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Quote of the Day

“If you gave me $100 billion and said take away the soft drink leadership of Coca-Cola in the world, I’d give it back to you and say it can’t be done.”

-Warren Buffett. On this day 1892, Coca-Cola was incorporated.

January 29th – This Day in Stock Market History

January 29th, 1892 – The Coca-Cola Company is incorporated in Atlanta, Georgia.

The first Coca Cola drink was sold years prior in 1886, and the creator of Coca-Cola, John Pemberton incorporated the first Company to sell his signature drink in 1888.

However the corporation that we know today as Coca-Cola was incorporated on this day in 1892 by Asa Chandler, who purchased rights to sell Pemberton’s signature drink starting in 1888.

Chandler would hold onto the company until selling to a group of businessmen for $25 million on September 5th, 1919. The company would offer shares to the public for $40 a share.

Over the years as Coca-Cola grew, it would undergo numerous stock splits. 1 share of Coca-Cola purchased in 1919 would have resulted in holding 9,216 shares today, for a value around $525,000 today!

That represents a compounded annual growth rate of 9.87%.

KO_stock_chart

But the further growth of Coca-Cola’s value for investors has come from its dividend. Coca-Cola has paid a dividend since 1920!

Just since 1970 (the furthest back I can find dividend history) that 1 share purchased in 1919 would have paid $258,000 in dividends in total today, and pays $3,409 per quarter at today’s dividend rate.

January 29th, 2001 – All NYSE stocks are quoted in decimals, ending the practice of trading in fractions which was used for more than two centuries.

Besides being a more modern way to quote stock prices, it is frequently unrealized how much money investors have saved due to this change.

Prior to stocks being quoted in decimals, shares were quote in fractions as low as 1/8th. This meant the minimum spread on a stock’s bid/ask was 12.5 cents. Today most stocks have a spread of only a few cents! So for many investors, this changed resulted in a savings of up to 11.5 cents per share!

Best January 29th in Dow Jones Industrial Average History

2016 – Up 2.47%, 396.66 points.

Worst January 29th in Dow Jones Industrial Average History

2009 – Down 2.70%, 226.44 points.

Read of the Day

Here is an article on Begin To Invest looking at the condition of Coca-Cola when Warren Buffett made is famous Coca-Cola share purchase:

Throwback Thursday: A look at Buffett’s 1988 investment in Coca-Cola

<– Go To Previous Day: January 28th, 1986 – Challenger explodes on takeoff.

Go To Next Day: January 30th, 2003 – AOL announces a $98.7 billion loss, the largest in history. –>