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Quote of the Day

“It’s amazing how history keeps repeating itself. The market in stocks and bonds has taken a precipitous drop, but I am far from depressed. Why? Because once again we are seeing and will be seeing great opportunity in all areas.”

-Alan Greenberg, CEO of Bear Stearns, whose firm was founded on this day in 1923.


May 1st – This Day in Stock Market History


May 1st, 1923 – Bear Stearns is founded with $500,000 in capital.

bear stearns logo

The company had a long and storied history, and would eventually become one of the primary investment banks on Wall Street.

In fact, the company would never post a negative earning quarter through its history until the 2008-2009 financial crisis!

In 2006, the company would post a record profit of $2.05 billion. Shortly thereafter, its market cap would be over $22 billion.


Unfortunately, by then the good times were nearly up for Bear.


The company is famous today for its failure during the 2008 financial crisis, where its share price fell from $171 per share to $2 in just over a year:

Bear Stearsn Stock Chart

The company would be sold to JP Morgan on March 16th, 2008 for $2 per share. (That buyout offer would eventually rise to $10 per share)



May 1st, 1933 – Last day for Americans to turn in their gold after Executive order 6102 outlawed the ownership of gold. Citizens were forced to exchange their gold for $20.67 per ounce.

The executive order was signed April 5th, 1933, and gave Americans less than one month to turn in their gold. The penalty for failing to comply was a $10,000 fine, or 10 years in prison.

New York Times coverage of law banning ownership of gold
New York Times coverage of law banning ownership of gold



May 1st, 1975 – “May Day” as the New York Stock Exchange abolishes fixed commissions of 0.25% to brokers. The 0.25% commission was established nearly 200 years earlier by the signing of the Buttonwood agreement on May 17th, 1792.


Source: Eyewitness to Wall Street: 400 Years of Dreamers, Schemers, Busts and Booms


May 1st, 1975 – The mutual fund company Vanguard begins its operations.

vanguard logo2

The company was founded by John Bogle and would originally launch with 11 funds and $1.8 billion under management. The company would launch its first index fund a year later – August 23rd, 1976.

Today, the company has 410 different funds with more than $5.2 trillion under management.


Read More: 12 Investing Rules by Jack Bogle



Best May 1st in Dow Jones Industrial Average History

1974 – Up 2.05%, 17.13 points.


Worst May 1st in Dow Jones Industrial Average History

1931 – Down 3.71%, 5.61 points.



Read of the Day

Our quote of the day is from Alan Greenberg, one of Bear Stearns’ (and all of Wall Street’s) most famous leaders. He was CEO was 1978 to 1993, and would be involved in the company through 2001.

He has an excellent collection of his memos available in a book, Memos from the Chairman

memos book cover


One of my favorite memos? This gem, with him complaining about the cost of paper clips:

I was just shown the results for our first quarter. They were excellent. When mortals go through a prosperous period, it seems to be human nature for expenses to balloon. We are going to be the exception. I have just informed the purchasing department that they should no longer purchase paper clips. All of us receive documents every day with paper clips on them. If we save these paper clips, not only will we have enough for our own use, but we will also, in a short time, be awash in the little critters. Periodically, we will collect excess paper clips and sell them (since the cost to us is zero the Arbitrage Department tells me the return on capital will be above average). This action may seem a little petty, but anything we can do to make our people conscious of expenses is worthwhile.

In addition to the paper clip caper, we are also going to cut down on ordering the blue envelopes used for interoffice mail. These envelopes can be used over and over again. All of us are going to help our bottom line grow.

Bear Stearns is probably going to sell stock to the public, and there is one guarantee that I would like to give the potential buyers of our stock – they are going to get the fairest shake from us that management can give any public shareholder. This place is going to be run tight, and the reasons are not all altruistic. We are not going public for the perks. We are going public for a number of reasons, and one is that we want the stock to appreciate.

Go To Next Day: May 2nd, 1985 – Microsoft announces Excel to compete with Lotus’ spreadsheet software –>