Read Part 1..
Where there is demand, there is money.
And where there is money, there are people trying to get rich.
Whale hunting expeditions in the 1800s were a result of these factors.
A hunting ship would go on missions that lasted years.
They would carry boats.
When a whale was spotted, the boats would be lowered into the water.
The boats would go near the whale to try to harpoon it.
Once harpooned, the whale would try to go underwater. But the rope prevented that.
The whale would eventually get tired. It would die from bleeding and exhaustion.
Then, the boats would tow the whale to the ship to be cut and processed.
Once a ship had caught a few whales, it was enough. No more hunting on that trip.
The captain and crew would all be rich.
This is exactly why whale hunting was big; why Captain George was ready to go back to sea – even after almost dying.
Towards the mid-1800s, whale hunting was the 5th biggest sector of the USA’s economy.
The USA had more whale-hunting ships than the rest of the world combined.
Captain George’s experience was the main inspiration for the famous novel, Moby Dick.
Essex was not the only accident in whale hunting history.
Accidents were terribly common.
Believe it or not, Captain George, who returned to the sea in a new ship in 1923, met with another accident.
After that, he was deemed unlucky. No ship owner would give him a ship.
Yes – he still wanted to go out to the sea.
Decline of Industries
Around the start of the 1900s, the whale hunting industry in the USA didn’t exist.
The entire sector was finished – barely lasted 100 years.
Why?
A few things developed. That changed everything.
Crude oil was discovered.
Kerosene, petrol, diesel, grease – all kinds of petroleum products were made. Cheaper and better.
Whale oil was not needed anymore.
The discovery of crude oil gave birth to many industries – a lot of which were in manufacturing.
New opportunities were born.
New opportunities – on land, not in the sea.
The whale hunting industry in the USA died.
Whale hunting continued in some other countries – but for the meat, not oil. That was a different industry altogether.
Even that industry is almost dead today.
Lessons
Industries are born. Industries die.
Industries change – and those that do not change, die.
It’s all a part of the natural way the economic engine of the world runs.
Nothing is permanent.
Understanding which industries will survive, which will vanish, and which need to evolve is of extreme importance to an investor.
This is also why long-term investors need to keep their eys and ears open.
Even the best companies operating in a dying industry may not survive.
Some pretty rubbish companies can survive in industries that are growing.
Companies that are able to evolve survive – but only in industries that are undergoing a change.
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