1929 Crash & Why Market Crashes Should Not Be Feared

1929 Crash
The 1929 Crash Just Like All Crashes Equates to Opportunity

So you ask why because it’s a prelude to a Massive Bull Run.  Stock market crashes represent opportunity, it requires a change in the angle of observation.

It all depends on what side of the fence you sit on. If you decided to pour all your money into the market close to the top, then it would be viewed as a tragic event. If on the other hand, you got in early and as the market trended higher, you banked some of your profits then it would be viewed as a splendid opportunity.  Crisis investing dictates that all disasters are nothing but opportunities, change the lens and the picture changes.

Stock Market crashes from 1929 onwards proved to buying opportunities

Market crashes Including The 1929 Crash Should Be Viewed Through Bullish Lens 

The main uptrend line is indicated by the solid blue line (last line in the chart above), but we put in a dotted navy blue line for those who would insist that the uptrend line could be drawn through secondary point.  Whichever uptrend line you choose, you can see that this point holds true, the greater the deviation, the better the buying opportunity. Look at the chart above; who won the from 1990-2016, the bears or the bulls?.  This chart is a clear illustration that the Doctors of Doom only make their money by selling the masses crap they would never dream of using.

The purple dotted line (4th line in the chart above) provides a guideline as to future market price action. However, to be conservative, we drew in two lines.  The navy blue one (3rd one) indicates that the Dow should easily trade to the 19,500 plus ranges in the not too distant future as long as the trend is up. The 4th line (purple dotted line) suggests that the Dow could trade past 25,000 before this bull market is over.   Note that we base everything we do on what in-house trend indicator: all other indicators even if some message appeared in the sky stating that the Dow would crash tomorrow take on a secondary role.

Markets spend more time trending upwards.  Who won the war from 1990-2017, the bears or the bulls?.   Even the terrible and devastating crash of 1987 turned out to be buying opportunity, and not a disaster as. The naysayers and doctors of doom were wrong once again.  Hence, you have clear proof that the Doctors of Doom are good at only selling you crap they would never dream of using themselves.

Why Stock Market Crash 1929 proved to be Buying opportunity

Do not deploy all your funds into the market when the bull is mature. Wait for a strong pullback before getting in.  Crowd psychology states that you should be wary when the masses are happy and vice versa.   You have to have stops in place, just in case the trade does not work out.  As the profits start to roll in, be smart and bank some of your gains. Set some of this money aside for future opportunities; for example, purchasing stock after a strong correction.

The markets have pulled back strongly;

Fear is in the air, and many strong companies are trading at attractive levels. The ball is in your court,  compile a list of strong companies you always wanted to get into and slowly commit some funds to them.  Or you could sit down and do what you have been doing all along and hope for a different outcome.  Doing the same thing over and over again and hoping for a new outcome could be construed as being insane. Hence any crash that bears resemblance to the 1929 Crash  should be embraced with gusto

Is the Coronavirus Crash Going To Be A repeat of 1929

When blood is flowing in the streets as is the case right now during this coronavirus pandemic, one should consider nibbling at stocks if one has a long term perspective. Do not deploy all your funds in one short but deploy them in lots this way if the stock dips lower your average entry price drops.

When we get into plays (at the Tactical investor) we don’t think in terms of days. Under normal market conditions, our minimum holding time is several months.  Under the current circumstances, our time frames lengthen as the potential for huge profits surges significantly. In the short term, it’s a bloodbath out there but is in such an environment that one finds outstanding opportunities and that also leads to the dawn of the next bull market.

It is easy to buy when the sun is shining, but the problem is that almost everything is being sold at a premium.  It’s when things appear gloomy that the best bargains are found.

Every crisis offers you extra desired power.
William Moulton Marston

Game Plan in the event of another 1929 Crash Type Event (April 2020)

This group could be getting ahead of themselves;  the investors that are already invested could be over-allocating funds because they have moved from the bullish phase to almost the euphoric stage. We already know that a large percentage are just sitting on the sidelines or betting against the market.  It is not a long term negative development, but if our hypothesis is valid, it could result in a sharp pullback over a short period, as over-exuberant individuals are the first ones to get nervous the moment it looks like the situation is changing.  However, this pullback will be a blessing in disguise as there is not enough firepower to crash the markets, and the sentiment is far from bullish.  Net-Net this is a long term positive development.  Market Update July 2, 2019

After looking at the charts and the sentiment, this is probably one of the best buying opportunities individuals have had since 1987. We say the best because this massive pullback did not occur on the back of bullish sentiment; the crowd was uncertain before Coronavirus was even an issue. Hence this pullback/crash took place on a note of uncertainty. It’s unprecedented as that has never occurred before, which means that the melt-up is going to be equally spectacular.

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Mob Psychology: Market Crash of 2016 buying opportunity (Feb 21)

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Currency wars explode: Negative interest rate wars start (Feb 15)

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Stock Market Crash 2017