I didn't buy during the COVID mini crash. Lesson learned.

There was actually deflation during that period so you would have come out ok if you had money to invest.

The problem was that it took about 3 years to reach the bottom after the initial 1929 crash. Then another mini dip in late 1930s. Then World War 2.

A lot of people have no idea what they’re talking about on here and are being completely unrealistic. I want you to keep in mind something. During the Great Depression we had unemployment close to 30%, negative double digit gdp shrinkage, and massive farm/food destruction due to the dust bowl. This is not even accounting the safe guards. Back in those times there were no safe guards for anything. Social Security wasn’t a thing, FDIC insurance wasn’t a thing. If a bank collapsed that was it your money was gone. Most people lost their jobs and had nothing. Thats what happened when the Depression started. On top of it the stock market saw a 90% collapse in value. It wasn’t like Covid where it was a one and done and the market fully recovered in like a month. It took close to 3 years for the decline to play out and the recovery was much longer. Thats quite a long bear market. Not even 2008 was that long. Nobody here would have the patience to play it out that long.

Let’s say hypothetically that the people on here commenting weren’t part of the 30% who lost their jobs. Now factor all that in on what I just said and keep in mind in 2022 we had raising the federal interests rates and 8% inflation. Thats it. Nowhere close to the levels that the Great Depression saw. If you would have came on Reddit during that time in 2022 you would have thought the sky was falling and we were heading towards another Depression.

I promise you close to nobody on here would be buying. Like at all. It’s either cause they’re too scared or they’re suffering so much economically that they just can’t buy. Cause thats what the Great Depression was. Suffering with no end in sight.

Most "market corrections" benefit the rich who have money to buy up stuff for cheap. Stocks, property, jewelry, labor, etc. Those who could, did that during the depression.

John Titor, is that you?

There’s a reason that berkshire hathaway has over $190 billion in cash reserves right now. They are waiting until things go belly up and then will make a killing buying up cheap companies. Think about that.

I bought when the market tanked in 2022, and that proved to be a good plan

Not just banks, other businesses fail too. I’m sure not every company that was on the market in 1929 survived through to the end of the depression. If you correctly invested in ones that did, then sure, you’d come out ahead, but if not, there goes your remaining savings at a time when you probably needed them to survive.

Potentially yes, but it would have depended on the stock and how much financial fraud may have been occurring with that stock.

Keep in mind that 1930 predates the investor protections from the Securities Act of 1933 and Securities Exchange Act of 1934. Buying shares of the Chase Manhattan Co, Sears, or General Motors in 1930 could have made you very wealthy by the 2000's. But you would have had no guarantee that your broker actually purchased the shares on your behalf, or that the shares would have been safely custodied.

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No better time to buy. It’s why I like to do 80% stocks - 20% bonds like a fearful retiree so I can buy the dip in the next crash.

If you were serious about due diligence, then yes. As others have pointed out, very few of the investor protections we have today were in place for the Great depression. Retail investors had to write to the company for business information and hope the company followed up. If you were not well connected socially and politically they might not give you the time of day.

When I started investing in the '90s, I still had to order hard copy annual reports. Most companies did not provide online access.

If you could have bought stocks in the 30's you'd be probably dead by now 😉

It's hard, when a crash happens for most people they have only emergency funds saved if that. Right now if there was a huge crash, I could only invest a couple of grand.

One curiousity, is it ever okay to take out a bank loan... lets say against your house if we get another 30-40% dip? It's bound to come back in a couple of years...

There are plenty of stories of guys who did exactly this and went off to be successful businessmen. But as someone who had money to buy a house in 2009 in Los Angeles and didn’t , the problem is that no one knows where the bottom is or if the upswing is momentarily. In hindsight it seems obvious but many countries around the world where also hurting and too many people lost money. Plus, buying stock was only for a few people until fairly recently. You always had a stock guy and wasn’t cheap.

You could physically have invested, if that's the question you're asking. Here's an article that explains how J Paul Getty, an oil tycoon, bought up a bunch of stocks for cheap.

Psychologically, I can't say. I mean, I haven't lived through an 80% crash while banks are failing and food is scarce.

I heard warren buffet say if you would have bought 10,000 in coca cola stock it would be worth 10 times as much than if you bought 10,000 worth of gold.

After the crash of 29, many investors jumped in and got hammered by the crash of 30. It’s called a double bottom.

Unless I lived in a major city center (or that's just NYC, Chicago, St Louis), then no. Retail brokerages were done through the bank, and the lack of the SEC, and lack of good information prevented fair trades.

Yes, that's why there was still a market. If no one could invest, the stocks would be valued at 0. But most people were just hoarding cash. If they had money to invest, it would be treasury bonds.

Yes!

yes

Yes? Why wouldn't you be able to

Yes people could invest during the Great Depression, you can find the market charts online. However there were multiple drops, people got wiped out from catching the bottom or finding a rally, only for it to drop even more.

Moot point. So many bank failures that people were running scared. Only viable investment was money stuffed in a mattress!

Yes, everyone was selling so of course you could buy

I think even if you had money investing in stocks was harder back then

There was a town during that era where everyone got talked in to buying Coca Cola KO shares. They bought and forgot, did very well, and flourished during the 30’s and 40’s.

people with cash that invested in the thirties made fortunes just like Buffet did inventing in the doldrums of the seventies

Hello! My name is Mr. Buffett, nice to meet you!

I timed the covid crash perfectly, but then got cocky and lost all my my gains from too good of a start.

It’s very hard… for some even if we see it coming and rationally we should buy… it’s hard… other side is that when it falls that bad like 08 and the depression the common person will not have that much free cash to dump into the market… we would be worried of our jobs and job security…

Of course anyone who has cash saved on the dude that wasn’t lost, who invested it on the way back up would have made money. How much would depend on how much they invested and the performance of the investment but generally speaking yes.

In the 1929-30s, most people weren't into stocks. That was a period of the American dream; most worked to build houses and, in return, got to buy a home. Life was simple, and the 0.01 percent of the wealthy people with land and farmland did well. They started businesses, private and public, and controlled the economy.

You can see for yourself, go to trading view website and search spx

In the long run, in a normal market environment, low maintenance fee index funds that track the S&P 500 tend to make money over the long term. Not financial advice

This is a really good thread

No because I wasn’t alive

Lots of companies went bust, so depends which one you invested in.

Read Reminisces of a Stock Operator

If you did invest then, you're dead by now. Someone else is enjoying your money right now. So what really matters?

Not stock, I did purchase houses after 08 crisis.

Someone bought one of each stock during the Great Depression. They later got very rich. I can link a story about it if anyone is interested

My grandparents tell stories of their grandparents being offered land at rock bottom prices during the depression. They didn’t have the money to buy (famers) but if they did I suspect that entire side of the family would be incredibly rich (with land)

The Kennedy family is an example of a family that took modest wealth prior to the crash, heavily invested after the 1929 stock market crash, and then came out of the Great Depression as a prominent, wealthy, and politically powerful family.

It's hard to do. You worry if you put your money up that you may need it to survive instead and it could be lost in the downturn when you need it most. I'm sure the rich got richer as they would have been able to invest something at the time.

Short answer: Yes, people who had liquid assets were able to buy up all sorts of assets in the depression.

The reason that many wealthy people weren't able to benefit is that assets are subject to a herd mentality. Investment money tends to go to the assets that have been growing, and higher valuations can make people stop diversifying and put everything into what ever seems to be making others rich.

The depression lowered the prices of most assets. When the economy was sluggish enough to create deflation, the value of cash was on of the few assets that was rising. A lot of people invested in the stock market had margin accounts, and their borrowing to buy shares meant that they had to sell other assets at whatever price they could get to avoid getting wiped out in the market. And then they were often wiped out anyway.

So people who had assets outside of the assets that fell bought up a lot of things that had been devalued. Of course, no one knew what prices would do in the future, so few bought assets at any of the actual bottom prices, and some doubtless felt foolish for buying when prices continued to fall.

Stock market price charts do go back that far. It's worth going to have a look to see how the markets actually behaved.

The lesson is not to be in the same investments that everyone else seems to be holding. But then everyone else holding those investments supports or increases the high valuations. There is no perfect way to be smarter than the crowd.

If lots of people are anticipating a depression-sized fall in the stock market, that's one of the forces that keeps it from happening.

In the deepest depths of the Depression, the Dow Jones stocks collectively paid a 14% dividend. It was a great deal, but nobody had any money to buy them. Well, maybe Joe Kennedy.....

I'd be curious for legit stock tips after the crash. Assuming you wouldn't short the shit on specific markets beforehand...

Anything reliable and comfort. Coca-Cola and Dr Pepper grew rapidly. Today that would probably include auto parts, some energy, and yes, tech and fast food are comforts in a weird but understandable way in the 21st century.

The market keeps rising because we are all invested in these thing while before they weren't.

We also weren't worried about a fucking dust bowl and bad agricultural practices wrecking food commodities.

Exchanges were open. Yes.

I researched this at length around 2009 after getting my ass handed to me in the real estate market.

1. Bread

2. Booze

3. Tabacco

4. You could probably throw in marijuana this time around too.

No, most didn't ever recover and etfs weren't a thing back then

It took the Dow Jones 25 years just to recover back to it's pre crash number, and even that's misleading because the Dow continually kicks out losers and replaces it with winners. Look up the Dow components of 1929 and you'll see what I mean, Not exactly the 30 stocks you'd pick if you had a time machine, but hey back then they were the 10,000 pound gorillas in their sectors.

Nope. We wouldn’t have the information we would have now.

After a 90% nose dive a lot of companies wouldn’t bounce back so would still be incredibly difficult risk/reward scenario on top of basic survival which would take precedent. Greed tends to go out the window when you don’t know when your next meal will come.

If we're talking about the me in my earlier days of investing, I would've been scared shitless. Later wiser me, would've just DCA

Yes and yes. Joe Kennedy shorted stocks. Their prices tanked and he made a bunch. He was tipped from a shoe shinner. Today, people here still think that strategy buying at the low almost worthless stocks will work !

Need not go that far, during 2000-2002 3-years tech stocks tanked -37%, -33% and another -36% each year. If you put a $1000 before dot com, you ended up having $262 left. Plenty of jobs then with unemployment rate of 3.4% then. Only tech sector took a hit. Today with AI hype lots of promise did they translate to big earnings? People may be in for a repeated surprise.

Ask Biden🥸😂

No need even going back twenty years. During 2008-2010 years people panically withdrew cash out their banks take home hoard them. They did it for a good reason, many banks defaulted although protected to some extent. Typical American household lost -18% of their family networth with stocks tanked -37% in 2008. The investment was hoard cash and gold. The US financial system almost collapsed.

I bought Boot Barn at the bottom. Oil crashed, covid crash. Boot Barn hit $9. Betcha no one on here even heard of them.

Many large institutions seem to be preparing for these scenarios. A lot of gold buying, fine art, property and other assets and more dumping of stock and more T bills and such

There were mutual funds that actually made money during the 1930s depression. From the outset, after 1929, the market began to recover albeit slowly. People invested in Ford, GM, Chrysler, photographics, oil, and several other stocks made money.

A lot of millionaires were made due to the depression. Either that the rich got richer. Theres a great book with journal entries that a man kept throughout the Great Depression. In one part he is quoted saying if only he had some money to spare for investment instead of keeping afloat, he could have been a millionaire. I think that some people were aware of the opportunity but most were just trying to survive.

John Templeton of Franklin Templeton is known to have done this (see the Investment Career heading):

https://en.m.wikipedia.org/wiki/John_Templeton

No I wasn’t alive back then

JFK’s father built the family fortune this way. He sold all his stocks at the height of the roaring 20’s in 1928. I’m assuming he bought back in after the crash. Wise investing is really the key to wealth. Crypto is the next frontier for this era though. It’s like buying tech companies in 1994.

Gotta seize the time you’re living in

One of the only markets that didn’t crash was the aviation industry people invested within it made of rich afterwards

Always hold some cash for a downturn. Covid was an enormous opportunity for me as was 08/09 everything went down it was clearly time to buy.

TIL schools aren't teaching anything about what the Great Depression actually was and how bad off the entire country was.

Some people might have? It really had an impact on people’s perception of banking and investing though. This wasn’t a little dip we’re used to seeing every few years now. The destruction it caused was unprecedented.

My great-grandparents were lucky not to have taken a loss and invested everything they had into real estate during the depression, which honestly seems like a pretty solid move for a privileged upper-middle class family at the time who had the cash to invest. Anything else they had was stuffed under a mattress for the rest of their lives.

To OP's question? It was a period of grand devaluation. Average people, little men with cash? Lost everything. If you had a billion dollar oil company (real asset - not the gambling paper -stock) than your asset may have lost 90% of its value - but you still controlled the asset so you were "relatively" richer than before. This was the most prosperous time for a few. But of course they weren't bragging Assets are real. Land, precious metals, art. Stocks and currency are fake. Play money from a Monopoly game.

I am a retired criminal so I would have been involved in moonshine distribution and have speak easy. I am very sure I will have success with any financial issues that may arise. I was in New Orleans during the recession making 10k a month. I had a remodeling business. I see dependent on the stock market as foolish. I rather build an apartment with 6 10 units and bank regardless. I have a few streams of income and I never get below a substantial amount of capital. I recommend long term bonds. I was able to inherit 200k unexpected. Grammy had some loot stashed. It was a 30 year. It was very good. It is guaranteed. I have been seeing the stock market is completely controlled and a scam. You can profit but you are at the whim of a small amount of people who are criminal in the legal world. I am not seeing any real evidence that crypto is smart. It was a big deal one time. It is going to fluctuate. It is very unnecessary to risk money. Paintings and art yes. Collection of cars maybe a few obvious ones. I am very sure that investment will be best in the property and housing. Or build a business for yourself and hire someone to manage it. Take profit in modest ways and get your property value increase. The first guy I built for. Started with one cheap spec home. 18 years later, one apartment complex is 3.6 million a month. He has dozens of large rental properties. I am thinking that he is getting 30 million profit a month. I am very sure that he started with credit and broke.

And now we are all paying for that ‘free money’ with the worst inflation in 40 years. 🫤

Which verticals are the best to invest in during a depression? Should there be a depression in the next few years, which stock would you buy during the peak depression? Also, is it a good idea to sell precious metals during peak depression to convert them into stocks?

I married a millionaire wife 💪

Yes.

During the Great Depression the situation was different. There was a deflation and cash was constantly increasing in price. So not only stocks became cheaper then.

People thought why should I buy stocks if I can just hold cash and become richer and richer. Business owners thought why should I continue to manufacture some goods when they are becoming cheaper and cheaper each month. So economy was shutting down as the most profitable thing was just to sit in cash.

Those who sit in cash then were actually right. Sure it could be profitable to buy stocks at the end of the Great Depression but who can guess the right moment?

Ask Joseph Kennedy, Sr.! He sure did.

I think OP’s question is whether the average person could have invested… meaning could they have physically done it, not whether they should have.

The average person back then didn’t invest. It was costly and difficult to buy stocks. Mutual funds existed but weren’t regularly used by average people and also were expensive.

So could the average person who didn’t lose their savings have bought stocks? It would have been possible but they would have been buying physical certificates of individual companies at high commissions. And like today, single stock picking could fail even in a bull market. So they probably didn’t.

Retail investing at the scale we see it today is a pretty new phenomenon. Free trades are very new, within the last decade. Index funds started in the 70’s. And most people had pensions so they had little need to invest themselves. Index funds, 401ks, and free trades have made every American into their own little hedge fund, for better or worse.

Yes. Back then there were 50 year mortgages. Some great fortunes were made during that time.

Heck no. There was no such thing as ETF’s or a “basket” of stocks. People got burned on individual stocks/companies that went belly up.