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Quote of the Day
“Investors, as opposed to traders and speculators, have to make long-term, slowly evolving judgements about the course of events in economies and the world. The more history they know and understand, the better these perspective decisions will be.
An investor simply must know some history as well as a statistician, psychologist, and a gifted institutionalist.”Barton Biggs, from his book: Wealth, War and Wisdom
July 23rd – This Day in Stock Market History
July 23rd, 1903 – Ford Motor Company sells its first car, an $850 version of the Ford Model A.
The first Model A was sold to a dentist in Chicago for $850 dollars, or about $23,000 today adjusted for inflation.
The sale came at a time when Ford was reportedly down to its last $200 in its bank account, after starting with $28,000 when the company was incorporated a month before.
However, the lean times would not last. The car was a hit and by the end of the year, Ford will have 37 thousand dollars in profits.
Source: Ford Motor Company History
July 23rd, 1914 – Austria sends an ultimatum to Serbia – Punish and suppress those responsible for Archduke Franz Ferdinand’s murder, or be invaded.
The ultimatum was immediately matched by pledges from Germany and Italy to come to Serbia’s aid.
At the time, the stock market had very little reaction to the assassination of Franz Ferdinand on June 28th, 1914.
The worst day on the U.S stock market after the assassination of Franz Ferdinand was July 15th, when markets fell about 1%.
However, things would rapidly unravel:
- On July 27th, Austria would invade Serbia, sending U.S. stock markets down 3.5%.
- Then, stocks would fall nearly 7% on July 30th, leading to the closing of the New York Stock Exchange July 31st, 1914.
Best July 23rd in Dow Jones Industrial Average History
1930 – Up 2.15%, 5.03 points.
Worst July 23rd in Dow Jones Industrial Average History
1934 – Down 2.79%, 2.64 points.
Read of the Day – Investing in War Time
I recently read the book Wealth, Warm and Wisdom by Barton Biggs.
The book is a great source of information for how world wide stock markets reacted during the events of World War 2 and the Korean War.
What I found most interesting was that he covers how investments performed from opposing countries during the war. Not only does it cover U.S. and U.K markets, but also German and Italian stock markets.
Biggs covers all sorts of interesting turning points to the war, and shows just how efficient the stock market is. For example, the battle of Coral Sea was a huge turning point for the U.S. stock market (in fact, it comes within days of the ultimate 1942 market bottom), even though the battle was hardly publicized or realized to be as big of a success as it turned out to be.
The book is a good review of World War 2 and Korean War history, however where I think it becomes great is how Biggs ties in so many events to the stock market at the time.
The book was also a source for a recent small thread I posted on Twitter:
Which country had the highest annualized real (after-inflation) equity returns in the 20th century?— Hylland Capital (@HyllandCapital) July 5, 2019
🇸🇪 Sweden 🇸🇪
Would not have been my guess! pic.twitter.com/DmPZ5rhwuR
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