Did you know? You can go to any day’s “This Day in History” page by simply entering the month and date after www.begintoinvest.com/
For example: www.begintoinvest.com/May-9
Or follow Begin To Invest on Twitter or Facebook for daily posts!
Prefer video? These are posted daily on our YouTube Channel (and embedded below)
Now, ‘This Day in History’ is also available as an Amazon Alexa Flash Briefing!
Quote of the Day
“Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. Active trading, attempts to “time” market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisors, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy. Indeed, borrowed money has no place in the investor’s tool kit: Anything can happen anytime in markets. And no advisor, economist, or TV commentator – and definitely not Charlie nor I – can tell you when chaos will occur. Market forecasters will fill your ear but will never fill your wallet.”
-Warren Buffett in his 2014 letter to shareholders.
August 14th – This Day in Stock Market History
August 14th, 1945 – Japan surrenders unconditionally, ending World War 2
The stock market would close the next day, August 15th 1945 in celebration of the end of the World War.
The next day the markets would be open would be August 17th, where the reaction was muted, with the Dow falling 0.25%, closing at 164.38. This was not surprising as equities had been climbing for much of 1945 in anticipation of victory, and by the time the news was official it had been thoroughly discounted. The market had “bought the rumor” for years, and there was little left to “buy the news.”
August 14th, 2014 – Berkshire Hathaway shares reach $200,000 per share for the first time
It was a long road to $200,000.
Berkshire first closed above $1,000 August 26, 1983, 9 years later the $10,000 milestone was broken on October 16, 1992., and the $100,000 barrier was crossed October 23, 2006.
Of course, Berkshire has had its share of declines as well. In fact, Buffett outlined the worst of Berkshire’s declines in the 2017 letter to shareholders:
August 14, 2002 — The SEC Certification Deadline and a 3.1% Relief Rally
August 14, 2002 was the day Wall Street’s accounting-fraud panic met its first structural remedy. Reacting to the Enron and WorldCom scandals, (WorldCom had filed the largest bankruptcy in U.S. history just weeks earlier, on July 21st, 2002), the SEC had issued Order 4-460 on June 27, requiring the CEOs and CFOs of the 947 largest U.S. companies (those with 2001 revenue over $1.2 billion) to file sworn, notarized statements personally certifying the accuracy of their financial reports.
For 691 of those companies, the deadline was August 14.
The market treated the deadline as a confidence test, and passed it. The Dow Jones Industrial Average surged 260.92 points, or about 3.1%, to close at 8,743.31. The rally reflected relief that the overwhelming majority of blue-chip executives certified cleanly rather than confessing new problems.
The SEC’s follow-up statement on August 20 confirmed that only a handful of the companies due August 14 declined to certify in the specified form. This one-time order was the bridge to the permanent regime: Sarbanes-Oxley had been signed July 30, 2002, and the SEC adopted its permanent Section 302 certification rules on August 27, effective August 29.
August 14th, 1935 – Social Security Act signed
Initially the minimum monthly benefit was $10 and the maximum was $85. The first check was cut January 31st 1940 for $22.54 to Ida May Fuller, who paid $24.75 into the system and received $20,944.42 until her death in 1975 at the age of 100.
Source: Social Security Administration and Wall Street and the Stock Market: A Chronology
Read of the Day
We quoted Warren Buffett’s 2014 letter to shareholders above because of the significance of today in Berkshire Hathaway’s history in 2014. But every single year offers absolute gems. There is a post where I list my favorite quote from each year of Buffett’s letters, you can find it here:
41 Years of Berkshire Hathaway Quotes
For those interested, You can buy a collection of Buffett’s letters, including the early ones not available on Berkshire’s website in a book here: Berkshire Hathaway Letters to Shareholders
And author Lawrence Cunningham has organized the wit and wisdom of Buffett’s letters in his book: The Essays of Warren Buffett
<— Go to Previous Day: August 13th, 1998 – Russia puts capital controls on the Ruble as debt crisis worsens.
Go to Next Day: August 15th, 1971 – President Nixon signs executive order to freeze all wages to fight inflation –>