Charles Dow
Charles Dow | |
---|---|
Born | Charles Henry Dow November 6, 1851 Sterling, Connecticut, U.S. |
Died | December 4, 1902 | (aged 51)
Resting place | North Burial Ground Providence, Rhode Island, U.S. |
Occupation | Journalist |
Charles Henry Dow (/daʊ/; November 6, 1851 – December 4, 1902) was an American journalist[1] who co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser.
Dow also co-founded[2] The Wall Street Journal,[3] which has become one of the most respected financial publications in the world. He also invented the Dow Jones Industrial Average as part of his research into market movements.[4] He developed a series of principles for understanding and analyzing market behavior which later became known as Dow theory, the groundwork for technical analysis.
Early life
Charles Henry Dow was born in
Dow specialized in articles on regional history, some of which were later published in pamphlet form. Dow made history come alive in his writing by explaining the development of various industries and their future prospects. In 1877, he published a History of Steam Navigation between New York and Providence.[citation needed] Three years later, he published Newport: The City by the Sea. It was an account of Newport, Rhode Island's settlement, rise, decline, and rebirth as a summer vacation spot and the location of a naval academy, training station, and war college. Dow reported on Newport real estate investments, recording the money earned and lost during the city's history. He also wrote histories of public education and the prison system in the state. Danielson was so impressed with Dow's careful research that he assigned him to accompany a group of bankers and reporters to Leadville, Colorado, to report on silver mining. The bankers wanted the publicity in order to gain investors in the mines.
In 1879, Dow and various
Working on Wall Street
In 1880, Dow left Providence for New York City, realizing that the ideal location for business and financial reporting was there. The 29-year-old found work at the Kiernan Wall Street Financial News Bureau, which delivered by messenger hand written financial news to banks and brokerages. When
The two young men believed that Wall Street needed another financial news bureau. In November 1882, they started their own agency, Dow, Jones & Company. The business' headquarters was located in the basement of a candy store.
In November 1883, the company started putting out an afternoon two-page summary of the day's financial news called the Customers' Afternoon Letter.
Simultaneously to his work in publishing, in 1885 Dow also served as a Partner in the NYSE brokerage house of
Birth of the Wall Street Journal
In 1889, the company had 50 employees. The partners realized that the time was right to transform their two-page news summary into a real newspaper. The first issue of
Dow often warned his reporters about exchanging slanted stories for stock tips or free stock. Crusading for honesty in financial reporting, Dow would publish the names of companies that hesitated to give information about profit and loss. Soon after that, the newspaper gained power and respect from the reading public.
In 1898, the Wall Street Journal put out its first morning edition. The paper now covered more than just financial news. It also covered war, which it reported without rhetoric,[12] unlike many other papers. Dow also added an editorial column called "Review and Outlook" and "Answers to Inquirers," in which readers sent investment questions to be answered. Edward Jones retired in 1899, but Dow and Bergstresser continued working. Dow still wrote editorials, now focusing on the place that government held in American business. The Wall Street Journal set a precedent in reporting during the election of 1900 by endorsing a political candidate, the incumbent president William McKinley.
Dow Jones Averages
The stock price average was created on July 3, 1884, by Charles Dow as part of the "Customer's Afternoon Letter". At its inception, it consisted of 11 companies—9 railroads and 2 non-rail companies, Pacific Mail Steamship and Western Union Telegraph.[13] On September 23, 1889, the “20 Active Stock” index was introduced. It included 18 railroad and 2 non-rail stocks.[14]
In the 1890s, Dow saw that the recession was ending. In 1893, many mergers began taking place, resulting in the formation of huge corporations. These
On October 25, 1896, Dow replaced the 2 non-rail stocks in the “20 Active Stock” index with 2 rail stocks and the index became the Dow Jones Railroad Average (DJRA). The DJRA remained a rail average of 20 stocks until January 2, 1970, when the average was changed to the Dow Jones Transportation Average (DJTA)—9 railroad stocks were replaced by 9 airline and trucking stocks.[14]
Theory of stock price movements
In 1899, Dow started an editorial column in his newspaper in order to educate the general reader until his death in 1902. The column dealt mainly with stock market activities and economic matters. It was in this column that he often put forward his ideas of stock price movements, which were the foundation of what was later called the Dow Theory.[15] Unfortunately, his complete editorial writings are not available to the general reader. However, most of his writings can be found in the following books:
- Samuel Armstrong Nelson, The ABC of stock speculation 'The A B C of Stock Speculation', 1902
- George W. Bishop, Charles H. Dow and The Dow Theory, 1960
- Laura Sether ed., Dow Theory Unplugged: Charles Dow's Original Editorials & Their Relevance Today, 2009
The basic idea of Dow is that the stock price is affected by various factors interacting at the same time, leading to distinct patterns of stock price movement. The first step is to establish from past data the relationship between these patterns and each important factor. Thereafter, by identifying the main factors which are presently working, we can predict the probable future movement of stock price. One of the most important contributions to stock market thought was his theory of the three movements in the market.[16]
Personal
At age 30, having moved to New York City the prior year to accept a job offer, Dow married his wife Lucy, who had a daughter from a previous marriage.[citation needed] The couple had no children of their own.[citation needed]
Death
In 1902, Dow began to have health problems and Bergstresser wanted to retire. The two sold their shares of the company to
See also
- Dow Jones Indexes
- William Peter Hamilton
References
- ^ "On This Day". The New York Times. November 6, 2009.
- ^ a b "Charles Henry Dow | Founder of Wall Street Journal, Dow Theory, Market Analysis | Britannica". www.britannica.com.
- ^ Robert Gavin (October 3, 2006). "Where's the Dow?". The New York Times.
Charles Dow, one of The Wall Street Journal's founders
- ^ John Crudele (February 9, 1986). "The Dow Is Watched More Than It Is Heeded". The New York Times.
- ^ "Charles Henry Dow | Encyclopedia.com". www.encyclopedia.com.
- ^ a b "It All Began in the Basement of a Candy Store". The Wall Street Journal. August 1, 2007.
- ISBN 9780060576578.
- ISBN 9780528811166.
- ^ James K. Glassman (April 17, 2004). "World of Investing : A fresh focus on an old index". The New York Times.
- ^ "Our Heritage". goodbody.ie. Retrieved 27 May 2019.
- ISBN 978-0-3455-1733-3.
- ^ "Dow demanded of his reporters to remain unbiased" -MotFool
- ^ "Dow Jones Averages | Dow Jones Transportation Average | Overview". April 14, 2009. Archived from the original on 2009-04-14.
- ^ a b Data, Bryan Taylor, Chief Economist, Global Financial (August 23, 2020). "The Dow Jones Transport Average". Global Financial Data.
{{cite web}}
: CS1 maint: multiple names: authors list (link) - ^ George W. Bishop, Charles H. Dow and The Dow Theory, 1960 p.88-89
- ^ George W. Bishop, Charles H. Dow and The Dow Theory, 1960 p.105
- ISBN 9780762730001.
External links
- Dow Jones History
- Dow Jones Indexes home page Archived 2014-01-16 at the Wayback Machine
- Dow Jones Averages historical, research and trivia page
- American National Biography
- The Motley Fool