Posted on 09/29/2007 12:32:58 PM PDT by vietvet67
I realize I'm jumping the gun a little here, but do you realize that the 20th anniversary of the Crash of '87 is right around the corner?
I'll never forget that day. It was Monday, Oct. 19, and I was in Boston, working on a story about Fidelity Investments for Esquire magazine. The article was the brainchild of Esquire's then-editor, Lee Eisenberg, who had become fixated on America's obsession with the bull market that had begun in 1982.
There is something new going on here, I remember Lee saying, and he was right. Over the previous 15 years, an enormous transformation had taken place. With the rise of discount brokers, the elimination of fixed commissions, the introduction of individual retirement accounts, and a hundred other things, the stock market had become democratized. There had been bull markets before, but this was the first in which a broad swatch of the great middle class had its savings in the stock market. We had become investors, and we were all going to get rich.
Or were we?
There was an overwhelming sense of foreboding that Monday morning. After a summer of tremendous gains, the Dow Jones industrial average had dropped 11 percent the week before - its worst week since World War II. All weekend long, the Fidelity call centers had been flooded with calls from panicky investors.
When the bell finally rang on Monday, it was worse that anyone could have imagined. The market started spiraling downward and never really stopped; by the time it closed, the Standard & Poor's 500 had lost 23 percent, making it the single worst day in the history of the American stock market.
(Excerpt) Read more at iht.com ...
Talking about the past in markets doesn’t help you in the future. But it will give you something to write about and spin
But, by Dec 1, the port was almost back to normal and by the end of Jan, 1988, it was ahead of the pre-crash value.
Part of that gain came from loading up on more mutual funds in the weeks after the crash. I figured, how much worse can it get?
“But do we do that? Hardly. When it comes to investing, most of us simply don’t act rationally. Individual investors spend hours on chat boards, where the herd mentality is fiercest. They can’t bring themselves to sell losing positions, even when the stock is still going down. They bet everything on one or two high-risk stocks. I do not exempt myself from this behavior: I can remember, a decade after the Crash of ‘87, loading up on tech stocks during the Internet bubble, even as I was writing article after article about how the bubble couldn’t possible last.”
Stop loss provisions are your friend :-)
And now that we're hearing Democrat calls for an end to the mortgage interest tax break, it could get a lot worse.
“I remember the crash of 1987. It stomped my portfolio, mostly no-load mutual funds back then, very hard.
But, by Dec 1, the port was almost back to normal and by the end of Jan, 1988, it was ahead of the pre-crash value.”
I did very well with Magellan.......miss you, Mr. Lynch.
“And now that we’re hearing Democrat calls for an end to the mortgage interest tax break,”
Dems are quite mad.........1929 would repeat itself.
Are you talking about the mindless herd mentality of the mainstream media?
One guy plagiarizes another at each subsequent newspaper with the only modification being a more inflammatory and outrageous headline — repeated so often as to sound like the conventional wisdom.
I wish they’d just give every one of them a Pulitzer so that they all don’t think they have to lie, cheat and steal to win one. And not doing so, falling into a hateful drunken stupor each night wondering what they have to do to get their boss’s job — while the whole industry is imploding, causing each of them to rip out each other’s throats not to be the next person laid/bought off/out.
So I guess for those still working in the mainstream media, it does seem like the great crash/depression approaching all over again. But it’s just the normal rotation from dying industries to the newly emerging. They too could be part of the solution instead of being the last vestiges of the problem.
“I did very well with Magellan”
Me too. Peter was THE MAN!
Shocking isn’t it. Makes you feel bad for paying for any of it. Create new thought please, beyond that what are you good for?
I try and stay defensive with my portfolio.
Yeah, I may not make as much as somebody else in a given quarter. But overall most times I'll best them.
To that end I dumped all my real estate stuff about three years ago when I first heard of subprime lending. I heard an ad on the radio from Quicken Loans about the "no interest" loan and that clinched it for me.
No way you can do stuff like that and stay liquid. And they didn't.
They ought to pass a law that newspapers can’t publish unless they have something intelligent (new) to say.
That one rule would save a forest a day in their campaign to prevent global warming (degradation).
pfl
I don’t know about applying the rule of law, the open market is dealing effectively with them right now. Sucks to be them
If they weren’t in journalism, and overleveraged in real estate, they’d find some other way to lose.
Haven't heard that. IF true it will be a slaughter in 08.
Peter Lynch - hands down the best money manager in world history.
cORRECT!
Peter was a quiet intelligent insightful man
“Haven’t heard that. IF true it will be a slaughter in 08”
Wanna buy a 5 million dollar home in Beverly Hills for 900,000??
lol!
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