Read on Twitter
On Friday, October 16th 1987, the US stock market fell by a record 108.65 points.
Most professionals saw that decline as the finale to a major correction
They saw it as a selling climax or capitulation, a bottom.
Most professionals saw that decline as the finale to a major correction
They saw it as a selling climax or capitulation, a bottom.
Not Martin Zweig however. On Wall Street Week with Louis Rukeyser he stated " The market's in danger. I think we can go down another 500 points from here"
Little did he know that his prediction would come true on that fateful Monday...
Little did he know that his prediction would come true on that fateful Monday...
On Monday, October 19, 1987, the US stock market fell by 22.60%. It was 508 points, the largest one day decline in history of the Dow Jones Industrials Average
Immediately, everyone started drawing paralels with the 1929 crash...
Immediately, everyone started drawing paralels with the 1929 crash...
Luckily, a crash was averted. Perhaps a lot of investors sold their stocks after the crash.
One of the godfathers of the FIRE movement admitted to selling all of his stocks in 1987/1988.
The crash of 1987 was merely a blip on the radar however..
One of the godfathers of the FIRE movement admitted to selling all of his stocks in 1987/1988.
The crash of 1987 was merely a blip on the radar however..
If you had invested in S&P 500 at the highest point in 1987, $337.89 points, you did suffer through a 36% drawdown.
But just on price alone, you would have a 10 bagger
You would be earning a 17.50% yield on cost, given annual dividends of 58.80 for S&P 500 in 2019
But just on price alone, you would have a 10 bagger
You would be earning a 17.50% yield on cost, given annual dividends of 58.80 for S&P 500 in 2019
A $1,000 investment in S&P 500 at the highs in August 1987, with dividends reinvested would have turned to $20,677 by yesterday.
If you stuck to your plan, and ignored all the noise, fear and greed you would have had a 20 bagger in 33 years, despite buying at the high for 1987
If you stuck to your plan, and ignored all the noise, fear and greed you would have had a 20 bagger in 33 years, despite buying at the high for 1987
In retrospect, that 1987 high looks like a bargain 33 years later...
“Remember, my son, that any man who is a bear on the future of this country will go broke.” JP Morgan, 1908.
“Remember, my son, that any man who is a bear on the future of this country will go broke.” JP Morgan, 1908.
As an investor, you should be mentally prepared for turbulence. You should be prepared for volatility, bear markets, bull markets, wars, depressions, recessions, upheavals..
Your job is to keep investing, through thick or thin.
Patience is very important for investing success
Your job is to keep investing, through thick or thin.
Patience is very important for investing success
There are many ways to succeed in markets. But all involves working on your temperament. h/t @dmuthuk
It is fun to watch the Nightly Business Report from Black Monday, October 19 1987:
It just happens that October 16th happens to be a Friday in 1987 and 2020
October 19th happens to be a Monday in 1987 and 2020.
Just an observation, not a prediction of course.
October 19th happens to be a Monday in 1987 and 2020.
Just an observation, not a prediction of course.
