• 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: For owners of a business…the academics' definition of risk is far off the mark, so much so that it produces absurdities. For example, under beta-based theory, a stock that has dropped very sharply compared to the market — as had Washington Post when we bought it in 1973 — becomes "riskier" at the lower price than it was at the higher price. Would that description have then made any sense to someone who was offered the entire company at a vastly-reduced price? In fact, the true investor welcomes volatility…. That's true because a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses. It is impossible to see how the availability of such prices can be thought of as increasing the hazards for an investor who is totally free to either ignore the market or exploit its folly.

    Warren Buffett, chairman’s letter, Berkshire Hathaway annual report, 1993,
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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: Robin Griffiths, chief technical analyst at HSBC Securities, predicts that the stock market will crash today because it is only a few trading days before a new moon — which, he says, tends to make the stock market tumble. By the end of the day, the Dow Jones Industrial Average has inched down 0.24%, while the NASDAQ Composite has lost a measly 0.01% — a good reminder that the word "lunatic" is rooted in the Latin word for moon.

USA Today, May 26, 2000, p. B1;The Wall Street Journal, May 30, 2000, p. C1

1983: Daily trading volume on the NASDAQ exceeds the volume on the New York Stock Exchange for the first time ever, at 79,747,400 shares.

Museum of American Financial History

1934: High-speed land travel becomes practical for the first time, as the Burlington Northern's streamlined diesel locomotive The Zephyr whizzes from Denver to Chicago in 13 hrs. and 5 mins., an average speed of 77.6 mph. The ride is so smooth that the railroad's president ostentatiously shaves himself in public using a straight-edge razor — and so economical that the entire trip consumes only $14.64 worth of diesel fuel. It's one of the railroad's finest hours. Unfortunately for Burlington Northern investors, however, high-speed air travel is becoming practical at the same time.

John F. Stover, The Routledge Historical Atlas of the American Railroads (Routledge, New York and London, 1999), pp. 58-59.

1896: The Dow Jones Industrial Average is first published. Its 12 initial members are the great industrial giants of the time: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennessee Coal & Iron, U.S. Leather, and U.S. Rubber. The index's value that day: 40.94.

Phyllis S. Pierce, ed., The Dow Jones Averages 1885-1980 (DowJones Irwin, Homewood, IL, 1982), introduction, not paginated

1667: Mathematician Abraham de Moivre is born in Vitry, France. In 1688, he flees to England to escape King Louis XIV's persecution of the Huguenots. In London, de Moivre discovers the normal statistical distribution (the "bell curve") and works out the formula for standard deviation, or short-term volatility. He also publishes The Doctrine of Chances (1718), one of the earliest intelligent definitions of financial risk: "The Risk of losing any sum is the reverse of Expectation; and the true measure of it is, the product of the Sum being adventured multiplied by the Probability of the Loss."

Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk (John Wiley & Sons, NY, 1996), pp. 125-129