Irrational Exuberance

The fact that the Dow Jones Industrial average reached the 12,000 mark on 19 October, the 19th anniversary of Black Monday — the largest drop of the DJIA so far — was mentioned in a number of news stories.

Given the superstitious natures of investors, it’s not too surprising that the presence of a different anniversary is less visible. This Sunday is the 77th anniversary of Black Thursday (24 October 1929), the first day of the stock market crash that led to the Great Depression. Five days later (29 October 1929) — as jittery investors rushed to get their money out of the market — the DJIA took a 12% loss.

The DJIA had reached an all-time high less than two months earlier.