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Quote of the Day
“There were two-thousand auto companies: The most important invention, probably, of the first half of the twentieth century. It had an enormous impact on people’s lives. If you had seen at the time of the first cars how this country would develop in connection with autos, you would have said, ‘This is the place I must be.’ But of the two-thousand companies, as of a few years ago, only three car companies survived. And, at one time or another, all three were selling for less than book value, which is the amount of money that had been put into the companies and left there. So autos had an enormous impact on America, but in the opposite direction on investors.”
-Warren Buffet in 1999 in Sun Valley, Idaho.
This quote comes from a speech Buffett gave in 1999 at the “Elephant-bumping” meeting that is Sun Valley, where the world’s biggest and most important got together to talk and discuss the year’s events. In 1999 Buffett was giving his talk on valuing the stock market. But, this was not ordinary times. The technology bubble was in full swing, creating billionaires from websites whose only valuation metrics were “eyeballs” and “clicks”. Buffett warned the audience of the dangers of these valuations. But this year, his warnings would fall on deaf ears…
November 13th – This Day in Stock Market History
November 13th, 1998 – TheGlobe.com has it’s initial public offering and soars 606% on the day. Early subscribers to the IPO bought shares for $9, the shares closed the day at $63.50 per share and traded as high as $97.
The IPO gave Theglobe a market cap of about $880 million. The company had reported a net loss of $11 million through the first 9 months of the year, on revenue of $2.7 million.
However, the party for theglobe would not last long. By April 23rd 2001 the stock would close at 16 cents per share and be delisted from the NASDAQ.
However, shares are still traded OTC (over the counter). Just search TGLO on any financial website and you can still buy a piece!
Long way to go to get back to $62.35!
It is just a shell company that gets leftover revenue from a previous deal. You can read more about what TheGlobe is today on the site: TheGlobe.com (EDIT: Website may be down as of 2020. We are waiting to see if it comes back)
Best November 13th in Dow Jones Industrial Average History
2008 - Up 6.67%, 552.59 points.
Worst November 13th in Dow Jones Industrial Average History
1929 - Down 5.27%, 11.05 points.
Read of the Day
What else was going on in 1998?
As I was browsing old newspapers for today's "This Day in Stock Market History", I came across this article from the New York Times published on November 14th 1998, a special on the collapse of Long Term Capital Management, which had just collapsed after the financial crisis in 1998:
WHEN THEORY MET REALITY: A special report.; Teachings of Two Nobelists Also Proved Their Undoing
Long Term Capital Management's (LTCM) investment thesis was based on models that came from 2 Nobel prize winners, it was ran by some of the most successful Wall Street guys that existed. For several years it was one of the most successful hedge funds in existence. But in late 1998 it failed and almost brought down the financial system with it.
The piece in the New York Times is a great brief of the fund and its history. If you are interested and looking for a more in depth look, I highly recommend When Genius Failed: The Rise and Fall of Long Term Capital Management, The book is a classic and details the story of Long Term Capital better than anywhere else I have seen. From the buildup and its immense profits, to its collapse and staggering losses, When Genius Failed is an awesome look of just how hard it is to be successful on Wall Street.
Go to Next Day: November 14th, 1972 – The Dow Jones Industrial Average closes above 1,000 for the first time in history. -->
