Author Topic: Interesting historical WSW clips  (Read 2137 times)

frugalecon

  • Pencil Stache
  • ****
  • Posts: 547
Interesting historical WSW clips
« on: July 29, 2014, 04:26:36 PM »
I recently ran across clips on Youtube from the program "Wall Street Week with Louis Rukeyser," which most of you are probably too young to remember. Thet aired around the 1987 crash. I think they interesting historically, especially given chatter about market levels. You can find them here:

Pre-crash: www.youtube.com/watch?v=2MyToTwag34

Post-crash: www.youtube.com/watch?v=XFn1G2goDQw


ect

  • 5 O'Clock Shadow
  • *
  • Posts: 29
Re: Interesting historical WSW clips
« Reply #1 on: July 29, 2014, 09:06:43 PM »
Too bad it was only a weekly (Friday night) show, because things had calmed down considerably by the time of the post-crash episode.

Here's the 1987 timeline:

Fri Oct 2 - high for the S&P is 329
Fri Oct 16 - S&P closes at 283, down 14% for the 2-week period
Fri Oct 16 - pre-crash episode
Mon Oct 19 - S&P closes on the low tick at 225, down 20% for the session
Wed Oct 21 - S&P closes at 258, a two-day gain of 15%
Fri Oct 23 - post-crash episode (S&P at 248)
Mon Oct 26 - S&P plunges 8% for the session, closing at 228
Fri Dec 4 - S&P drops to 221, lowest level since early '86
Thu Dec 31 - S&P ends the year at 247

The S&P would not exceed 329 again until July 1989.

The actual numbers seem possibly less dramatic than the mythology. Zweig's call was impressive, but required spectacular timing. Looking at an intraday chart of the primary crash day, stocks were down nearly 10% within the first 90 minutes of trading, and the exchanges were encountering difficulties that may have prevented trade attempts from executing.

Nords

  • Magnum Stache
  • ******
  • Posts: 3217
  • Age: 59
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Interesting historical WSW clips
« Reply #2 on: July 29, 2014, 11:21:52 PM »
Too bad it was only a weekly (Friday night) show, because things had calmed down considerably by the time of the post-crash episode.
I was attending the Naval Postgraduate School when this happened, along with about 500 other peers of my age & income.  Aside from college, it was the only duty station where everyone was about the same demographic.

On Tuesday the 20th, the campus was a ghost town.  More of our fellow students were showing up by Friday and explaining what they'd been doing.  It turned out that a few people had been licking their wounds (and wondering what to do next) while most of the rest were frantically scrabbling behind sofa cushions for more money to buy shares on sale.  This was back in the day when "buying shares" meant that you had to wire funds to your brokerage and then spend the entire day literally "dialing for dollars" to place your buy orders, getting constant busy signals and long hold queues, and paying hundred of dollars in commissions.  One courageous guy even talked about using something called "margin" and taking out a second mortgage on his home. 

A (very) few were skeptical and buying gold.  After all, the market had been going up almost constantly for five years.  It was supposed to crash again any day now, and then it'd return to its "normal" behavior of 1966-1982.  Because, after all, bull markets never last that long.  You could look at the charts and see exactly what was about to happen.  Everybody knew that stocks were dead.

A couple of nuts (mostly financial-management majors who couldn't handle engineering) were buying shares of a hot new stock called Micro-Soft.  We computer engineering guys had been working with one of their products called "Windows 1.0", and it was a freakin' disaster.  We were hot stuff with our Silicon Graphics machines, and when we couldn't get time on one of those then we time-shared on our department's VMS VAX.  Who could beat that horsepower?!?  But Apple IIs were great, everyone was saving up to buy a Mac, and they were a lot more fun than those loser IBM PCs. 

Good times, good times.

In early November my spouse and I cashed in all our CDs and other oddball investments (like birthday-present EE bonds and Israeli bonds) and plunked it all into Fidelity equity mutual funds (with a 2% sales charge).  That paid off very nicely, and we kept DCA'ing for the next 14 years.
« Last Edit: July 29, 2014, 11:29:56 PM by Nords »

ect

  • 5 O'Clock Shadow
  • *
  • Posts: 29
Re: Interesting historical WSW clips
« Reply #3 on: July 30, 2014, 10:46:51 AM »
This was back in the day when "buying shares" meant that you had to wire funds to your brokerage and then spend the entire day literally "dialing for dollars" to place your buy orders, getting constant busy signals and long hold queues, and paying hundred of dollars in commissions.

For an investor in the 1980s, information access was primitive, but the hair was extraordinary. This clip appears to be from near the end of Rukeyser's 30-year run as host, looking back at a 1982 interview with Peter Lynch:

https://www.youtube.com/watch?v=f74MweTRICM

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8827
  • Registered member
Re: Interesting historical WSW clips
« Reply #4 on: July 30, 2014, 02:02:45 PM »
Information presentation sucked back then, didn't it?  Why is the entire graph slanted?  Da fuq is "4n+6"?  Do I have to do alegrbra now to get a quote?