Robert Shiller and Black Monday

Robert Shiller, well-know Yale economist, wrote an article in The Washington Post on April 10, 1988 presenting his survey results related to The Black Monday – October 19, 1987.

Having gone through the recent crash as an individual investor, it was instructive and interesting to read a bit of history on sentiments during Crash of 1987.  Here some excerpts –

The most important news stories was early news of the crash itself – the 200-point drop in the Dow the morning of Monday, Oct 19.  The second most important story for both (individual and institutional investors) was the drop in U.S. stock prices the week earlier, specifically on October 14-16.  The biggest factor in the crash seems to be a reaction to prices declines themselves. Black Monday is best explained as a vicious circle – price decline feeding on previous price declines

And below is an classic –


And I am thinking to myself, did I have similar attitude and mindset leading up to The Great Panic of 2008.


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