- The 36th anniversary of Black Monday, the largest stock market crash by percent, is coming up on October 19.
- Nearly every year, as if it were seasonal, the chatter grows louder that US stocks are in position to see a 1987-style selloff.
- The most recent example talked about skyrocketing Treasury yields, but there are differences on the other side of the ledger, including gold, that indicate a crash is not coming.
October 1987. I remember it as if it was yesterday. I had graduated from Fort Hays State University the previous May, and with degree firmly in hand I went back to work at my hometown (Lewis, Kansas) grain elevator. What does one do with a PoliSci degree working in a grain elevator in an eyeblink town just off Highway 50 in the middle of nowhere Kansas[i]? Run fertilizer tanks, dump grain trucks, and enter tickets, of course. It just so happened I was working in the office doing the latter the week in early October, overhearing the chatter of those coming in for coffee. Something clicked in my head, telling me US stock markets were set to fall, so I walked into our little in-house commodity office and opened an account. The first trade I ever put on was buying S&P 500 ($INX) put options with only a few days remaining before expiration. If I recall, these went off the board the Thursday (?) October 15, 1987. Yes, just before Black Monday on October 19. They made money, decent money for a kid, so we went out to celebrate at the local Pub with tacos and beer Friday.
