Historical Thought for the Day
March 23, 2010
Thought for the day (A classic from the best investor ever):
Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
–Warren Buffett, chairman's letter, Berkshire Hathaway annual report, 1986.
This day in financial history:
1720: The South Sea Bill, granting virtual monopoly powers to the South Sea Co., passes in the British House of Commons after six hours of fierce debate, during which the price of South Sea shares fluctuates from 270 to 400. The speculation in the stock, which drives the earliest bull market in equities, is in full swing -- but it will end in a terrible crash in the fall.
Source: John Carswell, The South Sea Bubble (The Cresset Press, London, 1960), pp. 122, 126.
1857: Elisha Graves Otis installs the world's first safety elevator for passengers in the E.V. Haughwout and Co. store in New York City. The elevator comes with a safety brake that activates if the cable snaps, and it moves up and down at the astonishing speed of 40 feet per minute.
Source: http://memory.loc.gov/ammem/today/sep20.html
1987: The Standard & Poor's 500-stock index closes above 300 for the first time, less than a year-and-a-half after breaking the 200 barrier. The index finishes the day at 301.16.
Source: David M. Blitzer, chief investment strategist, Standard & Poor's Corp.
Source: Jason Zweig
