On this day in economic and financial history...
The scientific field of genetics can trace its origin to Feb. 8, 1865, the date friar Gregor Mendel first presented his Experiments on Plant Hybridizationto the scientific public. The paper outlined what has since become the commonly accepted theory of genetic inheritance, which Mendel explored through the pea plants in his monastery. Mendel's discoveries were too far ahead of his time, and it was not until the start of the 20th century that his ideas became widely accepted.
Genetics eventually led to the discovery and manipulation of DNA, which has since given way to genomics, which in our time relies on sophisticated technology to sequence and analyze the structure of an organism's entire set of hereditary information. Genomics is an exciting field, with plummeting sequencing costs suggesting that routine use will soon be possible. Illumina (NASDAQ:ILMN) and Life Technologies are presently seen as industry leaders, but the rapid pace of technological progress in genome sequencing may not allow them to hold that position for long. Both have been the target of buyout interest recently, and the deep pockets of a major biotech company might accelerate the progress of sequencing advances to the point where you'll have your genome sequenced at the doctor's office with every physical before the decade is out.
New kid on the stock market
For many years, the New York Stock Exchange was the only real game in town for serious investors. On Feb. 8, 1971, that finally changed when the National Association of Securities Dealers Automated Quotation, or Nasdaq went live for the first time, offering quotes on 2,500 over-the-counter securities. Its electronic trading system has since become the standard, greatly easing and enhancing the flow of shares around the investing world. Nasdaq became the first exchange to facilitate online trading, and it also formed the first intercontinental link of securities markets with the London Stock Exchange in 1992. Allowing online trades gives Nasdaq a legitimate right to call itself "the stock market for the next hundred years."
The Nasdaq's life began with its signature Nasdaq Composite index in action. Over the years, this index has become known as the tech-heavy alternative to the more conservative Dow Jones Industrial Average (DJINDICES:^DJI), particularly during and after the dot-com bubble.
The Nasdaq began at 100 points on that Feb. 8, and the Dow was at 882 points. From then until the day before 1987's Black Monday, the Nasdaq grew 300% -- twice the rate of the Dow. From the day of the crash to the peak of the Nasdaq in March 2000, the Nasdaq index gained 1,300%, well more than double the Dow's 470% gain. Despite the huge decline that followed its dot-com peak, the Nasdaq remains firmly in the lead of this race. From the Nasdaq's opening to its 40-year anniversary in 2007, the index grew 2,700% to the Dow's 1,300%. Maybe investing in the future is a better option than playing it safe, after all.
The dawn of the modern airline
The first modern passenger airliner took off on its maiden flight on Feb. 8, 1933. That was the day Boeing (NYSE:BA) set passenger airline service on the path to ubiquity. The Smithsonian's National Air and Space Museum (where you can glimpse the first D-model 247 Boeing ever built) states that this airliner revolutionized air transportation when it entered service. At a top speed of 200 miles per hour, the 247 was 50% faster than its competitors. Its basic design -- all-metal body, an engine on each wing, retractable landing gear, and autopilot -- is still familiar to modern jet airliner passengers today.
The 247 was less capable than it might have been, because Boeing's early design collaboration with United Air Lines, its first customer, showed that pilots were afraid of the original concept's extreme capabilities relative to the aviation infrastructure and skill sets then in place. The pilots also objected to the use of Pratt & Whitney Hornet engines, which were not commonly used at the time and were more powerful than P&W's popular Wasp engines. The slimmed-down, power-limited 247 thus had its weight reduced from eight tons to slightly less than seven tons, which reduced the number of passengers it could carry from 14 to 10. Despite these limitations, it still far exceeded the abilities of other passenger aircraft and could make a 20-hour, seven-stop trip from New York to Los Angeles, cutting nearly eight hours off the time needed by other airliners.
Boeing didn't get to enjoy its dominance for long. Less than three years later, Douglas Aircraft launched the hugely successful DC-3, which continues to fly in parts of the world to this day. Boeing eventually got the last word when it merged with McDonnell-Douglas in 1997.
The fall of an auto pioneer
On Feb. 8, 1936, William C. Durant, the founder of General Motors, filed for bankruptcy. Like many others, he had lived large before and during the Roaring Twenties, but the Great Crash of 1929 had devastated him along with the rest of the country. Reporting nearly $1 million in debt, Durant listed his assets as worth a total of $250.
Durant was the son of a successful investor and the grandson of a railroad magnate who became mayor of Flint, Mich. Born already on third base, Durant stole home when he used family money to create a horse-drawn wagon company in 1884. His innate business acumen was superlative, and the Flint Road Cart Company, as it was called, eventually became the world's biggest wagon company. Durant leveraged this success into ownership of Buick in 1904, which was a brilliant move into an upstart industry that would have otherwise destroyed him. In 1908 he cobbled together a number of smaller auto companies to form General Motors. Three years later, he was overextended and lost control of the company. He founded Chevrolet that year, took control of it in 1914, and a year later had engineered a buyout that brought him back to GM with enough of a stake to regain his leadership of the company.
By 1920, Durant was ousted by DuPont, which had by then taken a substantial stake in the automaker. He left with a fortune of $90 million, which he lost in the 1920 crash. GM went on to become the world's largest automaker in 1931, making him perhaps the only known entrepreneur to create corporate category-leaders not only in one product, but also the product that replaced the first. He went on to found Durant Motors, which never got very far, but he later became "probably the most powerful individual force in the market," with the combined assets of his investing consortium totaling nearly $1.3 billion, according to The New York Times. He lost his grip on that massive pile of money in the Crash of 1929, which proved far worse than the crash in 1920. Durant Motors failed in 1933. After his bankruptcy, Durant spent the rest of his life managing a bowling alley.
Where do we go now?
Google Maps, one of Google's (NASDAQ:GOOGL) most important and widely used products, launched on Feb. 8, 2005. It went live with little fanfare, entering beta with an announcement posted to the company's official blog by product manager Bret Taylor. After six months, it was available for all users.
Originally the product of two Danish brothers that Google "acqui-hired" in 2004, Google Maps has grown to become the de facto mapping standard for millions of people around the globe. A 2012 feature in The Atlantic highlights the depth of Google's commitment to making better maps. Google's Street View cars, which help flesh out the ground-level data on Maps, have driven more than 5 million miles, and they now generate more image data every two weeks than Google had in the two years after the service launched. A team corrects and enhances everything by hand, ensuring that every frame of map data has the maximum possible utility for its users.
Google's Maps could eventually become as important for the company as its core search product, especially if those self-driving cars wind up taking the highways by storm. Its value was evident in 2012 when a furor broke out over Apple's (NASDAQ:AAPL) attempt to replace Google Maps in the iPhone with its own mapping app, which drew much derision for its inaccuracies. When Google finally relaunched a downloadable Maps app, it became an instant hit, with more than 10 million downloads in its first two days in the App Store. There would have been more downloads, but a number of Apple Maps users were probably stuck in Guadalajara after trying to find their favorite Mexican restaurant.
The Motley Fool recommends Apple, General Motors, Google, Illumina, and NYSE Euronext. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.