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Quote of the Day
“What you really should have done in 1905 or so, when you saw what was going to happen with the auto is you should have gone short horses. There were 20 million horses in 1900 and there’s about 4 million now. So it’s easy to figure out the losers, the loser is the horse. But the winner is the auto overall. 2000 companies (carmakers) just about failed”
— Warren Buffett, in a speech made to University of Georgia students in 2001.
May 3rd – This Day in Stock Market History
May 3rd, 1999 – The Dow Jones Industrial Average closes above 11,000 for the first time. It would cross the 11,000 point milestone just 24 days after crossing the 10,000 point milestone, a record that would stand for shortest time between 1,000 point levels until January 2018, when it took the Dow Jones Industrial Average just 8 days to go from 25,000 to 26,000.

Chart from Macrotrends
The rapid rise was the tail end of the nearly 10 year long bull market, which led to the tech bubble. After the tech bubble would burst in early 2000, it would be more than 5 years before the Dow would see the 11,000 level again.
Best May 3rd in Dow Jones Industrial Average History
1938 – Up 2.38%, 2.62 points.
Worst May 3rd in Dow Jones Industrial Average History
1930 – Down 3.09%, 8.25 points.
Read of the Day
The 2000 tech bubble brought about many new products and ideas. But much like the auto industry boom in the early 1900s, that did not equate to vast riches for many investors. In fact, only a few tech companies are larger today than they were at the tech bubble’s peak. The tech bubble saw thousands of companies go bankrupt, much like the many auto manufacturers that went bankrupt early on as the automobile became popular.
That lesson is an important one for investors, whether you are looking at crypto-currencies, electric cars, or 3D printing today. Many times, we have seen huge technological breakthroughs lead to amazing improvements to the quality of life, but not an increase of investment value for investors.
From 1904 to 1908, more than 230 separate automobile manufacturers would exist in the United States. It would take 20 years for the “big 3”, Ford, GM, and Chrysler to take a majority of market share. If you were an investor in the early 1900s and bullish on automobiles, 99% of the companies in existence would ultimately prove inconsequential to the long term development of the car, and likely be poor investments for shareholders, despite the tremendous rise of the auto industry.
One of my favorite stories of the auto industry involves one of the big 3 – Ford, who is responsible for one of the largest flops in American business history, the Ford Edsel.
The story is dedicated an entire chapter in the book Business Adventures: Twelve Classic Tales from the World of Wall Street
We also have a page in our ‘This Day in Stock Market History’ on the launch of the Edsel here: August 27th – This Day in Stock Market History: Ford Launches the Edsel
Go To Next Day: May 4th: 1893, The Panic of 1893 is underway, leading to the worst day in stock market history at the time –>