Thursday, 19 October 2017

Black Monday

Hard to believe that Black Monday was thirty years ago today. Many readers probably weren't even born, others too young to remember it, but I remember it well. 

The previous Friday I had been unable to get to work in London as the Great Storm of 1987 knocked down an estimated 15 million trees, including some that blocked the Caterham line. 

Cassini managed to sleep through it all, although I was aware that the power had gone out. It was still out when I woke up, so my bath was a cold one, and with no radio or news, I set off to work as usual. I couldn't understand why the road to the station was so deserted.

The Stock Exchange in London was closed and that day the Dow Jones in the US fell by another 4.6% to end the week down 9.5%. It had already been a troubled month with the previous week down another 6%.

So it was after an unplanned long weekend that I headed to the City on the Monday, to hear that the markets were down. 

Not a huge surprise, as the UK had some catching up to do, but the scale of the losses was memorable with the FTSE ending the day down 11%. 

Fortunately I was single at the time, and relatively poor, but several thousand pounds were lost on paper. No spreadsheets in those days, so the exact amount has long since been forgotten. 

What I do remember doing was calling my broker late in the day and buying more at what I thought was the market bottom. Wrong. The FTSE 100 dropped another 12.2% on the Tuesday, but a valuable lesson learned.

Time heals and 30 years on, the DJIA is above 23,000. 

The FTSE 100 which touched 1,598 in October 1987 is lagging behind, but is now above 7,500.

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