A Tweet from Alice Lloyd George [H/T @PlanMaestro] about the shipping container moved me to add it to a section (below) of my investment reminder file, and reminded me that I need to finish the book The Box (There are also a couple of Malcom McLean tidbits in the book Pay Attention to the Thin Cow):
Are you using the current business model and not anchoring on how the business used to be (i.e. remember that businesses are always changing)?
- Has there been a significant change in the structure of this market/industry, no matter how stable it seems to have been in the past? For example:
- Steel prices declined 80% after Carnegie developed and built a new kind of plant that massively increased output.
- After the Spindletop discovery in Texas by the Hamil brothers in 1901, a barrel of oil dropped from about $2.00 down to $0.03. Oil at that time was cheaper than water.
- The price of a car went from 2 years wages to 3 months wages due to the assembly line, although this was over a ten year period.
- Malcolm McLean’s 1956 innovation of the shipping container slashed shipping prices from $6 to $0.16 cents per ton.