28
Mar

Black Monday Anniversary:

Escrito el 28 Marzo 2007 por Juan Toro en Financial Markets

Some people love history and some others love anecdotal evidence. Problem often is that not everyone knows how to distinguish between both. Let me show an example related with the stock markets.

Next October there will be 20 years since the famous Black Monday when the stock market had the second largest one-day percentage decline in history. By the end of October 1987, stock markets in United Kingdom had fallen 45.8% and 22.68% in the United States. Several explanations were offered to explain the plunge. Among them we could point out program trading and overvaluation. The page attached received from Sigma Derivatives shows what it might be some resemblance between those days and markets nowadays. This could be a case of anecdotal evidence though some would try to find something more in the graphed data.

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