These Facts About 1987 Crash Will Blow Your Mind

I’m not going to scare you, or resort to gallows humor as I describe the events around or on October 19th, 1987. But, as my idol Dick Butkus once said about the NFL, “When I played pro football, I never set out to hurt anyone deliberately, unless it was, you know, important, like a league game or something.”

The DJIA was up from 1927 to 2710 from Jan 2nd through August 21st. It’s not every year in which it takes just 8 months to tack on 41%, but that’s where the market peaked in 1987.

Interest rates were north of 10% prior to the liquidity flood that was brought in by the Fed.

You’ve seen the headlines and magazine covers, but I’ll share two below:

The typeface tells the tale, but I thought I’d put things in perspective versus today’s market.

Back in 1987, a little stock called Apple began the year at $.73 a share. It peaked up at $2.08, a gain of some 140% in ten months. As the market began to sell off, so did AAPL, losing some $.36, or  17% from Oct 1 to Oct 16. Then on Black Monday, October 19th, 1987, Apple fell to a close of $1.30, losing another $.42 or 24% in a single session.

The average turnover of Apple shares in 1987 was give or take 30M shares, but it traded 119M shares as people hit the exits on Black Monday. So, if on average Apple traded 30M shares and it was $2/share, that means it traded about $60M in an entire trading session.

Now let me put that in perspective:

Today, on the open I used our HeatSeeker to monitor Apple shares for a single minute.

I found 7,233 separate trades in those 60 seconds.

That comes to 121 trades per second.

The average price of shares over that minute was $156.19.

In that minute Apple traded 1,510,131 shares, which at an average price of $156.19 comes to $235,868,665.

So, due to a greater number of market participants, and near speed of light trading, Apple traded nearly 4 times the entire dollar value of an entire session in 1987 and did so in a single minute.