Sighting: 20th Anniversary of Black Monday

In October, Wall Street celebrated the passing of 20 years without a recurrence of a Crash of '87 type scenario. In today's Dow terms, it would be the equivalent of a 3,100+ point drop. In a single day. As one of the old timers who was managing money in October 1987, I read with interest the many commentaries on the Black Monday crash which appeared. Here's one from Barron's:

"It's fitting that as the 20th anniversary of the ferocious 1987 stock-market crash approaches, most major U.S. equity averages are at or near record levels, and many markets in the developing world are at boiling points.... The prevailing view on Wall Street is that the monumental drop on Oct. 19, 1987, when the Dow Jones Industrial Average plunged 508 points—22.6%—on then-record volume, won't be repeated. There's good reason for the widespread optimism. But, then again, Wall Street seemingly is always optimistic until something goes terribly wrong. Not that the bulls don't have some good arguments. The Dow's drop on Oct. 19, 1987, was unprecedented, and hasn't come close to being equaled since then. The largest percentage decline in the current decade was 7.1% on Sept. 17, 2001, and the biggest drop in the past two years was 3.3% on Feb. 27, 2007. Even the historic 1929 crash, while deeper, broader and longer-lasting, didn't produce a one-day downdraft as vicious as 1987 did....

In fact, to the extent that Wall Street looks back at that disastrous fall day in 1987, it's probably to scoff with amazement that investors were foolish enough to dump stocks on what turned out to be one of the great buying opportunities. By the end of that year, the Dow had regained 11 percentage points of its loss. And by Dec. 31, 1988, the DJIA was almost 25% higher than it was at the end of Black Monday."

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