NEPSE Traders (2024)

13/05/2023

1800😮‍💨

14/04/2023

अहिलेको अवस्था हेरेर के भन्न चाहनु भएको छ त यो बुलिश रनको सुरुवात हो वा केवल एक सुधार....🚀🐃🤔

13/04/2023

Maket closed by juicy bullish candle for this year
Hope for the good for next year..
Happy new year Traders.❤️🐃

17/08/2022

🙂

10/08/2022

just mine thought.😀

31/05/2022

28/05/2022

1929 stock market crash.

Via.Buddhas Love

The biggest stock market crash the world has ever seen. What happened, why it happened and how it happened.

During 1914-1918, during the first world war, the US govt to raise money for the war effort sold something called "Liberty Bonds" to the general public. Govt would borrow money from the public, would pay interest for that borrowed money once in 6 months.

Massive campaigning was done by famous celebrities like Charlie Chaplin to persuade people into buying these govt bonds. A huge number of people in turn bought these bonds. It was the first time ever in history, common people bought bonds that can be traded in the listed market.3

Before 1919, stocks were considered pure speculation. But when people saw corporate bonds, stocks trading along with liberty bonds on a regular basis, the earlier view about stocks as speculation completely changed.

1920-1929 was one of the greatest bull markets the world has ever seen at that time. Stocks just wouldn't come down. Common people ventured into the stock market in great numbers thinking the stocks would go up and only up. The original buy the dip gang was from this era.

The people's faith in the bull market was so massive that people mortgaged their houses/liberty bonds to buy shares of companies. Brokerage firms also started introducing 'buy now pay later schemes' (leverage).

You could buy a share worth $100 for just $10 with the broker paying the rest. If the share price increased by $10, you would be making a 100% return on your original investment($10). People never saw the downside in this as the stocks were just going up and up.

This vast influx of borrowed money into the stock market created more demand for shares essentially taking the stock prices even higher. The dow jones increased by 50% in 1928, attracting more people to borrow money and invest.

On 23rd October 1929, during the lasthour of trading, the automobile stocks fell sharply, no one knew why the shares were falling. The next day, 24th October in history is known as the BLACK Thursday of 1929. Common people were stunned in disbelief as stocks plummeted.

We need to remember that majority of the stocks were bought with borrowed money, when stock price decreases by a certain amount, the brokerage company will ask people more $ to keep stock purchases intact or will sell the shares due to the client not being able to maintain margin.

Imagine brokerage people trying to sell people's shares(due to non maintenance of margin) but there's no1 at the other end to buy. Where will the share prices go? The stock market vaporized 25 billion dollars in the last week of October 1929 due to this massive credit bubble.

The collateral damage was not only seen in the stock market but also in banks, factories and industries. 1000s of banks closed down and factories shut down. It took more than 25 years for the stock market to recover.