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1987 Revisited
October 17, 1997


This Feature

1987 Crash Timeline
In Defense of Gen X
"The Sky is Falling"
  Mentality
Portfolio Insurance Failure
Crashes and the Media
Communion of Bears Board
Communion of Bulls Board

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Sunday, October 19, 1997, marks the ten-year anniversary of the 1987 market crash. It remains the biggest one-day loss in the 101-year history of the Dow Jones Industrial Average. Unless you've been living under a rock for the past two weeks, you've undoubtedly been bombarded with Wall Street gooroos recounting their crash tales. "My wife had a premonition on Thursday and my dog wouldn't go outside. I sold the next day." "I called the crash of '87, but I've totally missed the biggest bull market in Wall Street history."

Reading these harem scarem stories is enough to drive some investors right out of the market and into savings bonds. The fact is, such point movements in the Dow are inevitable, but they are few and far between. As Foolish investors, we should be holding quality companies for the long term, doing our research, and not rolling the dice with next month's rent money.

Did the Fool call the crash? Um... we weren't around. But we remember it none the less. If you're interested in the history behind the 1987 crash, Randy Befumo has put together an interesting timeline of 1987 that you won't want to miss. Dale Wettlaufer defends Gen X from the "you've never seen a crash" crowd. David Forrest talks about the psychology of crashes, and Alex Schay discusses the use of portfolio insurance that failed for most investors in 1987. We've also included Jeff Fischer's Fool Portfolio recap on stock market crashes and the media. Okay Fools, hang up the phone and tell your broker to cancel that sell order. See what The Fool has to say about the '87 crash and then do your homework.

 

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