How many points did the stock market lose in the crash of 1929?
May 20th, 2008 | by Michael |
Becky asked:
Also, how much wealth was lost in terms of money during the crash? Can anyone explain what the overvaluation of stocks is? The stock market is very confusing to me, but I think it’s wise to invest. Any help would be great.
I’m getting conflicting information. Online, I read that the 16 billion dollars were lost, but what you said contradicts this.
I also read that more than 500 points were lost.
SYLVESTER
Also, how much wealth was lost in terms of money during the crash? Can anyone explain what the overvaluation of stocks is? The stock market is very confusing to me, but I think it’s wise to invest. Any help would be great.
I’m getting conflicting information. Online, I read that the 16 billion dollars were lost, but what you said contradicts this.
I also read that more than 500 points were lost.
SYLVESTER
5 Responses to “How many points did the stock market lose in the crash of 1929?”
By Mystic on May 23, 2008 | Reply
In the crash of 1929, almost 200 (actually closer to 175) points were lost by the stock market. In terms of money, almost 30 million dollars were lost during that week.
Overavaluation of stocks:
By val b on May 27, 2008 | Reply
too much,Dow went from 400 to 145 points in a 3day period. put in a search for the stock market crash of 1929, all your answers are there.
By Judy on May 29, 2008 | Reply
According to wikipedia, it fell about 90% between 1929 and 1932. “Points” doesn’t mean much, since the overall numbers were so much lower then - total points drop was just a few hundred over that time.
By muncie birder on May 29, 2008 | Reply
At the 1929 high the Dow Jones Industrial Average stood at 380.33. By the time the crash hit bottom in 1932 the Average stood at 42.84. But you need to realize that the Dow Average was made of the the leading stocks. The average fall for the average stock was much much more. Many went bankrupt and of course the investors lost everything who invested in them. Heck, I doubt that anyone knows for sure how much money was actually lost during the crash directly from the crash. One thing you need to be aware of is that a dollar back then was not the same as a dollar today. A dollar then was worth about somewhere in the neighborhood of $50.00 today, mabe more. The most expensive hotel room in NYC then cost $5.00. What is it today, about $500 or $1000. Because of liberal margin requirements then, in the first week of the crash most speculators lost everything.
As for being wise to invest. I am in agreement with that statement. But one does have to be somewhat rational about investing. First of all part of a persons investment policy should be to have a cash reserve on hand for when the market does take one of its periodic 25% to 35% reevaluations. Secondly, when the market has a somewhat prolonged rise, that is a time to bank some of the profits–add to the cash reserves.
Overvaluation of stocks is when the average pe of the average stock rises greatly above the norm. I believe the average now of the S&P 500 is about 17. At times it has been above 25, and occasionally even higher. At other times it has been below 10. When it is below 10, stocks are cheap. When it is above 20 stocks are very expensive.
By speedy266 on May 30, 2008 | Reply
September 3rd 1929 the Dow peaked at 381.17 and hit a bottom on July 8th 1932 of 41.22
In todays terms thats equivalent to the dow peaking at 12200 and falling to a bottom at 1319.32
pretty scary if you ask me!