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Quote of the Day

“As time goes on, I get more and more convinced that the right method in investment is to put large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little has has no reason for special confidence.”

-John Maynard Keynes

July 18th – This Day in Stock Market History

July 18th, 1933 – The Dow Jones Industrial Average reaches a 1933 peak of 108.67, a 100% gain within the year, the only time in history the markets have doubled within 1 year.

Chart from Macrotrends
Chart from Macrotrends

However the bull market would not last, the Dow would close at 88.42 by the end of the year.

Despite the best year in the index’s history, the U.S. had a long way to go to recover from the market decline from 1929 – 1932. Even at the Dow’s 1933 peak, after doubling during the year, the index was still down more than 70% from its 1929 high.

Source: It Was A Very Good Year: Extraordinary Moments in Stock Market History

July 18th, 1968 – Intel founded by Robert Noyce and Gordon Moore with $2.5 million in capital.

Grove, Noyce, Moore. By Intel Free Press - https://www.flickr.com/photos/intelfreepress/8267616249/in/photostream/lightbox/, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=38385134
1978 Picture of Andy Grove (Intel’s first employee), Robert Noyce, and Gordon Moore. By Intel Free Press

Today, that $2.5 million in capital has grown a company that is worth $224 billion today.

Intel would not spend much time as a private company, completing their IPO on October 13th, 1971. Since then, shares of the company are up about 413,000%, and over the last 47 years have had a compounded annual growth rate of 19.3%:

Intel_stock_chart_since_IPO

Best July 18th in Dow Jones Industrial Average History

1950 – Up 2.15%, 4.25 points

Worst July 18th in Dow Jones Industrial Average History

1932 – Down 2.69%, 1.22 points

Read of the Day

  • The Quote of the Day is something you may have thought came from Buffett. But several decades before Buffett, John Maynard Keynes was an investing superstar. The evolution of his investment style changed from a heavily leveraged option and commodity trader into one which sounds very much like Buffett’s himself (In fact he may have influenced Buffett). I was very surprised by the book Keynes’s Way to Wealth

The book goes into detail from Keynes’s early days as a stock speculator, to his late days as a value investor (before “value investing” as we know it even existed!). It is a quick read, but very enjoyable and incredibly enlightening .

We also have a review of the book, highlighting a few of the book’s key lessons in a post here: The Evolution of a Super-Investor: John Maynard Keynes

<– Go To Previous Day: July 17th, 1998: Mark Cuban’s Broadcast.com IPOs at $18 per share, rises 250% on first day of trading.