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Quote of the Day
We are convinced that the average investor cannot deal successfully with price movements by endeavoring to forecast them.
–Benjamin Graham, The Intelligent Investor
This would become apparent (once again) by looking at the market’s response to Franz Ferdinand’s assassination. The market’s hardly budged, and yet, it turns out to be one of the most significant events of the century that would result in the largest shutdown of the New York Stock Exchange in history.
June 29th – This Day in Stock Market History
June 29th, 1914 – Stocks trade for the first day after the assassination of Archduke Franz Ferdinand on June 28th, 1914. The Dow Jones Industrial Average would have a very muted response to the news, closing down 0.11 points to close at 80.00. However, the mellow reaction would not last and just over a month later the world stock markets would be closed as World War 1 escalates. The NYSE would be closed from July 30th 1914 to December 15th 1914, its longest close ever.
Source: Wall Street and the Stock Markets: A Chronology
June 29th, 2007 – The first Apple iPhone goes on sale.
Although the product was hardly a flop (it would sell 1 million units in 79 days!), it would not be until the 3G version in 2008 that sales really began to take off and investors began to realize the success Apple had on its hands.
At the time of the iPhone’s release, Apple (Ticker: AAPL) had a market cap right around $100 billion. Recently, Apple’s value has risen as high as $1.1 trillion!
June 29th, 2009 – Bernie Madoff is sentenced to 150 years in jail for running his massive ponzi scheme.
Madoff was arrested on December 11th, 2008 as the stock market decline made it no longer possible to continue his ponzi scheme.
Best June 29th in Dow Jones Industrial Average History
1938 – Up 4.21%, 5.49 points.
Worst June 29th in Dow Jones Industrial Average History
1950 – Down 3.71%, 7.96 points.
Read of the Day
In his 1994, Buffett’s shareholder letter read:
“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.
“But, surprise – none of these blockbuster events made the slightest dent in Ben Graham’s investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices. Imagine the cost to us, then, if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist.
Source: Chairman’s Letter, 1994″
But he very well may have referenced World War 1 as well. The Dow would go from about 72 in 1910 to nearly 700 in 1960 despite 2 world wars. For the record, that last sentence by Buffett is one of my all-time favorites.
You can read more of Buffett’s 1994 shareholder letter on Berkshire Hathaway’s website here, or buy all his letters organized in a book: Berkshire Hathaway Letters to Shareholders