On the 29th anniversary of Black Monday* this week, we opened it up to the LPL Research team and asked what they remembered from this fateful day. Here’s what they had to say:
Jeff Buchbinder – “I was in high school and remember my broker (who is also my father) being overseas at the time—conveniently missing the excitement back at the office. I’ll never forgot what he told me after the crash, which was stay patient, stocks are too cheap to sell, and we’ll get it back before too long. Well, sure enough, in less than a year his clients’ accounts were back to pre-crash levels. A good early lesson in investing for the long term.”
John Canally – “I was working as a Research Assistant at the Congressional Budget Office in Washington, DC. We had one Telerate or a Quotron machine in the office, and many people gathered around it all day long. My dad worked at a regional brokerage house at the time, and he was at work until very late that night (1 AM) catching up on all the paperwork the day brought. From a macro standpoint, there is a great story about that day. The story goes that Greenspan – who had just taken over at the Fed in August – had traveled to Dallas the day before for a speech. He left in the afternoon when the market was down, but hadn’t crashed yet. Later that evening a senior officer from the Dallas Fed told him the market had closed down “five-oh-eight.” He thought the Dow was down five points. Of course, it was actually down 508 points or 22%.”
Matthew Peterson – “On the day of the October 1987 market crash, I was unaware of what happened and was surely going about my business doing whatever I did as a college sophomore. I recall walking through the Student Union and going past the lounge with the big TVs in them and seeing the story on the 6:30 network news. I think of how much our lives have changed. In 1987, most of us got our news from a scheduled televised newscast. There was no immediate feedback loop, no social media commentary and the unavoidable political spin that now shapes everything. I would have had to find a payphone to call home to talk to my parents about it; I probably didn’t. Even just 20 years ago, things were much slower than they are today. Such an event today would have very different ramifications. We all have the ability to say so much more, so quickly. Whether we actually have more to say remains a question.”
Ryan Detrick – “I had no idea this even happened, as in the third grade my biggest worry was if we were playing basketball or football at recess.”
For more color on whether another Black Monday could happen in 2016, be sure to read yesterday’s blog, “Is Another Black Monday Coming?”
*Black Monday refers to the global stock market crash of Monday, October 19, 1987.
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