Lessons from 1929 stock market crash

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Although the present financial meltdown is quite different from that of 1929, it serves a useful purpose to revisit the 1929 stock market crash to at least pick up on the investment lessons offered by that situation. This is especially true as financial memory only seems to last a few years before analysts, investors, bankers and regulators again fall victim to greed.

This post is a compilation of eight 1929 videos, which will make for good weekend viewing, especially when reflecting upon the calamitous past two weeks.

We kick off with a five-part movie produced by Middlemarch Films, entitled “1929 Stock Market Crash”.

Click here or on the image below for Part 1 of the video clip.

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Click the links for: Part 2, Part 3, Part 4 and Part 5.

And here are some more fascinating 1929 clips by Fox MovieTone News, courtesy of Barry Ritholtz (The Big Picture).

Firstly, “The Country is Fundamentally Sound; ‘Don’t Panic, Stocks are Safe!’”. Economist Professor Irving Fischer explains that the stock market crashed due to high expectations – not high stock prices. Too many speculators were playing the stocks with borrowed money, resulting in a run on the banks. 80 years later, the banks are speculating with borrowed money and investors are running away from them.

Click here or on the image below to view the video clip.

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Secondly, “Did You Ever Lose a Million Bucks?” Take a tip from Margaret Shotwell who dispenses advice after losing 1 million dollars in the Wall Street stock market crash on Black Friday, October 28, 1929. Her only possessions are her piano and chinchilla fur.

Click here or on the image below to view the video clip.

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Lastly, “Regulation Will Destroy Capitalism”. Richard Whitney, President of the New York Stock Exchange, warns of the risks both to country and to capitalism posed by government regulators in the form of the National Securities Exchange Act. This was almost four full years before he was sent to Sing Sing Prison for embezzlement.

Click here or on the image below to view the video clip.

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Sources: Source: YouTube, November 30, 2007 and Barry Ritholtz, The Big Picture, October 13, 2008.

 

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2 comments to Lessons from 1929 stock market crash

  • Bill

    Imagine looking at the market & not seeing any bids? Has anyone observed some sloppy market action? I’ve seen 8 cent spreads on some widely traded ETFs this week.

  • Meg

    Thank you for the video clips. I especially liked the 1929 Stock Market Crash, the mix of personal and history, the news footage, the two old guys who had lived through it laughing, the children splashing in the swimming pool at the beginning, the balloons and streamers at the end. It really brought the taste of that time to me.

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