Learn what happened in business in today’s past

 

May 26:

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; http://averages.dowjones.com

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 (www.financialhistory.org).

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; http://averages.dowjones.com

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; http://www-groups.dcs.st-and.ac.uk/~history/Bookpages/DeMoivre10.gifhttp://www-groups.dcs.st-and.ac.uk/~history/Mathematicians/De_Moivre.htmlhttp://en.wikipedia.org/wiki/Abraham_de_Moivre