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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, 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

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.

Front page of the Chicago tribune on August 15, 1945
Front page of the Chicago tribune on August 15, 1945

August 14th, 2014 – Berkshire Hathaway shares reach $200,000 per share for the first time.

brk

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:

brk2017_letter

 

Best August 14th in Dow Jones Industrial Average History

2002 – Up 3.08%, 260.92 points.

Worst August 14th in Dow Jones Industrial Average History

1907 – Down 3.79%, 2.00 points.

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

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