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Tuesday, September 30, 2008

Remember, as you get ready to drop the hammer...

...during the Depression it was not the initial crash where people lost the most money. It was in buying stocks that they thought were a bargain before the market tanked harder. (Thanks to ECU ECON Hall of Fame Alumnus Phil McPherson for pointing this out.)

Oh and hey, I forgot to mention, tomorrow is October 1st. So what right? OK. But what month did the biggest stock market and financial calamities happen in 1907, 1929, and 1987. I know, it is psycho-babble like full moons and increases in crime (ask your favorite policeman about this, it happens). And one more for the road...when was the last time we had a consecutive housing bust followed by a stock market meltdown. Right you are, the US in the 1920s and Japan in the 1990s.

Have a nice day.


Derek Pszenny said...

Mnth year S&P500 return
Oct 2007 1.48
2006 3.15
2005 -1.17
2004 1.4
2003 5.5
2002 8.6
2001 1.8
2000 -.4
1999 6.25
1998 8.1

Derek Pszenny said...

The crash on Monday was huge in point terms but is only about 1/3 of the 1987 crash in percentage terms. According to Mark Hulbert of Marketwatch ther have been 16 other occasions since the advent of the Dow (1896)that the Dow HAS Had a percentage loss that was greater than Monday's. This works out to be about every seven years. And how long has it been since the last big correction? How about 7 years almost to the day since Sept 17, 2001.