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Showing posts from October, 2007

Blast from the Past

Two unrelated cases happened over the past week that compelled me to pen down my thoughts on them. Both are, of course related to the markets, but they aren't related to one another. The common tether that binds them is investor psychology. Read on...

Black Monday
October 19, 2007 marked the 20th anniversary of the demonic 'Black Monday' crash that shook the markets exactly 2 decades ago. On Monday, October 19, 1987, the Dow remarkably dropped over 20% in one day's trade. Most global equity markets suffered declines of over 20% by the end of that fateful October month.
Experts continue to argue about the possible causes behind the collapse. Program trading, bulk selling, overpricing, illiquidity were all put forth as reasons behind the event. In this section, I will write about human psychology 2 decades since. Maybe there was some pattern somewhere?
The table shows 1-day price change for selected major world indices on three specific dates, beginning with 'Black Mond…