19-OCT-1987
Few days bring back memories like today. I was 26 years old, a new trader and I knew everything. 16-OCT I had gotten out of stocks and directed everyone I knew out of the market on 16-OCT as I smelled a rat.
Fortunately my primary responsibility at that time was trading bonds and I had recently studied the 1929-1932 stock market. I bought my limit of Treasuries and they went up points. I went to my bank withdrew my savings and stuck it under my stairs...true story. Stocks were able to be bought some at 35-60% less within weeks. That taints a guy. It did me.
This is a poem that Art Cashin wrote about the day the DJIA lost 22% in one day.
Enjoy,
Leon
The Insurer
Once upon a Monday dreary
Traders waited worn and weary
As they gazed upon newstickers
warning of the day in store
Foreign markets were imploding
sending senses of foreboding
With positions overloading
sellers would be bringing more
To dump upon a bloody floor
October now had past its middle
as investors faced this riddle
With their Quotrons they would fiddle
looking for The Bull of yore
Greenback's value falling quickly
trade deficit behaving sickly
And with Iran, relations prickly
raised the specter of a war
Ahead a day that promised gore
So on the open there came selling
much faster than the tape was telling
While in Chicago they were yelling
"Dynamic hedging" is no more!
Specialists were inundated
as futures prices unrelated
Kept the selling unabated
stocks once eight now sell at four
Futures dipped below the cash now
and insurers made a dash now
Trying not to be the last now
rushing for the exit door
Then news reporters often shrewder
began misquoting Chairman Ruder
A trading halt?...a new intruder
caused yet more panic on the floor
Bethesda had a guest named Nancy
ban operation somewhat chancy
Helped to make the markets antsy
adding to our selling lore
Throughout the day as prices melted
brokers, dealers all got pelted
And bank accounts not safety-belted
were blown away forever more
The bell, it rang to end the sorrow
while traders ran to banks to borrow
To have an ante for tomorrow
not knowing what it held in store
Twenty three years…now since that day *
yet there was a scare last May
Reminding in a flashy way
of when fear and panic swept the floor
The Dow stands full six times higher *
than when it closed that day so dire
Despite two wars and terror fire
the Bull arose to run some more
This anniversary, headlines all *
dwell upon that fateful fall
And ask us veterans to recall
a time that left us scared & sore
New chills we get from déjà vu *
as currencies now run askew
And trading partners threaten too
as in that sad October yore.
But keep your faith that it's a new day *
though there are hints that skies may turn gray
We’ll hope such clouds won't bring a blue day
let's hope the Bull returns once more!!
Art Cashin UBS, 1987
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