Panic selling ensued from "summary" of The Great Crash 1929 by John Kenneth Galbraith
The great break came very suddenly and with dramatic force. The market had been declining for a week or more, and then came a moment when it could no longer be denied that the decline had assumed the shape of a panic. Panic selling ensued. The stocks that had been most inflated in the previous upward movement, and hence most vulnerable, suffered most. These had been the glamour stocks, the issues with exciting possibilities — the radio shares, the lighter-than-air stocks, the famous Shenandoah and the equally famous Akron, the investment trusts with their extraordinary leverage. The selling was savage, but the buying was almost as savage. The popular bargains were no longer bargains. They were simply to be had almost for the taking. And no one could tell when the bottom would be reached. It might be that they would go still lower the next day, and they did. It might be that the speculator who bought today at 50 would find the same stock selling at 40 or even 30 the next day. Indeed he would. The margin trader was caught. He had to put up more money or sell. He sold. And when he sold, he added to the market break. The more he sold, the lower the prices, and the lower the prices, the more he had to sell. The tone of the market became steadily more desperate. People were ruined daily, hourly, for the action was almost continuous. The volume of trading, which had been so large in the inflation, now became fantastic. The ticker ran hours behind. The tape was making history with each tick. The ticker was endlessly exciting. On the stock exchange floor, the crowd surged and swayed. The atmosphere was tense, dramatic, terrible. This is a kind of tragedy, of course. But the participants were not in a tragic mood. They had been making a lot of money, and now they were losing it. They had been taking chances and now the chances turned against them. They did not like it, but it was not tragic. It was a time of great excitement, and they were excited. It was a time of great interest, and they were interested. They did not like losing money, but they were losing it. They did not like being ruined, but they were being ruined. And the ruin was complete.
Similar Posts
Behavioral finance challenges traditional economic theory
Traditional economic theory assumes that individuals always act rationally, making decisions based on all available information...
Prepare for a potential market downturn
Preparing for a potential market downturn is crucial for protecting your financial well-being. It involves taking proactive ste...
The Dao of Capital offers a unique perspective on investing
Mark Spitznagel's insightful exploration of investing through the lens of the Dao of Capital reveals a fresh and unconventional...
Risks associated with algorithmic decisionmaking
Algorithmic decision-making has transformed industries and economies across the globe, but it is not without its risks. One of ...
Consider the impact of inflation on your investments
When thinking about your investments, it is crucial to keep in mind the ever-present factor of inflation. Inflation can have a ...
Price increases fueled more buying
Price increases had a peculiar effect on the minds of the public. As stock prices went up, there was a general feeling that the...
Economic fundamentals were overlooked
The most striking and significant oversight of the period before the Great Crash of 1929 was the failure to adequately consider...
Markets exhibit collective behavior
The concept of markets exhibiting collective behavior is fundamental to understanding the dynamics of financial markets. It is ...
Market irrationality became evident
One of the most striking features of the stock market in the months leading up to the crash of 1929 was the clear and undeniabl...