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Quote of the Day

“Considerations are identical when you buy Amazon versus some, say, bank stock that looks cheap statistically against book value or earnings or something of the sort.

In end, it all goes back to Aesop, who in 600 BC said that a bird in hand worth two in the bush. And when the fellow who bought it tries to figure out if there are three or four or five in the bush, and how long it will take to get to the bush, how certain he is that he’s going to get to the bush, and who else is going to come and try and take the bush away, and all of that sort of thing.

And we do the same thing. And despite a lot of equations you’ll learn in business school, the basic equation is that of Aesop.

Warren Buffett – At the May 2019 Berkshire Hathaway shareholder meeting

August 7th – This Day in Stock Market History

August 7th, 1974 – U.S. stocks jump more than 3% as rumors that President Nixon will resign intensify.


The rumors intensified 2 days after Nixon admitted to withholding evidence in the Watergate scandal.

Watergate had taken its toll on the markets – On this day the market is down 40 percent from its highs 2 years ago.


In this case, the rumors were right – President Nixon will resign 2 days later. The stock market was happy to put the uncertainty behind it. The market would rise nearly 70% over the next year and a half after his resignation:

Chart from Macrotrends

For more, see our post: How Did Stocks Perform During Watergate?

August 7th, 2018 – Tesla CEO Elon Musk tweets out that he is taking Tesla Private at $420 per share.


His tweet ends with the now infamous phrase: “Funding secured.”


Tesla shares would rocket higher from their opening price of $343 to a intra-day high of nearly $390 per share.

Source: Wall Street Journal


There was one problem. The tweet was a lie. There was no take private offer, or funding lined up.

Musk would try and justify his actions in a blog post a week later:


However, regulators did not agree with Musk, who would be sued by the SEC, and settle for a $40 million fine.

Best August 7th in Dow Jones Industrial Average History

1974 – Up 3.07%, 23.78 points.

Worst August 7th in Dow Jones Industrial Average History

1919 – Down 4.71%, 4.98 points.

Read of the Day

Musk’s company is named after the scientist Nikola Tesla, regarded as having one of the brightest minds of the early 1900s.

The Smithsonian has a great article about his “rags-to-riches-to-rags” life here: The Extraordinary Life of Nikola Tesla, and The Rise and Fall of Nikola Tesla

“Of all things, I liked books best.”

Nikola Tesla

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