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Quote of the Day

 

“I bought it too early, and I sold it too early. Other than that, it was a perfect trade! It shows how much we know about silver. Nobody asks us about silver for a good reason!”

 

-Warren Buffett, during the 2007 shareholder meeting regarding his silver investment. At one point, Berkshire Hathaway owned or had rights to over 129 million ounces of silver (Here is a press release that Berkshire made in 1998), over 30% of the world’s trade-able supply of silver!

 

January 21st – This Day in Stock Market History

 

 

January 21st, 1720 – Shares in the South Sea Company begin their rise. Within the next few weeks, the price per share for South Sea Company will rise from 128 to 187. By March they will be over 300.

The South Sea bubble would become one of history’s most famous stock market bubbles. By the end of 1720, the price per share of the South Sea Company would be over 1,000 pounds, (Reaching their peak of 1,050 on June 21st 1720).

 

South-sea-bubble-chartBy September 1720, shares in the South Sea Company would be down 90%.

 

Source: Devil Take the Hindmost: A History of Financial Speculation

 

January 21st, 1980 – Silver prices reach their all time high (on an American exchange) of $52.50 per ounce. Adjusted for inflation, that would be equivalent to about $166 per ounce today. In an attempt to slow the rise in silver prices the COMEX (The commodity exchange market) does something extraordinary; it would ban all silver orders except liquidation orders.

COMEX_silver_trading
New York Times coverage of curb in silver trading January 21st, 1980

 

The price of silver plummeted to as low as $34 on the news, and would continue its fall through March. However, the most notable price action took place on “Silver Thursday”, March 27th 1980 when silver prices fell to $10.

Note: You may also see $49.45 per ounce quotes as the peak silver price. This is because the London gold markets reached their peak of $49.45 per ounce on January 18th, 1980.

 

Source: Panic, Prosperity, and Progress: Five Centuries of History and the Markets



Best January 21st in Dow Jones Industrial Average History

2009 – Up 3.51%, 279.01 points.

 

Worst January 21st in Dow Jones Industrial Average History

2010 – Down 2.01%, 213.27 points.

 

 

Read of the Day

Warren Buffett’s investment in silver represents one of the few times the company has made an investment in a precious metal. Buffett’s business partner, Charlie Munger, has since made many “anti” metal comments.

in 2012:

“I think civilized people don’t buy gold, they invest in productive businesses.”

In 2010:

“I don’t have the slightest interest in gold. I like working on understanding what works and what doesn’t in human systems. To me that is my…that’s not optional…that’s a moral obligation. If you’re capable of understanding the world, you have a moral obligation to become rational. I don’t see how you become rational hoarding gold. Even if it works you’re a jerk.”

A huge collection of Munger quotes is available in the great book, Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger, Expanded Third Edition

Note, sometimes the book sells for a premium on Amazon, sometimes it is cheaper to buy the book directly from the publisher, here.

 

 

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