Investing Advice

More Stock Market History

While we are talking about history and market crashes, let me tell you a little story.

From 1990 to 2000, the NASDAQ had climbed from 373 to a truly amazing 5048. But then it began a 75% slide that shocked investors around the world, wiping out thousands of new millionaires. The 12 months just prior to this meltdown, saw many stocks doubling in as little as a week, and a few were up 5,000% for the year.

American technology companies, whose stock prices had been soaring in recent years, were suddenly having trouble making a profit. Hundreds of new companies saw their stock prices go up to dizzy heights and then come crashing down as investors realized that many of these startups (most who had never turned a profit) probably wouldn't survive.

Here's another little story.

Once upon a time there were hundreds of high-tech companies introducing new technologies in computers, software, and information services. Companies with big prospects saw the price of their shares run up thousands of percent in just a couple of years. Some stocks would double in only a week, a few were up 5,000%. Investors just couldn't see that the bubble had to burst. But it did, of course, beginning a bear market that wiped out thousands of new millionaires.

Does it sound like I'm repeating myself? Keep reading.

Prices for some companies dropped 80-90% and many companies disappeared within a year or two.

"Why are you telling me this?" you ask. Well, the year was 1969.

Here are some of the losers:

  1968
High
    High in
2002$
    1970
Low
    '68 to '70
% Drop
Fairchild  $102   (510)   $18   - 82%
Teledyne 72   (360)   13   - 82%
Control Data    163   (815)   28   - 83%
Mohawk Data 111   (535)   18   - 84%
Electronic Data Systems  162   (810)   24   - 85%
Optical Scanning 146   (730)   16   - 89%
University Computing    183   (830)   13   - 93%

 

Just a few of the hundreds of companies that crashed and burned. Sounds a lot like the 2000-2002 NASDAQ crash. There's a lesson to be learned here.
Other History of Wall Street and Stock Market Topics:

  1. History of Wall Street and Stock Markets
  2. More Wall Street History
  3. 1929 Stock Market Crash
  4. More Stock Market History

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