Thirty years later, its lessons remain valid.
The U.S. stock market has provided four out-of-body experiences during the past half century:
1. The 1973-74 bear market;
2. Black Monday;
3. The New Era's rise and fall;
4. The 2008 financial crisis.
In each instance, the markets took over the broadcast news. It's not normal for investments to own the headlines. They are customarily treated as ancillary dispatches, along with the traffic, sports, and weather, rather than as items that affect the entire nation. But on occasion, stocks force their way to the forefront. When that happens, everybody cares how the Dow Jones finishes on the day.
Oh, did we ever on Oct. 19, 1987! That was the most shattering stock-market performance of my lifetime. At the time, I owned no stocks, nor did I expect ever to do so. (I was not born into an investing family.) Nonetheless, I spent that day searching for a radio, listening in horror to what seemed to be a national collapse.
As related in this reminiscence, Federal Reserve chief Alan Greenspan was caught unaware. He knew that the markets had started badly, then boarded a plane. When his flight landed, he asked how the Dow had fared. The answer was "Down 508"--the largest one-day percentage drop in the index's history. Greenspan was pleased. He interpreted that response as meaning "Down 5.08."