Dividends and The Hunt for Vulcan

If you ever watched Star Trek or know something about it, you will know the main character was Captain Kirk and the other leading character was Spock. The character played by Leonard Nimoy was the science officer and first officer and came from the planet Vulcan. Did you know for many years there was a planet Vulcan?

There is a book called The Hunt for Vulcan written by Thomas Levenson published by Random House, NY, 2015.

Have you ever looked at the sky and wondered how it worked? Perhaps you just looked at cloud formations to see pictures in the sky and were content with that. There are people who wondered and did the next step to try to figure out how things worked. One of the key people was Aristotle from Greece and because he was the first to teach or write it down, all the planets are related to the Greek Gods. In Aristotle’s day, the explanation for the how and the why of any phenomenon related to the planets which people could see was planetary motion: the planets riding on rotating spheres. If you jump to Sir Issac Newton’s time, he came up with a better explanation – gravity. You may have heard of the story of an Apple falling on Newton’s head and he called in gravity. This law could be applied equally to everything in the universe and math and physics developed an explanation.

In the 1850’s Urban Jean Joseph Le Verrier discovered the planet Neptune. His rational for Neptune was Nepture was God of the sea and Jupiter’s brother. Saturn was both Jupiter and Neptune’s brother and Uranus was Saturn’s father. Le Verrier was promoted to head of the Paris Observatory in 1854. One of his tasks was to figure out why the planet Mercury did not confirm to all the other planets direct path around the sun. Mercury deviated a little bit called the perihelion shift. There must be a logical, sound reason and many including Le Verrier thought it was due to a planet or comets interfering with the gravity forces to push Mercury off.

People examined the night sky, most are passionate amateurs, but the professionals vertify. It was the case that an passionate viewer Dr. Lescarbault’s saw something and passed the information onto Le Verrier who confirmed the findings and a new planet Venus’ husband. the lord of the forge or Vulcan was named.

Dr. Lescarbault saw the planet, others said they did, but many could not. However the sky is big and complex, and the best opportunity to verify was during a solar eclipses. Even Thomas Edison was involved in looking at the Eclipse and hoping the clouds did not block their view. No shows are hardly alien to science. Theories predict. Ever since Newton’s ideas evolved to subjecting nature to mathematics, this has come to mean that particular solutions to systems of equations can be interpreted as physical phenomena. More theories arise and the math tries to evolve and many times it does.

A new visionary arrived in the 1905 when Albert Einstein produced 4 new works on theoretical physics including what we now know as quantum mechanics and the theory of relativity. He showed light was not straight, but it bent, if light bends so does gravity. In addition, gravity bends time.

Einstein worked with various math professors to understand the variation of Mercury’s orbit and the planet Vulcan disappeared from the maps in 1915 only to arise in connection to a fictional character on a TV show.

Linking to dividend paying stocks, in investing there are multiple theories on what is the best strategy and if you make money looking backwards, those ones worked. The magic of Wall Street is the only perfect information is past information or history and does history repeat itself. There are definite cycles in the market, but can you capture the top to sell and the bottom to buy? One strategy is to invest most of your money in profitable companies which pay a dividend and although the stocks will go up and down, the dividends can pay you while you wait for the top. In every cycle, at some point profitable stocks will trade at higher multiples than non-profitable stocks and most of the stocks on the exchange are non-profitable ones. However sometimes the percentage of growth is higher, but often with high flyers, they descend back to where they started. Learning never goes out of fashion.

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

Leave a comment