When Wall Street Laid One Of Its Many Eggs …

OCTOBER. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February.

– Mark Twain, 1894
“Puddin’ Head Wilson”

Was Samuel Clemens, AKA Mark Twain, a seer, as he sometimes alleged? Did he have a clairvoyant vision of “Black Tuesday,” 29 October 1929? Though Twain wrote that sage observation 35 years before that grim day, it has proven notably true on more than one occasion. (Of course, that “prediction” is obviously going to be inevitably “right,” but it is interesting that Twain starts the litany with October!)

On “Black Tuesday,” the Dow Jones industrial average tumbled 12 percent after losing 13 percent the previous day. October’s historic plunges also include that memorable but non-fatal crash on 19 October 1987, known as Black Monday.

Though the Great Stock Market Crash of 1929 was not the only reason for the Great Depression that burdened the entire decade of the 1930’s, it surely contributed to it, and it represents a single event that conveniently serves as the identifiable start of the depression.

After that terrible day in 1929, the market was more carefully governed and financial institutions were more closely watched to avoid the wild speculation and careless dealing that had been rampant during the unprecedented boom years of the 1920’s. Of course, any boom invites a relaxing of strictures – who wants to spoil a good thing? – and so the recent boom of the 1990’s saw some surprising shenannigans at some venerable and respectable institutions. Yet, though the economy today is far from booming, at least we also are not quite in that Great Depression …

But given these repeating patterns, one must surely wonder: can humans ever learn from the past?

Jamie Rawson
Pasadena, California
29 October 2011

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