Editorials & Other Articles

Zorro

(15,743 posts) Wed Oct 18, 2017, 07:15 PM Oct 2017

30 years after Black Monday, could stock market crash again?

It’s been three decades since Black Monday, the most disastrous single day in U.S. stock market history, and investors should be forgiven for wondering if Wall Street learned any lessons from that cataclysmic day.

On Oct. 19, 1987 the Dow Jones Industrial Average DJIA, +0.70% tanked 508 points, a fall of nearly 23%, in a chaotic, daylong selling frenzy that ricocheted around the world. The S&P 500 SPX, +0.07% shed more than 20% of its value. At today’s market heights, a percentage fall of that magnitude would knock more than 5,200 points off the DJIA.

The crash was blamed on a number of factors, but at heart, it was the growing complexity of the market that seemed to overwhelm participants and set the stage for the calamity. Computerized trading, then in its infancy, combined with new hedging strategies that used relatively newfangled stock-index futures contracts were all part of the picture.

Since then, financial markets have been transformed by the march of time and technology and regulatory change.

http://www.marketwatch.com/story/30-years-after-black-monday-could-stock-market-crash-again-2017-10-16

I remember the day quite clearly. I was on vacation in London, and cashed all my traveller's checks and converted them into pounds, since no one knew what the effect would be on the exchange rate.

9 replies

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30 years after Black Monday, could stock market crash again? (Original Post) Zorro Oct 2017 OP

I think that's a guaranteed event unfortunately. Throck Oct 2017 #1

Don't know when but one thing for sure what goes up eventually comes down nt doc03 Oct 2017 #2

YES! Thunderbeast Oct 2017 #3

Message auto-removed Name removed Oct 2017 #4

Do you recall the stock market crash in 1987? Zorro Oct 2017 #5

I remember I was "let go" along with another BigmanPigman Oct 2017 #6

Republican policies... czarjak Oct 2017 #7

Yes with S&P futures 2568-74 as a top...we are close masmdu Oct 2017 #8

If you don't think the broad market will eventually HeartachesNhangovers Oct 2017 #9

Throck

(2,520 posts)

1. I think that's a guaranteed event unfortunately.

Reply to Zorro (Original post)

Wed Oct 18, 2017, 07:18 PM

Oct 2017

doc03

(35,354 posts)

2. Don't know when but one thing for sure what goes up eventually comes down nt

Reply to Zorro (Original post)

Wed Oct 18, 2017, 07:22 PM

Oct 2017

Thunderbeast

(3,417 posts)

3. YES!

Reply to Zorro (Original post)

Wed Oct 18, 2017, 08:15 PM

Oct 2017

.....and it will be Obama's fault.

Response to Zorro (Original post)

Name removed Message auto-removed

Zorro

(15,743 posts)

5. Do you recall the stock market crash in 1987?

Reply to Name removed (Reply #4)

Wed Oct 18, 2017, 08:57 PM

Oct 2017

I suggest that 23% drop in a single day is hardly chicken little crap.

BigmanPigman

(51,613 posts)

6. I remember I was "let go" along with another

Reply to Zorro (Original post)

Wed Oct 18, 2017, 10:16 PM

Oct 2017

"artist's assistant " 3 days later after being employed for 6 months. I remember I couldn't get a job to save my life as a student in the early 80s and after graduating college later in the 80s under Reagan and "trickle down economics". I remember that when I did get a steady job at Macy's in display in the early 90s during Bush #1 I was in constant fear of being laid off, I remember changing careers and being able to do so when Clinton was the president and I could get unemployment for a year while I went back to college to get a teaching degree. I remember not getting a raise or a cost of living increase for 5 straight years after Bush #2 and the crashes in 2007 and 2008. Yes, I remember that Republicans caused me great economic harm while the Democratic presidents had to clean up their shit. I remember!!!

czarjak

(11,284 posts)

7. Republican policies...

Reply to Zorro (Original post)

Wed Oct 18, 2017, 10:49 PM

Oct 2017

And the self-proclaimed "king of debt"? Perfect mixture.

masmdu

(2,536 posts)

8. Yes with S&P futures 2568-74 as a top...we are close

Reply to Zorro (Original post)

Thu Oct 19, 2017, 06:08 AM

Oct 2017

Only 15 or so points away....

HeartachesNhangovers

(814 posts)

9. If you don't think the broad market will eventually

Reply to Zorro (Original post)

Thu Oct 19, 2017, 03:05 PM

Oct 2017

Last edited Thu Oct 19, 2017, 05:25 PM - Edit history (1)

fall by at least 25%, and then take more than a year to recover, you are wrong. Right now, anyone who owns equities should have a plan about what to do when the market turns around. At what point are you going to act, specifically at what level of which index or indicator? What are you going to do? If you are going to sell, what holdings specifically are you selling? What are you going to do with the money? If you are going to buy, what exactly are you going to buy?

Unless you have an explicit plan - and stick to that plan - you are either going to do nothing, or you are going to sell in a panic.

In 1987, I'd been working for about 4 years and had a few thousand bucks in stock in a 401K - little enough that I wasn't worried about losing it. I worked for a large company with many employees who had been there a long time and had a lot to lose. I'll never forget the panic on some of their faces as they listened to radio updates throughout the day.

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