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Quote of the Day


“I can live with doubt and uncertainty, I think its much more interesting to live not knowing than to have answers which might be wrong.”


-Richard Feynman, in Perfectly Reasonable Deviations from the Beaten Track


June 2nd – This Day in Stock Market History


June 2nd, 1964 – Initial Public Offering (IPO) of Comsat, a company created with help of the U.S. Government and the Communications Satellite Act of 1962 to launch satellites into orbit. President John F. Kennedy appointed the first board members of the company in 1962, by 1965 the company had launched the first communications satellite into orbit and by 1969 had given the entire globe access to satellite coverage.


The company’s stock was popular with the public from its initial public offering and on. It was the largest IPO since Ford went public in 1956.

It was a “glamour” stock of the decade, regarded by some as the “stock of the century”. Trading on its IPO saw frenzied demand from the public and brokers instituted strict limits on the number of shares each investor could purchase. Comsat’s initial $20 per share offering price (about a $200 million market cap) quickly rose to $27. In 2 months the shares would be worth over $40.


The company was purchased by Lockhead Martin Corp on September 20th 1998 for $2.7 Billion. Comsat produced an 8% compound annual growth rate over its existence for shareholders, hardly the deal of the century (and a good lesson for future reference!).


For those interested, an in depth history of Comsat can be found in the book: The Rise and Fall of Comsat

Also, The New York Times article on its IPO is also still available





Comsat stock certificate
Comsat stock certificate



Comsat's first satellite, the Early Bird, launched in 1965
Comsat’s first satellite, the Early Bird, launched in 1965


June 2nd, 1985 RJ Reynolds Tobacco reaches an agreement to buy Nabisco for$4.9 billion.

New York Times coverage of RJR buying Nabisco
New York Times coverage of RJR buying Nabisco

The deal would create the country’s largest consumer products company, and be the most expensive non-oil acquisition in history.

Nabisco would be spun off again in 1999.



Best June 2nd in Dow Jones Industrial Average History:

1932 – Up 5.16%, 2.32 points


Worst June 2nd in Dow Jones Industrial Average History:

1913 – Down 1.42%, -0.81 points

Today’s Reads

Warren Buffett’s 2000 Letter to Shareholders. (I think it’s safe to say he sat out on the Comsat IPO in 1964)

“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”

Source: Letter to shareholders, 2000


Although Comsat was successful, its long term performance was almost identical to the general market (The S&P 500 returned a compounded annual growth rate of 7.87% over the same time period). Investing in companies like Comsat (Maybe the Tesla of today’s market) comes with a lot of risk. Buffett’s comments above are something to keep in mind when sentiment in speculative investments inevitably climb and you feel tempted to invest with the crowd.


<– Go To Previous Day: June 1st: 2009 – GM declares Bankruptcy