Quote for the Week
It is my memory that virtually every bull market has had its equivalent of an America Online and a Yahoo. Some of my nominees for historical Internet equivalents will probably shock those of you under 50 years of age. Believe it or not, the Yahoo and AOL of the mid-1950s were Superior Oil and Amerada Petroleum. The Magellan Fund of the day was a fund called One William Street managed by Lehman Brothers. Its phenomenal record in the 1950s rested largely on the fact that it had over 15% of its portfolio in Amerada Petroleum. The same phenomenon was seen again a decade later with Dreyfus Fund and its oversized commitment to Polaroid. The list goes on. In the 1960-61 bull market the darlings of the moment were in financial services. The stocks that you absolutely had to own were Kansas City Life, U.S. Life, Hugh W. Long and Hamilton Management. It’s hard to believe that mutual fund management stocks were really hot stocks 40 years ago…
1968 brought us the wildest IPO market I’ve ever seen until just lately. The darlings of the moment, of course, were the fast food companies. The stocks you absolutely had to own were Kentucky Fried Chicken and Denny’s. If you want to check out something close to a high water mark in foolishness, go back and look at Minnie Pearl’s Fried Chicken. The company went public on the basis of having sold thousands of franchises. It achieved a market value of about $400 million before quietly going out of business having actually having built only two or three chicken stands. On we go to the two tier market of 1972 where there were lots of stock you absolutely had to own, but the list included such notables as Avon and Polaroid that 27 years later are nowhere near their highs of 1972.
My point in all this is that the market is screwy most of the time. Today it is particularly screwy. — Robert Kirby 1999 (source)
From the Archives
Last Call
- The Benefits of Bubbles – Stratechery
- Marks Memo: Cockroaches in the Coal Mine – Oaktree
- When the Improbable Becomes Inevitable – L. Swedroe
- Growth Stocks Can Be Great, But They Aren’t the Only Road to Riches – J. Rekenthaler
- 5 Lessons for Investors from the Global Market Portfolio – Morningstar
- Scams at Scale – S. Godin
- How Your Brain Creates ‘Aha’ Moments and Why They Stick – Quanta
- Roy Disney: The Alibi Behind the Curtain – The Builders
- Can “The Simpsons” Really Predict the Future? – MIT Tech Review
- The Blue Book Burglar – Atavist