• Summon Your Courage and Buy Stocks

    Investors who conquer stock-phobia have an edge over those too focused on their rearview mirror By Jason Zweig 2025: Oct. 4, 2008 12:01 am ET During the Great…

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  • Thought of the Day

    Thought of the Day

    2000: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.

    Warren Buffett, chairman’s letter, Berkshire Hathaway annual report, 1997,
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Jason is the author of “Your Money and Your Brain,” on the neuroscience of investing, and the editor of the revised edition of Benjamin Graham’s “The Intelligent Investor,” the classic text that Warren Buffett has described as “by far the best book about investing ever written.”

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Today in Financial History

2000: Shares in MicroStrategy Inc., a hot software consulting firm, fall from $246.75 to $86.75 in a single day as chairman Michael Saylor announces that the company will have to slash its reported revenues and earnings for the past two years. Saylor defiantly declares: "Our future today is better than it was 18 months ago." Nine months later, Saylor settles charges of accounting fraud with the SEC, paying an $8,280,000 fine; by yearend 2000 the stock will be at $9.50, a 96% fall in nine months.

The Wall Street Journal, March 21, 2000, p. B1;The Washington Post, March 21, 2000, p. A1

1929: The most notorious "pool," or stock manipulation, of the 1920s hits its peak as RCA hits a new high of $115, or 73 times earnings and 17 times book value. RCA — the dot-com stock of its day — is being bought (and sold short) by such respectable figures as Walter Chrysler, General Motors executive John J. Raskob, and Percy Rockefeller. They get out at the top, while most retail investors suffer losses of up to 77% after the bubble bursts in the Great Crash.

Barrie A. Wigmore, The Crash and Its Aftermath: A History of Securities Markets in the United States, 1929-1933 (Greenwood Press, Westport, CT, and London, 1985), p. 86.

1602: The western world's first major publicly traded company is born, as the Dutch legislature grants a monopoly on trade to the Verenigde Oostindische Compagnie, or Dutch East India Company, which deals in booming consumer products like cloves, tea, black pepper, and Chinese porcelain. In 1609, the company's directors declare that investors cannot sell their shares back to the company, but only to other investors — giving birth to the modern stock market.

Larry Neal, The Rise of Financial Capitalism: International Capital Markets in the Age of Reason (Cambridge University Press, Cambridge, 1990), pp. 8-9;Violet Barbour, Capitalism in Amsterdam in the 17th Century (Univ. of Michigan Press, Ann Arbor, 1976), pp. 17, 77