans

In the area where the writer resides, while it is not far from the lake and a river, it is a day’s journey to the oceans. On the oceans, ships and tankers dominant the movement of goods and services. Have you ever watched the ships and wonder, when and why did they change to what exists today? On such person how did was Daniel Sekulich who wrote the book Ocean Titans published by Penguin Canada, Toronto, 2006.

In today’s world we think of changes in software or technology which can change the way we do things. In the 1859, the number on change on the oceans was the start of the Suez Canal. For generations people had thought about having ships go through the Suez Canal to bring goods from Asia to Europe at a relatively inexpensive matter. Originally the goods moved by camels and when they reached Egypt, they could be transported by sea. This meant only a few items and many would be considered luxury items. If the goods did not go through the Suez, they had to go around Africa on clipper ships – the ones that had the 3 masts and used the wind to move the boats. The trip around Africa adds 4,000 miles of travel and on the sea, not every trip is going to be safe and secure – there are many storms on the seas. In 1859, the French lead by Ferdinand de Lesseps lead a consortium to be a 121 mile long waterway through the Isthmus of Suez.

Besides a shorter route, the Canal did not lend itself to clipper ships, the wind did not blow consistently; the Canal was shallow; it was hard to navigate. The solution was steam built steel ships or steam tugs to tow the ships. With steel ships, ship building changes. Rather than needing supplies of wood, steel is needed, Where were the steel mills, ship building changed locations from southern England to northern England and Germany. Now days the shipbuilding is done in South Korea by Hyundai Heavy Industries in the area of Ulsan. The owners of the ships are registered in many tax haven countries with a postal box because of tax regulations.

Linking to dividend paying stocks, in the world of ship building the world changed because of the Suez and Panama Canals. For consumers around the world, that was a good thing. For older shipbuilders their era was coming to a close. When you invest, that is what you worry about what would change the industry to something brand new or the old ways no longer work?

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

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