Stock market crash 1929

From 1921 to 1929, the Dow Jones rocketed from around 65 to 380 points. Millionaires were created instantly. Most investors never even thought a crash was possible. To them, the stock market “always went up”.

On September 3rd, the Dow reached its top for the time - 380 points.

Within a month, the index gave up value in a what looked a smooth correction.

October 16th, 1929 a professor (Irving Fisher) addressed: „ ...it looks like that the stock market reached a firm steady level ...“. The Dow pointed 336 points.

Couple days later, the stock market crashed.

By October 24th, 1929 (Black Thursday), the Dow was down 20%. The market was up slightly on Friday, October 25th. This gave of hope to investors and traders:

„Sanity ruled on the Stock Exchange Friday in place of the hysteria of Thursday ...

In its place was a decidedly improved sentiment; the atmosphere had been cleared and a period of normalcy again reigned ...

Sentiment was extremely cautious. While most observers believed the worst of the sharp break was over , they did not look for any immediate recovery ... It is the general view that nothing more than backing and filling movements can be expected. Then if conditions are favorable, the groundwork can be laid for a new advance later on.“

- Wall Street Journal, October 26th, 1929

The normalcy did not last long. The stock market broke severely on Monday, October 28th. The Dow closed the day down over -13% from its open price and over -15% to its previous close. The headline in the Wall Street Journal seemed to express some hope:

 „MARKET ORDERLY IN RECORD DROP

Continued Operation of Banker's Pool Prevents Repetition of Thursday's Hysteria.“

- Wall Street Journal, October 29th, 1929

On Tuesday, October 29th (Black Tuesday), the market feel another -11.5% (over -13% to previous close). Once again, the Journal tried its best to be encouraging:

„STOCKS STEADY AFTER DECLINE

Bankers State Support Continues- Spokesman Expresses View Hysteria is Passing.“

- Wall Street Journal, October 30th, 1929

28th and 29th of October 1929, was later named the black Monday and Tuesday.

The Dow Jones Index lost in 2 days a forth (-25%) of its value - after a five year rise and fifth fold in value.

By the market close on October 29th, the Dow had lost 40% since its market high on September 3rd. The market bounce that followed did not last long. By early November the Dow had broken down to new lows.

The descend of the market stopped in July 1932. The index read 41 points - a value of 11% (or loss of -89%) of its original high of the 3rd September 1929 when it read 380 points.

It should take over 25 years, to reached the Dow Jones (DJIA) index the same point value again - all the way to the year 1954.

„Anyone who bought stocks in mid 1929 and held onto them saw most of his adult life pass by before getting back to even.“

The 1929 stock market crash was beneficial for some, however. Mr. Jesse Livermore correctly forecasted the economic crisis and shorted. He made over 100 million dollars. Mr. Joseph Kennedy, John F. Kennedy’s father, sold before the 1929 stock market crash and kept millions in profit. Livermore and Kennedy were individuals are known as the “smart money”, who profit regardless if the market is skyrocketing or plummeting.

The stock market crash of 1929 launched the Great Depression. The Depression was the time from October 1929 to the mid 1930’s. Mass poverty occurred then, as many workers lost their jobs and were forced to live in shanty towns. Former millionaire businessmen were reduced to selling apples and pencils on street corners. One third of Americans were below the poverty line in the Great Depression.

... please see below the illustrated charts for a crash overview scenery.

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