Dividends and How We Got to Now, part 6

Part of investing is looking forward, we want to ensure our investments will continue to be profitable and pay dividends, we also want the company to stay in business and grow. If the company has a natural monopoly, it makes it easier, if not then we occasionally we need to look at how things fit in and if we believe the company is doing the correct thing. There is a book called How We Got to Now – 6 Innovations that made the Modern World by Steven Johnson, published by Penguin, NY, 2014. Mr. Johnson has written other books which you may want to check out.

If you look at our society and there are many wonders, how did or what needed to happen to arrive at where we are? In Mr. Johnson’s book the 6 important ingredients are glass, cold, sound, clean, time and light. You might add a category, but it is differently an interesting way to see how the world we know evolved to where it is. If you can see what Mr. Johnson sees, that will help you invest and notice if the companies you invest in do not seem to be getting in, how to connect the dots for the future.

Time

Time is an interesting subject because we never gain it once it has gone. For generations, people got up when the sun came up and went to sleep when the sun went down and it was good. For many people that was good, however if you traveled then it was not good, for time was not constant. At present we live in time zones which means everyone living in the time zone sets their clocks to the same number. How the time zones evolved is an interesting story.

Legend has it in 1583 a 19 year old student at the University of Pisa attend prayers at the Cathedral beside the Leaning Tower of Pisa and noticed one of the lamps swaying back and forth. It seemed no matter how large the arc, the lamp appeared to take the same amount of time to swing back and forth. Years later Galileo Galilei, increasingly obsessed with the science of dynamics, the study of how objects move through space, decided to build a pendulum.

It was an idea that needed time to ripen for most people were not worried about what time it was. However if you were on a ship, latitude was relatively easy to figure out, the longitude was a problem. The famous Longitude Prize in England offered $1 million for the winner. (there is an interesting movie about it called Longitude to see how people tried to solve the problem). As society changed to an industrial one, time became more important. Thing about hourly wages, gaining efficiencies with time motion.

Time was a luxury item, until Aaron Dennison mass produced them and over a 160,000 were sold. President Lincoln owed a watch and so did many soldiers in the civil war. Sears was started when Sears and Roebuck launched a mail-order catalog showcasing watch designs.

As pocket watches were being used by more and more people, it came time to standardize time which happened in 1883 when time zones were introduced.

On your smartphone you have a quartz crystal because they are very accurate. To be more accurate atomic clocks were built in the mid 1950’s and this is how we have the most accurate time.

Linking to dividend paying stocks, most of us take time for granted although it does regulate us. If you buy stocks you wait until 9:30 with the New York Stock Exchange opens and trading begins. High frequency trading is based on time and speed; a number of years only a few people could have imagine the trading patterns. Something will evolve in the future, will you see it?

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

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