I'm going to do a two part series about the bear market and the following great Depression. First a write up and then some nice videoclips of the time with more information and showing the mood back then! The roaring 20s were a time of great prosperity and with many technological developments. Cars for the masses, radios, electricity for the common households.

People bought vacuum cleaners and washing machines, movies with audio became the standard. Of course the stock market also rose. Speculation became widespread as the good times rolled. Finally everybody owned stocks, not only entrepreneurs, directors, employees, but also nurses who received stock tips from their patients, or taxi drivers, or window cleaners etc. It was also thought that because there was the prohibition, meaning alcohol was banned, people were sober in their thoughts and judgements.

People no longer went drinking in bars but increased their life standards and bought stocks. Banks gave credits to buy stocks on margin, no problem as stocks would rise forever. It was a new era, as everyone thought.

The Stock Market Crash of

The ratio was So since the last bear market the Dow Jones Industrials rose 5 fold to on September 3, At the top the stock market had a PE of above This is like at the top in when it also traded above At the top in October it had a much more reasonable PE of The market then again started to fall and accelerated into what is known as the Crash of The bear market There were no real news that caused the crash. On October 24,famous as Black Thursday, the stock market fell On October 28the so called Black Monday, the stock market fell In total the stock market lost This was the crash.

However stocks continued to fall until November 13 when they reached a low at After that the market recovered until April when it reached From then on it was a steady downside zigzag, which made people think every time that the bear market was over and lured them in again.

The Dow Jones reached its final low in July at And that is only the stock market average. Many blue chip stocks of the time went to zero. It took the market until to reach the nominal top of again. Millionaires became beggars, family fortunes were destroyed, the small investor lost everything.

Those who could afford it shot themselves, others hanged themselves and some jumped out of the window of a skyscraper. Of course there were some who made a fortune by selling short like Jesse Livermore or Bernard Baruch. But enough words, here a nice 20 min. Part 1 4 min Part 2 3 min Part 3 4: People no longer went drinking in bars but increased their life standards and bought stocks".

LOL, did people seriously think that? I never heard that about the 20's before. Claiming all the disposable income that used to go into liquor went into stocks?

Makes me wonder how much the world markets would go up if crack, heroin, crystal meth etc disappered tomorrow. My favorite historical ancedote from the 's is the Kellog-Briand Pact which had the main purported purspose of outlawing war. Great Idea in theory, virtually impossible to achieve in practice. Man no wonder the market crashed. You know my great aunt who was in her twenties during the crash always blamed Roosevelt more than Hoover, She never invested stocks her entire life but she always felt strongly that all the New Deal programs of the 's delayed the recovery or as she put it "the cure was worse the cancer" She was probably the only person I knew from her generation that actually thought Hoover was a good president.

Some of which he held onto the end of his life, never selling a share. I think his biggest winners were National City and some phone company that eventually became Alltel and apparently now also Windstream today. Investors mortgaged their homes, and foolishly invested their life savings in hot stocks, such as Ford and RCA. To the average investor, stocks were a sure thing. Few people actually studied the fundamentals of the companies they invested in. Thousands of fraudulent companies were formed to hoodwink unsavvy investors.

Most investors never even thought a crash was possible. May we not be the generation destined to repeat history as a consequence of ignoring it. The ignoring has already been done, by the banks and the greedy minds that thought up the OTC derivatives ponzi scheme.

Perhaps I should wait until your Part II to link this article, but I don't want to forget For setting the stage for how we came full circle to repeat the mistakes of the late 20s, the Glass-Steagall Act must be considered as part of that process.

Tastylunch, I will look forward to a post about your grandfather's investment ledger some day too My great-grandfather was buying real estate towards the end of the depression, picking up large Victorian houses and waterfront property for peanuts. I wish I had some kind of ledger to indicate how he managed to have cash on hand at the end of the depression to make such purchases, currency converter rubles to dollars considering he was a 1st-generation immigrant from Armenia who fled the genocide there without penny to his name.

Take a look at: Where does the perfect fit in? Sorry about the teasing, I am coming off of a sardine can flight with NWA. Amazingly they filled the flight up from DET to LAX and the three biggest guys were all in the same row.

Cami- I read somewhere about the prohibition and clarity. I really laugh at that, because people were still drinking. They just were not able to in public venues. I still do some of my best thinking while I am sober and some when I am social to. This is solvay stock option management sprl an interesting topic to look at with your take on the 90 90 theory.

I am finding myself baffled by what I read in the NYtimes and the fool. One consensus is that there is going to be an oil bubble coming. AnomlLee had a couple of graphs on the subject, but I couldn't really pick up on the analysis. Only problem is I stock market in the early 1920s not right very much.

Could the possible recession be harder, because of the other countries feeling the heat as well. People are saying India and China are hot, but these countries have too large of a population to keep the fundamentals from being jacked. Somehow I find myself being more and more optomistic about the market even though I read alstry's blog and feel like my head is going to explode.

I find it funny that the 19th ammendment ended a downturn and started a run-uo with radio media. Which brings me to my final point. I don't really like this for my positions.

B I never know when to truly exit a company on runups. I have my spots usually, but lately the market makes me want to pull too early. I fight this often. C Too many investors are in one day and out the next. This leaves an unstable market in its path. The short term profit takers are killing the long term investors, but they are paying handsomely for it in the taxes. D Lastly, I find myself with 4 positions now, but I would like to have more like If others are doing this, then somewhere companies are being left out.

I read an article today about accountants being too leniant on the books and one way to remedy this, would be to have a term for accountants. This makes sense to me sense it would be a checks and balances if you had another companies accountant watching your footsteps. Thanks all for your comments! Tasty - I took it from the book Irrational Exuberance by Robert Schiller.

I see that the pact was signed by Germany and Japan. They broke the law! Of course nobody wanted to listen. Interesting read early exercise stock options your relatives.

Zygnoda - did home prices rise 5 fold in ten years? Nevertheless there was a great deal of speculation. Unlike in the s the Fed and the government are not going to "let the market do its thing".

They will smoothen the impact of the housing correction. Sinchiruna - We had the Nasdaq crash were internet millionaires became normal citizens again. Greenspan helped to cushion the crash, although a new bubble emerged. Thanks for your pbs link, very interesting. It seems they went to clubs, so called "speakeasy's" and thus made people like Al Capone rich.

About stock diversification, I think stocks are too little is better and from different sectors.

Error (Forbidden)

So if the oil sector does correct, you will still have sectors that do well, and maybe quite well, as gasoline prices would come down. You should also tell yourself, when you want to sell.

And some invest for several years and don't care about short term price movements. Alstry's blog is like a tabloid. I'm probably years early as were people who raised flags about the real estate markets in late andbut there is a growing shift in the way we provide energy.

Lee, the videos are still available. Just reload the page. For some reason embeded youtube clips don't work anymore after a while. Something like 30 minutes or an hour. Anoma- I to think there is a bubble in the making, for Oil.

Let us think about this for a second. We have found new ways to produce the oil, but it costs more to do it. The demand is there, so essentially we have raised the price per barrel on the fact that it costs more to produce now. If that is the case, then we have subsequently done away with the idea of a bubble. Demand now has to go down for the bubble to pop.

I don't think I could put a date on it, so therefore your longterm thesis will most likely be in line. When do we realise that we have an alternative that we can use that costs less and doesn't cause mayhem with our food prices. Cami- I meant to say that I wished I had right now. In a market that I am confortable with I will sometimes double the latter number. I don't just believe in holding 2 companies in a sector for diversification, nor do I just believe in holding companies that complement each other.

Therefore, my diversified classification is a little bit more involved than some others and I end up with fewer picks than others. I only hit 30 when I know of a specific sector bull run. Yeah, oil is in it, but I have some issues with just loading up on oil and gold. As we drive the price up for oil, we ultimately hurt ourselves and others in the process.

I have been watching the oil sands projects for a while and I have to admit that the process is a little intimidating if you are a environmentalist. The carbon footprint is much larger when we get the oil this way, and you most likely understand how I feel about carbon and emissions.

I most likely lose money because of my ethical standard, but that is my own right and I want to feel good about what I am putting my money towards. As for alstrys blog, I usually like thought provoking commentary. Whether it be humor or stupidity.

I can hold my own with both. I don't mind trying to read his blogs, but most the time I get through the first paragraph and just start cracking up and then move on. I only wish that my thoughts were more precise when writing. I can't get everything out while typing, so I mess up and miss out on a ton of stuff that I would like to say. Just out of curiousity, what is your native language and how many languages do you know? The oil sands projects will provide us with the majority of our oil in the years to come.

If it is going to cost more and be more pollutive, then I do not want to support it. The same goes to shale oil. I would rather use the alternative. Not ethanol, but hemp. Lets get the birds singing again. I am just starting to hear them and I love it. French is the language I learned as a child and talk with my parents, and I also learned Italian at school.

I don't speak it anymore though, but I could still watch a movie. That is really cool that you know all those languages. That is really impressive, I am glad I asked. Premium Advice MY SERVICES None OTHER SERVICES. MENU Latest Stock Picks Stocks Scorecards News Investing News Fool Podcasts Guides Investing Retirement Personal Finance Motley Fool Answers Find a Broker Community Discussion Boards CAPS CAPS CAPS Home My CAPS Stocks Screener Players Blogs Top Tens Tags Contests Contact Us Help More About Help Settings My Fool My Fool My Profile My Watchlist My Scorecard My Boards My CAPS My Reports My Subscriptions My Settings Help Fool Answers Contact Us Login Search.

The roaring s and the Crash Recs People no longer went drinking in bars but increased their life standards and bought stocks" LOL, did people seriously think that? Report this comment 3 On April 20, at Report this comment 4 On April 20, at 1: I will be looking forward to your second post. Best of Luck Fools. Report this comment 6 On April 20, at Report this comment 7 On April 21, at 1: All you videos are no longer available.

Report this comment 8 On April 21, at 2: However the chart of the bear market has disapeared. You can see it here: Report this comment 10 On April 22, at 3: Report this comment 11 On April 23, at Blog Home Blog Archive August 1 February 1 September 2 January 4 July 7 June 4 May 4 April 5 March 4 February 6 January 1 December 5 November 6 October 3 September 4 August 4 July 1 June 3 May 6 April 6 March 7 February 11 January 12 December 5 November 9 October 7 September 5 August 7 July 9 June 6 May 9 April 7 March 8 February 4.

Newest Blog Posts View More. Apple's Next Smart Device Warning, it may shock you The secret is out Show me Apple's new smart gizmo!