Hopefully this summer, you were able to see and possibly go boating on a lake or ocean. If you live near the ocean, there is fish in the sea. People from time started have gone to the lake or the sea to catch fish and sell it. Fish are generally good for you and many years ago, one of the Popes said to Catholics (at the time Catholic meant any person who believed in Christianity) to eat fish on Friday. This created demand for fish all over Europe.

If you watch movies. George Clooney, Mark Wahlberg made a movie called The Perfect Storm based on a novel by Sebastian Junger published by HarperTorch, NY, 1997. The movie and paperback novel came out in 2000. It is a good movie. In the novel, the descriptions of the way of life of fishing are equally as compelling as the feel of the boat and waves in the movie.

In the novel, 12 years after Columbus discovered North and South America for the Europeans, the area of the Grand Banks were discovered full of cod. The Grand Banks are at a point where warm water from the south and cold water from the north meet and the plankton grows. The food small fish eat is plentiful which attracts bigger fish which attracts even bigger fish. A few years after being discovered, there were so many Portuguese ships on the Grand Banks, the King of Portugal imposed an import tax in order to protect the fisherman at home.

For a long time, it was easier to catch the fish, salt them on the boat and return back to Europe, no need to land on the rocky shores of North America. In 1523 a ship was financed by the Dorchester Company, a group of British investors from London who wanted to tap the riches of the New World. Some ventures are successful, some are not as commodity prices or fish prices declined. Eventually people did land on the new world and fish communities grew up including in Gloucester, Massachusetts.

For a long time, fisherman used to go the the Grand Banks and find plenty of fish and it was entirely possible to make a reasonable living fishing. If you owned the boats, fishing was a good industry to be it. Then something changed, there was fewer fish or the fish being caught were smaller or less profitable. What had changed? Technology had changed. The quick freeze technology was applied to fishing and boats became larger and were essentially factories at sea. The bigger boats had bigger nets to catch more fish and depleted the stock faster.

For fishermen, they had to change the way they fished and go further out to sea and be more vulnerable to the the weather changes including storms.

Linking to dividend paying stocks, in some industries it is easier to see technology change the business. In fishing, first it was easier to go be to Europe, then it was easier to open up plants to sell the packaged fish to Europe and as the market became larger to the US. Technology of quick freezing took more fish out, without worry about the number of fish in the sea (it is a big sea, but fish do not go everywhere). When the commodity is harder to find, the risks to find the commodity are greater, which is the reason why we have fish farms. The risk reward system has been part of the season for generations and will continue to be.

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