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Quote of the Day

“I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, “My God, they’re purple and green. Do fish really take these lures?” And he said, “Mister, I don’t sell to fish.””

-Charlie Munger

February 1st – This Day in Stock Market History


February 1st, 1917 – U.S. stocks fall more than 7% on fears that the U.S. will be forced to enter World War 1.

us_close_to_entering_ww1
New York Times coverage of stock selloff as traders fear U.S. will be dragged into war

The U.S. would formally enter the war on April 2nd, 1917.

World War 1 was be responsible for the longest closure of the New York Stock Exchange in history. However that closure actually came before the U.S. became involved in the war. The New York Stock Exchange closed for World War 1 on July 30th, 1914, and remain closed until December 12th, 1914.

The stock market would decline from 1916 through 1917 as investors feared U.S. involvement. Markets would be volatile through 1921, when the roaring 20s would begin, sending the stock market on one of its most dramatic rises in history:

djia_during_ww1

February 1st, 1958 – The United States has its first successful satellite launch with the satellite Explorer 1, finally answering the Soviets in the space race.

New York Times coverage of U.S. Explorer 1 launch
New York Times coverage of U.S. Explorer 1 launch

Investors had become anxious that the United States had been unable to compete with the Soviets in the space race. After the Soviets launched Sputnik on October 4th, 1957 U.S. stock markets fell more than 10% over the next few weeks.

A couple months later, on December 6th 1957, America’s failed launch of the Vanguard rocket sent stocks about 6% lower again.

It is likely no coincidence that after this event, the U.S. stock market rapidly climbed higher after it had been only going sideways for several years:

SandP500_chart_space_race

February 1st, 2016 – Alphabet (Google’s parent company) briefly passes Apple as the world’s most valuable public company. Google and Apple would trade the honor of the most valuable public company a couple times throughout 2016 before Apple’s stock would take off in early 2017.

AAPL_vs_GOOG_market_cap





Best February 1st in Dow Jones Industrial Average History

1932 – Up 4.52%, 3.44 points.

Worst February 1st in Dow Jones Industrial Average History

1917 – Down 7.24%, 6.91 points.

Read of the Day

The Best of Charlie Munger: 1994 – 2001. 350 pages of quotes, notes and transcripts of Charlie Munger speeches!

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