Manifest-ed Destiny
Seen this weekend on what may or may not have been a milestone birthday, Manifest Destiny by Alexis Rockman at Smithsonian American Art Museum is a post-apocalyptic vision of the Brooklyn waterfront submerged beneath elevated waters, a victim of the effects of climate change. On the left, a futuristic suspension bridge is swallowed by the East River while on the right, the historic Brooklyn Bridge stands in ruinous decay. But Rockman suggests that the end of modern civilization does not mark the end of all life on Earth. Flora and fauna flourish among the remains, confirming that life, in some form, persists even if humanity does not.
In Major Dog News:
Bad Dog! Commander Draws Blood, Gets Presidential Boot
According to new records, a bite from Commander at the president’s Rehoboth Beach home caused an agent to lose a “significant amount of blood” from his arm. https://nypost.com/2024/02/21/us-news/biden-dog-commander-drew-blood-with-attacks-on-secret-service-at-white-house-vacation-home-documents.
Trial to Test SEC “Shadow Insider Trading” Theory
Biotech executive Matthew Panuwat bought options on another drug company’s stock—and earned a windfall of $120,000. The Securities and Exchange Commission now says he committed insider trading, even though he didn’t buy his employer’s stock and didn’t have inside information about the company he bet on.
Defense lawyers have dubbed Panuwat’s case the first involving “shadow insider trading,” a label that describes executives making well-timed bets in the shares of other companies. The SEC alleges Panuwat purchased options tied to the shares of Incyte, a rival drugmaker, because he knew they would pay off when the market heard Pfizer was buying his company, Medivation, in 2016.
The fact that the case survived the defendant’s motion for summary judgement is a bad sign as it means that the SEC asserted at least one legal theory they could prove at trial. https://www.wsj.com/finance/regulation/an-executive-bought-a-rivals-stock-the-sec-says-thats-insider-trading.
Veteran Trader Peter Brandt Words of Wisdom
"I hate to be the bearer of bad news to some of you, but taking losses is the primary job description of a market speculator."
"Over the years as a trader Im a net loser on trades I had not decided to do at least 12 hours in advance."
"Never chase a signal. Never. There will always be an other day. Another market. If you miss a move, so what?"
"The biggest enemy of any professional trader is self. Successful trading is an upstream swim against human nature."
"My default thinking as I enter a trade is that I will be wrong. This attitude makes me much more sensitive to risk management."
"A begining trader must first learn how to lose in order to learn how to win. Losing is primary a function of capital preservation."
Lessons From The Witch of Wall Street
Known for her eccentric frugality, worn appearance, and daily attire of a simple black dress, Hetty Green aka the “Witch of Wall Street”, predicted the 1907 crisis about three years before the devastation hit. She made a fortune bailing out New York City with a $1.1 million loan in exchange for short-term government bonds.
Green was considered the world’s richest woman in the late 19th and early 20th centuries. At her death in 1916, her net worth was between $100 million and $200 million. Adjusted for inflation, she would’ve been worth up to $5.4 billion today. What was the secret to her fortune? “There’s no great secret,” The Witch of Wall Street famously said. “All you have to do is buy cheap and sell high, act with thrift and shrewdness, and be persistent.”
Green was interested in investments with reliable dividends, like railroads and real estate. Her real estate investment strategy was to buy property cheaply when nobody wanted it, hold onto it until there was interest, and then sell high. She was less active in stocks but did have a fondness for government bonds despite the fact they didn’t pay a high interest rate. However, when she did buy stocks, she preferred buying them for investment and not for speculation and would “never buy on a margin.”
Brightest objects in the universe:
Second brightest:
This Day in History
On February 20th, 1795 – Robert Morris, financier of the American Revolution, creates the North American Land Company. Morris was very wealthy, and personally paid more than 10 million pounds of his own money to George Washington’s army during the Revolutionary War. After the war, Morris became heavily invested in real estate, and pooled his land with James Greenleaf and John Nicholson on this day in 1795 to form the North American Land company. The company would be one of the largest land trusts in history, holding a total of 6 million acres of land in the District of Columbia, Georgia, Kentucky, North Carolina, Pennsylvania, South Carolina, and Virginia.
North American Land Company stock certificate.
Morris would offer 30,000 shares of stock to the public for $100 each. The company was similar to today’s Real Estate Investment Trusts (REITs), investors were promised a 6% yield, and a complete return of their capital when the property was sold.
By 1797 the North American Land Company owned more land in America than any other individual or company. But the Panic of 1797 led to credit markets drying up. Morris was unable to get new loans to finance his business, and despite his vast property holdings, had no cash to repay his creditors. Pre-moral hazard days, Morris would end up in debtors prison until the US Bankruptcy act of 1800 was passed that would get him out of prison.
On February, 18th 1862 Charles M. Schwab was born. Schwab started his career with Andrew Carnegie’s steelworks at age 17, and became President of Carnegie and then US Steel and later pioneered Bethlehem Steel into the nation’s second largest steel company. Demand for steel soared during WWI and Schwab’s idea of the “H” Beam would revolutionize the building of skyscrapers.
Schwab eventually became very wealthy. He moved to New York City's Upper West Side where he built "Riverside", the most ambitious private house ever built in New York City. The $7 million 75-room house, designed by French architect Maurice Hébert, combined details from three French chateaux on a full city block.
Schwab became notorious for his "fast lane" lifestyle including opulent parties, high-stakes gambling, and a string of extramarital affairs producing at least one child out of wedlock. The affairs and the out-of-wedlock child soured his relationship with his wife and with Puritan Andrew Carnegie. Even before the Great Depression, he had already spent most of his fortune, estimated at between $25 million and $40 million. Adjusted for inflation in the first decade of the 21st century, that equates to between $500 million and $800 million. This takes some effort.
The stock market crash of 1929 finished off what years of wanton spending had started. He spent his last years in a small apartment. He could no longer afford the taxes on "Riverside", and it was seized by creditors. At his death he was over $300,000 in debt. You don’t see a billionaire die broke too often but I guess he led an interesting life.
On February 15th, 1898 – The US Battleship Maine is sunk near Cuba after hitting a mine. Or was it a coal fire accident? At the time tensions were high. US Stock markets would decline 16% over the next 4 weeks as fear of war spread. By April the United States would be at war with Spain.
Fire-bombing of Dresden, Germany
In four raids between 13 and 15 February 1945, 772 heavy bombers of the Royal Air Force (RAF) and 527 of the United States Army Air Forces (USAAF) dropped more than 3,900 tons of high-explosive bombs and incendiary devices on the city. The bombing and the resulting firestorm destroyed more than 1,600 acres (6.5 km2) of the city centre. Up to 25,000 people were killed.
In 1947 – Polaroid demonstrates its first instant camera.
Polaroid was one of the premier tech stocks of its day. The company’s founder, Edwin Land, was a prolific inventor who was viewed as the next Thomas Edison, and was a huge inspiration to Apple’s founder Steve Jobs.
Land would found the company in 1937 after studying chemistry at Harvard for a year and inventing the plastic sheet-light polarizer in 1929. Land would run Polaroid from its founding in 1937 until 1981, seeing his company grow to as many as 28,000 employees and doing $1.4 billion in sales. However, the company was never able to adapt to the rise in digital photography, and would be bankrupt by 2001.
In 1959, Lee Petty wins the first Daytona 500. His son Richard Petty, aka the “King”, went on to win a record 7 Daytona 500s amongst many other records.
In 1965, religious and civil rights leader Malcom X was assassinated while giving a speech in New York City. In a stunning deathbed confession, a NY City policy officer admitted in 2021 that he, in coordination with the FBI, was ordered to arrest Malcolm X’s security guards the day prior to his speech so that he would be unprotected. https://www.washingtonpost.com/history/2021/02/22/malcolm-x-assassination-letter-nypd-fbi/.
In February 16th, 1990 – Cisco System Inc. has its initial public offering at $18 per share, or about $0.04 split and dividend adjusted today! Shares would rise 24% on the first day of trading, giving the company a market cap of about $270 million.
By the peak of the tech bubble Cisco stock rose over 165,000% from its IPO price.
On March 25th, 2000, Cisco would pass Microsoft to become the most valuable public company in the world, with a market cap of $579 Billion. Shares have never recovered their tech bubble highs.
In 2001, “Initial Sequencing and Analysis of the Human Genome” by the International Human Genome Sequencing Consortium, the first draft of the complete human genome, is published in the journal Nature.
More recently in late 2023, Crisper Therapeutics $CRSP received the first ever FDA approval for a gene-editing treatment to treat sickle cell disease. https://www.scientificamerican.com/article/fda-approves-first-crispr-gene-editing-treatment-for-sickle-cell-disease/.
Today…
Lower valuations, better governance, more foreign interest and aversion to investment in China are seen as supporting the trend higher. https://www.reuters.com/markets/asia/nikkei-parties-like-its-1989-scales-record-high-2024-02-22/.
Behavioral Economics Principle of the Day
Priming Effect: The influence of subtle cues or stimuli on subsequent thoughts, perceptions, and behaviors. It can lead to irrational behavior by activating unconscious associations or biases that affect decision-making without individuals being aware of it.
