Black Monday 1987

[Sunset]

I sold all my company stock to buy a Corvette the week before, sometimes it pays to be a spendthrift [emoji2]

I worked with a fellow who sold all his or at least a lot of his investments, so he could buy a $300,000 home just before the big tech bubble burst. He was happy

 

[Sue J]

We were 32 years old with a 3 year old and a 9 month old. We had savings in CDs and savings accounts and no investments in the stock market.

I had a family member whose husband was off on a business trip to Japan. He called home in a horrible panic because he had bought a lot of stock "on margin". The wife didn't know about any of it, or maybe she just didn't pay attention. He had borrowed on the house or maybe a personal loan or something and this put them in deep trouble. He thought he was smart, she was happy to be kept in the dark and trusted him to "handle everything". This was the beginning of the end of their marriage which lasted a few more years in misery.

At the time I had to look up "on margin" to understand what she was talking about.

 

[Midpack]

I remember, I was one of the lucky ones. I had nothing in the market, recognized it as a buying opportunity and went all in on Oct 20th - $20K, it was all we had. Had a three-bagger within 3-4 months. It’s been a great ride ever since.

 

[Texas Proud]

I have money in the market, but not much compared to today...

The thing that was more interesting is how fast it dropped at the end of the day... I was on the phone with a friend who was watching some TV news coverage of the decline and he was giving me updates as we spoke... I think it dropped 150 to 200 points while he was talking...


I changed nothing... I still had money taken from my paycheck and invested 100% into stocks...

 

[audreyh1]

I was clueless and busy working.

 

[MRG]

I remember stories of people trying to sell but couldn't get through to their brokers by phone. Some got through but brokers were unable to execute the orders esp for individual investors. It could have been a bigger drop.

Those were true stories. Many of the back end systems that processed redemptions were unavailable most of the day.

Yes if everything went through or if individual investors had internet capabilities to redeem their funds it could have been much worse.

I learned a new parameter that day IEALIMIT.

 

[kevdude]

I was about six months into my first job out of college - working at an S & L in southern CA after receiving my bachelor's degree in Finance. A good friend of mine was the computer programmer for a commodities trader that won an annual contest that year for turning $10,000 into over $1million (real money, not hypothetical) that year, most of it during that week. He called me multiple times during the day, very excited, updating me on what was going on and how much much they were up.

The employer had previously written a book titled, "How I Made One Million Dollars Trading Commodities Last Year". After the week of Black Monday, they put a banner up in his office changing the title to read "In One Week".

 

[IMATERP]

I was at Laural Park race course that afternoon sucking down Vodka and placing all my hard earned dollars on Lucky Ducky to win in the 7th. Good thing he lost as my gambling "bottom" came sooner.

I bought my first stock (Boeing) a year or two later and was astounded by the fact that someone paid me (dividends) to own shares of a company.

Michael

 

[HGTVfan]

I remember it well. Not that I had any money in the market other than a few years of 401k investments.

I was working in D.C., running a conference on that day so locked in a hotel with no media. As our speakers arrived throughout the day they would give us updates on the market crash. A friend and former co-worker was supposed to be our last speaker. He and a colleague at the WSJ had written a book on the 1986 tax law. When he called to say he had to cancel because he was writing a story for the front page of the Journal the next day, I was irked. What, you’re cancelling on me! (He sent his co-author so it all worked out.) Only that evening did I realize the magnitude of what had happened.

 

[athena53]

I was 32, so still
Working and not a lot in the market. Stayed the course, kept saving and now it's a minor blip on my net worth chart. Lesson learned.

 

[foxfirev5]

At age 31 it was the first single day 5 figure loss I experienced. There was no panic since I had a good job and with DW and three kids retirement was far on the back burner

 

[Badbreath]

I didn't even know it happened. I was 3 years in on my first job had a small amount in a 401k and had a dead line at work.

 

[braumeister]

I had nothing in the market at the time, but I was a huge fan of Apple computers and bought its stock. One of the best investments I ever made.

In later years, I've done the same -- bought AAPL whenever it was completely beaten down and people were predicting its death. All excellent investments.

 

[Turboslacker]

I remember telling my friends that the market was too high and sold all our stock the Thursday before. A couple weeks later my Mother observed that Exxon was a bargain. Bought some. Stood pat until it comprised over half our investments (maybe 5 years) then sold and purchased Magellan.

Damn! Solid moves in the marketplace. Nice

 

[Turboslacker]

I recall it vividly. Was a Sophomore in college and learned about it watching Peter Jennings ABC nightly news. No investments so no skin in the game but followed the stock market since 1980.

 

[Travelfreek]

I was 32 and my husband had his first engineering job 3 months out of college. We had just put down $1000 on a brand new house under construction. We didn't have anything in the market at that time so it didn't affect us. My Dad, however, was a complete wreck. He had lived through the depression (he was born in 1912) so he had a huge fear that things were going to fall apart. But, we went forward on the house anyway and made money on it (36% increase in less than 5 years time). It's amusing to think back on the fact that mortgage rates at that time were about 10%.

 

[Ronstar]

I started my 401k in 1986, and lost a lot of it on Black Monday. RE looked bleak at that time.

 

[gcgang]

Alan Abelson on the Crash of 1987 - cetusnews

Above reprint of Barrns Alan Abelson column on the '87 Crash. Too funny the NY real estate mogul he blasts.

As I remember, I sold everything in late September, and bought it back for pennies on the dollar in early November. But then again, my memory ain't what it used to be.

 

[scrabbler1]

I was 2 years out of college and working full-time. I was not allowed to begin contributing to my 401k until 1986, so I was in it for only 1 year by October 1987. Back then, our 401k options were very few. We had only 2 funds, a Stable Value fund and an S&P500 fund and could choose multiples of 25% to invest in each one. We also had a 50% company match up to 6% of salary.


I had been saving up to pay off my high-interest student loans earlier that year, and was saving up for an eventual down payment on a co-op apartment, so I was contributing only 3% of salary. Together, I had only $365 in the S&P 500 fund so I lost very little in actual dollars, about $64 according to the quarterly data I stored. I made it back by the following June.

 

[shortstop14]

Imagine the poor folks who trusted ED and received a phone call about the market tanking. Many blindly followed bad advice.

I didn't have much invested in my IRA at that point, but I did get the professional advice during the crash to sell and move into something else. Don't remember if I moved into or out of a utility fund. I just remember that it didn't go well, and that it was the point I learned a healthy skepticism about financial advisors which served me well in the future. From that date I invested a lot more time in learning investment basics so that I could handle my own finances.

 

[audreyh1]

I had nothing in the market at the time, but I was a huge fan of Apple computers and bought its stock. One of the best investments I ever made.

In later years, I've done the same -- bought AAPL whenever it was completely beaten down and people were predicting its death. All excellent investments.

I'll say! If you kept hold of much of it, it's done very well for you!

 

[braumeister]

I'll say! If you kept hold of much of it, it's done very well for you!

Alas, no.

I'm basically chicken, so when something gets high enough it makes me nervous and I sell it. So I've always done very well with Apple, but nowhere near as well as if I simply held on to it. Buy low, sell when it gets sort of high, then buy again when it gets low again.

OTOH, my caution has saved me from some disasters. I actually made money on Enron, Seadrill, and a couple of others simply because I dumped them before they dumped on me.

 

[ChiliPepr]

I'm sure several forum members remember October 19, 1987, aka Black Monday.

I was 23, and it was one week after I accepted a job in the Financial Industry, and one week before I started in the Financial Industry.

I spent a week listening to my boss trying to convince me to back out of my acceptance, glad I did not because moving into finance was the best thing I could have done for my FIRE potential.

 

[jollystomper]

We had no investments at that time other than megacorp stock and megacorp 401K.

On the stock we lucked out as we had just bought a house within the previous year, and sold a lot of the stock for the down payment. Seeing the rest of the stock fall 25% in one day was disconcerting to say the least.

I distinctly remember many on my office panicking at the hit their 401Ks took, and vowing to either move out of the 401K or out of the stock component of the 401K. Fortunately I realized that this was money I was not counting on for another 30 years, and that at 29 I still had many career and work opportunities. so I kept it 100% invested in equities.

I still have my 401K statement for that year. Even with Black Monday, with my contributions and the market rise after black Monday my 401K balance was still up about 33% over 1986.

 

[Rianne]

Selling would have been the worst decision of our life. Just like in 2008. We're a capitalist society. What wealthy person or corporation or bank let the stock market be doomed. We learned so much from the crash in 1920 something. And money unlike politics is something you never forget.