Skip to main content

WORST STOCK MARKET CRASHES

In the present global credit crisis and stock market crashes across the globe, let us see the worst stock market crash over the last century. These are as follows:

1 ) Wall Street 1929-32 -89%
The Wall Street Crash heads the list, with the US stock market falling by 89 per cent between 1929 and 1932. The burst of the speculative bubble led to further selling as people who had borrowed money to buy shares had to cash them in a hurry when their loans [were] called in.

2 ) US NASDAQ 2000-2002 -82%
The second biggest collapse came from the technology-rich US Nasdaq index, which fell by 82 per cent following the bursting of the dot com bubble in 2000.
3 ) Japan NIKKEI 1990-2003 -79%
In third place, with a 79 per cent decline, was the Japanese stock market, which suffered a protracted slide in price from 1990 to 2003 as a share and property price bubble burst and turned into a deflationary nightmare.

4 ) London 1973-74 -73%
Next came the UK stock market’s 73 per cent drop in 1973 and 1974. set against the backdrop of a dramatic rise in oil prices, the miners’ strike and the downfall of the Heath government.


5 ) Hong Kong 1997-98 -64%
The Hong Kong stock market’s heavy fall in 1997-1998 came as investors deserted emerging Asian shares, including a very overheated Hong Kong stock market.

6 ) London 2000-2003 -52%
 The UK took sixth place in the table with a 52 per cent market fall between 2000 and 2003 as investors suffered the consequences of the collapse of the technology bubble.
 7 ) Wall Street 1937-38 -49%
This share price fall was [triggered] by an economic recession and doubts about the effectiveness of Franklin D Roosevelt’s New Deal policy.

8 ) Wall Street 1906-07 -48%
Markets took fright after President Theodore Roosevelt had threatened to rein in the monopolies that flourished in various industrial sectors, notably railways.

9 ) Wall Street 1919-21 -46%
There were fears that the new automobile sector was becoming overheated and that car ownership had reached saturation point.

10 ) Wall Street 1901-03 -46%
Cause: The market was spooked by the assassination of President McKinley in 1901, coupled with a severe drought later the same year.


Does the cause and implication of current market crisis is similar to the repeated history?



Comments

Post a Comment

Popular posts from this blog

WHERE ARE THE EXPERTS?

When the equity market across the globe was in bull phase in the last year, we saw a lot of market experts appearing in the News Channels and print media giving tips for becoming rich overnight. This phenomenon was not only observed in India, but it was seen elsewhere. Wealth Management, Private Banking, Cross selling by the Banks for investment in Mutual Funds were the buzz word. The glamour and hype of the market was such that any TOM, DICK and HARRY from a third class B-School was selected for Investment Banking by the private investment consultants, brokerages and even so called very smart Banks for the wealth management and private Banking. Where have gone all the experts? Where are technical experts and Stock Analyst? Who is responsible for erosion of wealth for the investors? Who will take responsibility for failure of Banks particularly in USA and Europe? Why 150 year old institutions are failing? Why there is loss of confidence in the financial system? I know, nobody will co...
Post a Comment
Read more

HAVE WE LEARNT ANYTHING?

Beware. Once again experts are prowling for their prey. People are being given tips to make easy money. FII flows are coming to the equity market and market is zooming targetting new highs as if there was no problem last year. Sensex crossed 17000 and new targets were set on business news channels luring people to again invest in the stocks. Mutual fund sales pitch increased and new schemes are being launched. But does the situation is so goody- goody? In my personal opinion, again this is exuberance and experts are betting on greater fool theory.The greater fool theory (sometimes the bigger fool theory, also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a bigger fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else for an even better price. Today most o...
Post a Comment
Read more

RBI PROPOSAL ON BASE RATE

The timing of recent proposal by RBI to introduce base rate mechanism for lending activities could not have been better. Taking the experience of global financial crisis in which Indian Banks remained more or less unscathed, there must be a transparency in systems followed by the Banks to lend money prudently. Banking is a business, where safety of depositors money is of utmost importance. By lending below the average cost of the Bank, the bank jeopardise the safety of depositors fund as well as start a rate war among the lending institutions, that may be beneficial for the Bank as well as immensely beneficial for the borrower in the short term, it may be harmful for the banking system as a whole. The basic question is why should banks lend money at less than the cost of the fund to the bank? If strategically lending is done to select customers at rates below cost of funds, this has to be cross subsidised by higher rates for many more borrowers. There starts a disparity among borrowers...
Post a Comment
Read more