50 Fun Facts About Investing

Which scientist, then Master of the Royal Mint, lost at least £10,000 in the South Sea Bubble of 1720?

Isaac Newton owned nearly £22,000 of South Sea stock as late as 1722, two years after the crash, and his total losses may have passed £20,000.

Which commodity's US futures price fell below zero in April 2020, meaning sellers paid buyers to take it?

Crude oil for May delivery sank to about minus $37 a barrel on 20 April 2020. Lockdowns had crushed demand and the storage tanks at Cushing, Oklahoma, were close to full.

In investing, which animal lends its name to a market that has fallen 20% or more from a recent peak?

Bear markets start at a 20% decline, while a smaller slide of 10% to 20% is only classed as a correction.

Which force did Benjamin Franklin harness by leaving Boston and Philadelphia £1,000 each for 200 years?

Compound interest swelled the two gifts to almost $5 million in Boston and more than $2 million in Philadelphia by 1990. Part of the Boston money founded a trade school along the way.

Which eight-block stretch of Manhattan, running from Broadway to the East River, is shorthand for American finance?

Wall Street follows the line of a real city wall that stood from 1653 to 1699. Dutch colonists put up the first palisade because they feared an overland attack by English troops.

Which investor, nicknamed the Oracle of Omaha, pledged 99 percent of his fortune to philanthropic causes?

Warren Buffett founded the Giving Pledge in 2010 with Bill Gates and Melinda French Gates, asking fellow billionaires to give away at least half of their fortunes.

Which flower was at the centre of a Dutch speculative bubble that collapsed suddenly in February 1637?

Tulip bulbs at the peak sold for more than ten times the annual income of a skilled artisan. Then contract prices fell abruptly and the trade ground to a halt.

Which 1983 Eddie Murphy comedy reaches its climax on the frozen orange juice futures market?

Trading Places inspired a real law: a 2010 ban on using misappropriated government information to trade commodities is known as the Eddie Murphy rule.

Which cryptocurrency was invented by an unknown person writing as Satoshi Nakamoto in a 2008 white paper?

Bitcoin has a built-in ceiling of 21 million coins, and the last of them is not expected to be issued until around the year 2140.

Which term for shares in large, dependable companies comes from the top-value token in a simple three-colour poker set?

Blue chip borrows from the basic poker set of white, red and blue counters, in which the blues are worth the most.

Which investing principle is captured by the old proverb about not putting all your eggs in one basket?

Diversification got its modern mathematics from economist Harry Markowitz, whose 1950s work on mixing assets pioneered modern portfolio theory.

Which former stock exchange chairman was sentenced to 150 years in prison in 2009 for a $65 billion investment fraud?

Bernie Madoff was reported to the authorities by his own sons, Mark and Andrew, straight after he confessed to them in December 2008.

Which city's stock exchange, considered the world's oldest, began in 1602 with shares in a single spice-trading company?

Amsterdam's exchange grew up so that investors could trade shares of the Dutch East India Company, which held a charter over all Dutch trade in Asia.

Which word names the slice of profits a company hands its shareholders, most often every quarter in the United States?

Dividend schedules vary by country: quarterly in the US, twice a year in Japan, the UK and Australia, and annually in Germany.

Dividing which number by an annual rate of return gives the rough number of years for an investment to double?

72 divided by an 8% return gives nine years. The shortcut is at least five centuries old: Luca Pacioli printed it in a Venetian arithmetic book in 1494.

Which low-cost investment, derided as un-American at its 1970s launch, simply tracks a benchmark such as the S&P 500?

Index fund investing reached the public when the First Index Investment Trust was created on the last day of 1975, and rivals nicknamed it a folly.

Which three-letter abbreviation names a company's first sale of shares to the public, as Facebook held in May 2012?

IPO stands for initial public offering. Facebook's raised $16 billion and valued the company at $104 billion.

Which US workplace retirement plan was benefits consultant Ted Benna among the first to set up, at his own employer?

The 401(k) takes its name from the section of the Internal Revenue Code that Congress enacted in November 1978.

Which nickname is given to 29 October 1929, when panicking investors traded some 16 million shares in a single day?

Black Tuesday came five days after Black Thursday, when a then-record 12.9 million shares had been traded.

Which exchange began operating in February 1971 as the world's first fully electronic stock market?

Nasdaq began as an acronym for National Association of Securities Dealers Automated Quotations, named for the trade body that founded it.

Which famous US stock market gauge, first published in 1896, is weighted by share price instead of company size?

Dow Jones launched its industrial average in May 1896 with just 12 stocks and a starting value of 40.94. A pricey share moves it more than a cheaper share in a far bigger company.

Which swindler promised Boston investors a 50% profit within 45 days in 1920 using international postal reply coupons?

Charles Ponzi said he would buy the coupons cheaply abroad and redeem them at face value in America. In reality he was paying earlier investors with the money of later ones.

Which hedge fund manager made about $1 billion on Black Wednesday in 1992 by betting against the British pound?

George Soros was dubbed the man who broke the Bank of England after his fund sold about $10 billion worth of pounds ahead of the currency crisis.

Which Columbia teacher, called the father of value investing, wrote the 1949 guide The Intelligent Investor?

Benjamin Graham used that book to introduce Mr. Market, an imaginary business partner ruled by his emotions from day to day.

Which bet that a share price will fall, placed with borrowed shares, burned hedge funds during GameStop's 2021 surge?

Short selling GameStop had cost bettors a reported $6 billion by 26 January 2021, and one fund, Melvin Capital, lost 53 percent of its investments that month.

Which company, originally a textile manufacturer, has Class A shares priced in the hundreds of thousands of dollars?

Berkshire Hathaway was formed in 1955 from the merger of two textile firms, and its last mills were shut down in 1985.

Which US market regulator, created in 1934, had Joseph P. Kennedy, father of a future president, as its first chairman?

The SEC under Kennedy hired a group of young lawyers that included William O. Douglas and Abe Fortas, both later Supreme Court justices.

In the classic 60/40 portfolio, 60% goes into stocks and the other 40% into which steadier asset class?

Bonds traditionally supplied the steadier 40% of the mix, though many investors have since explored adding alternative assets to smooth out the ride.

Which airline trades under the stock symbol LUV, a nod to its home base at Dallas Love Field?

Southwest Airlines began flying in 1971 as a Texas-only carrier linking Dallas, Houston and San Antonio, and its headquarters sit beside the airfield.

Which corporate action did Apple take in August 2020, giving holders three extra shares for each one they owned?

Stock split arithmetic leaves each holder's stake worth the same. Apple said the four-for-one move would make its shares accessible to a broader base of investors.

Which founder of the Vanguard Group has fans who run an investing forum named after him?

John Bogle's followers call themselves Bogleheads, and their forum takes his investment philosophy as its founding principle.

Which Fidelity manager grew the Magellan Fund from $18 million to $14 billion in assets between 1977 and 1990?

Peter Lynch averaged a 29.2% annual return over those 13 years and told ordinary savers to buy shares in businesses they understood from everyday life.

Which product, popularised by the 1993 Spiders, holds a basket of assets but is bought and sold all day like a share?

Exchange-traded fund pioneers got the Spiders nickname from the product's formal name, Standard & Poor's Depositary Receipts, or SPDRs.

Which measure of a company's size did Apple push past $1 trillion in August 2018, a first for a US firm?

Market capitalization is simply the share price multiplied by the number of shares outstanding. Apple's doubled to $2 trillion by August 2020.

Which valuation measure tells investors how many dollars they pay for each dollar of a company's annual profit?

Price-to-earnings, or P/E, divides the share price by profit per share, so it also shows how many years of profits it would take to pay back the price.

Which retirement account, named after a Delaware senator, takes after-tax money so qualified withdrawals are tax-free?

Roth IRA rules arrived with the Taxpayer Relief Act of 1997, though Senator William Roth had first proposed the idea in 1989 under the name IRA Plus.

Which strategy invests the same sum at regular intervals, automatically buying more shares when prices are low?

Dollar-cost averaging is what many workers already do without noticing, through regular payroll deductions into a workplace retirement plan.

Which crime, dealing in shares on secret company information, earned 1980s financier Ivan Boesky a $100 million fine?

Insider trading also cost Boesky twenty months in prison, and he partly inspired the fictional corporate raider Gordon Gekko.

Which Asian financial hub's stock benchmark is the Hang Seng, created inside a local bank and made public in 1969?

Hong Kong's benchmark was first compiled in 1964 for internal use at Hang Seng Bank, whose founding chairman Ho Sin Hang came up with the idea.

Which body, created by Congress in 1970, steps in to return customers' cash and securities when a US brokerage fails?

SIPC was born in the shadow of the Paperwork Crunch of 1968 to 1970, a record-keeping breakdown that forced more than one hundred brokerage firms into liquidation.

Which Greek letter measures how far a stock's price is expected to move in proportion to the whole stock market?

Beta is usually measured against the S&P 500, and by definition the weighted average of every investable asset's beta is exactly 1.

Which Chicago-born market measure, nicknamed the fear gauge, tracks the swings traders expect in the S&P 500?

VIX is the popular name of the Cboe Volatility Index, which is worked out from the prices of S&P 500 options covering the next 30 days.

Which traders' phrase, first reported in the Financial Times in 1985, means a brief recovery in a sinking stock?

Dead cat bounce was how two journalists described a rebound in the Singaporean and Malaysian stock markets after a hard fall that year.

Which broker's demand for extra cash or collateral shares its name with a 2011 crisis film starring Kevin Spacey?

Margin call notices go out when the collateral in a borrowing account falls below the broker's requirement. Many investors received them as the market sank after the loose lending of the 1920s.

An inverted yield curve, with short-term debt paying more than long-term debt, is widely watched as a warning of what?

A recession tends to follow 7 to 24 months after an inversion, its proponents say, yet the forecasts made after the deep inversion of July 2022 did not come true.

Which commodity did Munehisa Homma trade in 18th-century Osaka, where he is said to have fathered the candlestick chart?

Rice had its own futures market in Japan from around 1710, and Homma's success trading it earned him the nickname the God of markets.

Which Scottish gambler turned financier ran France's Mississippi Company, whose bubble burst in 1720?

John Law founded the company in 1717 to exploit Louisiana, and after its collapse he spent years gambling in Rome, Copenhagen and Venice without regaining his fortune.

Which 2013 Nobel laureate is called the father of the theory that share prices reflect all available information?

Eugene Fama's efficient-market hypothesis began with his PhD thesis at the University of Chicago, and he is also regarded as the father of modern finance.

Which trader, nicknamed the Boy Plunger, netted about $100 million by betting on the crash of 1929?

Jesse Livermore used more than 100 stockbrokers to hide the positions he was building in early 1929.

Which document, filed before securities are sold to the public, is nicknamed a red herring in its preliminary form?

Prospectus drafts earn the fishy nickname from the red-lettered disclaimer printed on the front page of every preliminary copy.