Wednesday, October 29, 2008

October 29

A great compilation of stories and quotes about October 29, 1929 from Sheila.

My favorite quote, from John Cassidy's Dot.con: How America Lost Its Mind and Its Money In the Internet Era:

Among the speculators' favorites during the 1920s were issues like Wright Aeronautics, Boeing, and, especially, Radio Company of America (or Radio, as it was then known), which was the most glamorous and fastest-growing corporation of the 1920s. Commercial radio was a revolutionary medium that shrunk the country like nothing before it, and Radio was the major player in the industry; it both manufactured radio sets and provided the programming they transmitted. In 1921 it's stock hit a low of 11/2. Thereafter, it climbed steadily until 1927, when it headed for the stratosphere. In April 1929, Radio hit a high, after adjusting for stock splits, of 570. During the stunning ascent, old-timers shook their heads in disbelief. Despite its rapid growth, Radio had never paid a cent in dividents, and many of its shareholders were professional gamblers. In October 1929, the stock lost 75 percent of its value. It recovered a bit during 1930, but then collapsed again, and remained collapsed for the rest of the decade. Despite the strong growth of commercial radio, RCA's stock didn't recover its April 1929 level until 1964 -- thirty-five years later.

I freely admit that I don't know enough about the crash of 1929 as I should. But it would seem that there are lessons to be learned there. Small details such as the one above, I find fascinating. A well-known corporation that took 35 years to recover the value that it held just before the crash. That's pretty amazing.

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