Germany and Italy. This implied that its economy was barely impeded by the war, leading to America being declared as the World’s leading economy.
Throughout the 1920s America had actually become isolationist, meaning that they encouraged Americans to purchase American products. This implied that they had no export market to other countries. The stock market was played by a huge amount of people in 1920s America as they made certain to make a profit – after all stocks hadn’t dropped because the war. Women were also starting to buy the stock market which reveals just how confident America was about the stock market as females at the time were not as bold as men and were more mindful and conservative with their money. When stocks unexpectedly began to drop quickly, all of this changed however on the 29th October 1929. This was only the beginning however, the next day stocks were falling by 200 points at a time – the Wall Street Crash had actually started.
and that’s just the beginning…
The book demonstrates how Lynch hounds and records these multi-bagger development stocks. This method worked actually well throughout the booming stock exchange of the 1980’s and 1990’s. There is a bit of stock market history the book fails to point out.
More About Wall Street Crash Of 1929
From 1950 to 1973 there was a raging booming market, similar to the one we had in the 1980’s and 1990’s. Multi-bagger growth stocks did extremely well during that duration. There was a bonus group of multi-baggers called the Nifty Fifty.
The Wall Street Crash can be attributed to a variety of various reasons both short-term and long-term which can be more broken down into social, economic and political causes.
Overproduction by American industries also played a large role in triggering the Wall Street Crash. This was since the companies carried on making their products in order to keep their business running however they made a significant loss on every one and their share/stock fell whenever they made one that they did not sell. This is most appropriate to the car market, as most people only require one car and after they buy that car, they will likely not buy another one once more. Overproduction indicated that there was more supply than demand so the companies made huge losses and some even declared bankruptcy. This is because the higher the quantity of the product in the market, the lower its rarity and therefore its price. Because of this, many workers in the car companies lost their jobs as there was a surplus of cars and at that point, the car market had become saturated meaning that everyone who could manage to purchase the product had it.
Moreover, the farming industry also suffered as the farmers had actually produced too much crop and for that reason its price dropped. Overproduction resulted in a decrease in demand for the car companies’ stock which led to people wanting to offer their stock in fear of it falling even further. There were more sellers than purchasers and so the stock price fell further and BOOM the crash occurred. However speculation likewise credited to the crash significantly. Overproduction is a long-term, socioeconomic cause.
Speculation played a large role in the triggering of the Wall Street Crash and it had caused mass hysteria right before the crash. Speculation is basically betting on whether a certain stock will increase or down. For instance, if a new CEO changes the old one and no one is sure of his/her ability they will certainly offer their stock because company as they are uncertain of the brand-new CEO’s ability. Speculation suggested that there were more sellers than purchasers, meaning that the share/stock costs fell rapidly as nobody wanted to purchase them – thus causing the crash. Speculation in America is a short-term social and economic cause.
Another cause was overconfidence prior to the crash in America. Individuals of America chose to neglect all of the market’s warning signs and followed the President (Herbert Hoover) who said that was well and had actually embraced a policy that indicated that the federal government would not affect the stock or impact market. This policy was called Laissez Faire.
A significant cause of the Crash was the Republican Party’s method to the market and the economy – called Laissez Faire (mentioned in the above paragraph). This suggests that they did not plan to do anything to the marketplace that might possibly affect it or exacerbate it. Their policy for the marketplace was ‘leave it to the market’. This cause was brief term as when the Democrats came into power at the next election they pumped money into the market in order to ‘restore’ it. Moreover, Hoover had embraced a point of view that he called ‘Rugged Individualism’ which meant that he expected people to aid themselves instead of others.
The Nasdaq is a dealer’s market, in which market individuals are not purchasing from and selling to one another but to and from a dealer, which, when it come to the Nasdaq, is a market maker.
Irregular distribution of wealth played a huge role in the Wall Street Crash as it meant that the rich and extremely rich held almost all of the country’s wealth (such as Rockefeller). This was a large issue because it meant that if something were to take place to the rich then America’s economy would entirely collapse. All of the very rich played the stock exchange as it was to them a sure-fire method of making huge amounts of money with minimal effort, however their greed would return to haunt them in the Wall Street Crash. Rockefeller lost more than half his fortune, which amounted to 1 % of America’s whole economy. Over 60 % of people in 1920s America did not experience the ‘roaring’ twenties as they were so poor that even with pay rises they could not pay for these luxuries. This was a long term socioeconomic reason for the crash.
Isolationism suggested that America had no trade routes to other countries, as America was also Protectionist meaning that they had bonus tariffs that were put in location in order to discourage trade with other countries. They did this as they wanted Americans to buy American therefore increasing the economy instead of funding another country’s. This suggested nevertheless that if they produced excessive of a specific product, such as cars for instance, they would be not able to offer it overseas. Because Europe had actually put comparable tariffs in location in order to encourage people NOT to purchase American, this was. For that reason, American products were so greatly taxed when being delivered abroad that America had hardly any trade paths. Isolationism in America was a long term socio-political cause.
The Wall Street Crash changed America forever and brought an end to the years of growth and success that they were experiencing. America’s economy crashed with nearly all banks being shut down and financiers selling their chrome-finished cars for as low-cost as $100 (see Page 215).
Two sectors of the American economy that were hit particularly hard by the Wall Street Crash were the farming market and the banking sector. In 1929, 659 banks failed whereas in 1931 (after the Crash) 2294 banks failed. The American agricultural market declined even more with production dropping by 40 %. This suggested that salaries likewise fell by as much as 60 % and this left with 14 million Americans jobless. This was a long term socioeconomic cause.
The Wall Street Crash likewise partly triggered the Great Depression, which became as America was the world’s foremost economic centre at the time therefore if it’s economy decreased, the rest of the world’s stock markets and economies would crash. However just 16 % of Americans had purchased the Stock Market and so it can not be deemed as a main trigger. The Great Depression suggested that nearly all construction worldwide was stopped as there was just insufficient money to money it. The Great Depression was a long term socioeconomic and political cause as countries felt the impacts of it for many years after the event (some had actually not recovered by WW2 whereas Japan was left untouched by the crash).