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Quote of the Day
“Men, it has been said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one”
– Charles Mackay author of “Extraordinary Popular Delusions and the Madness of Crowds“. Today represents the peak of “tulipmania”, one of history’s most famous asset bubbles.
February 3rd – This Day in Stock Market History
February 3rd, 1637 – In Holland, The tulip market suddenly crashes. Within a day there are no buyers for tulips at any price, after just reaching prices as high as 6,000 Guilders for a single bulb. This day represents the peak of the tulip bubble:

Chart created by Earl Thompson. Source: Wikimedia Commons
At the time, the average annual wage is between 200-400 Guilders and a typical small town house sold for about 300 Guilders. By May of 1638 contracts were annulled for 3.5 cents on the dollar, a drop of 96.5%.
Source: Devil Take the Hindmost: A History of Financial Speculation
February 3rd, 1929 – After a day volatile day on Wall Street, the National City Bank of New York (What is now Citibank) defies the Federal Reserve board’s orders from the day before and announces $25 million in lending for stock market speculators. The 1929 bull market would be extended another 6 months, until it’s ultimate reckoning in September.
Source: Eyewitness to Wall Street: 400 Years of Dreamers, Schemers, Busts and Booms
Best February 3rd in Dow Jones Industrial Average History
1917 – Up 3.40%, 2.96 points.
Worst February 3rd in Dow Jones Industrial Average History
1938 – Down 3.71%, 4.57 points.
Read of the Day
An “Oldie but Goodie” – Berkshire’s 1978 Chairman’s Letter:
“We are not concerned with whether the market quickly revalues upward securities that we believe are selling at bargain prices. In fact, we prefer just the opposite since, in most years, we expect to have funds available to be a net buyer of securities. And consistent attractive purchasing is likely to prove to be of more eventual benefit to us than any selling opportunities provided by a short-term run up in stock prices to levels at which we are unwilling to continue buying.”
<– Go To Previous Day: February 2nd: 1996 – First search engine company has its IPO, leading to fascination with internet search companies.
Go To Next Day: February 4th: 2004 – Facebook website is launched —–>