On this day, October 15, 2008, the DJIA dropped 733 points.

[mahatmakanejeeves]

https://en.wikipedia.org/wiki/October_15

• 2008 – The Dow Jones Industrial Average closes down 733.08 points, or 7.87%, the second worst percentage drop in the Dow's history.

[multigraincracker]

1. I remember this...

Ford Motor Company's (F) Lowest Stock Price: $0.8316 (on 11-19-2008). Silly me, I waited until it got back up to $1.79 to pull the trigger and bought 1,000 shares. Then again, I also bought 1,500 shares of a penny stock, magic belt.com that went belly-up.

[mahatmakanejeeves]

2. I remember it too. I owned shares of Washington Mutual, which had gone "poof" a few weeks earlier.

Washington Mutual



Washington Mutual logo

Washington Mutual, Inc—abbreviated to WaMu—was a savings bank holding company and the former owner of WaMu Bank, which was the United States' largest savings and loan association until its collapse in 2008.

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Rise and fall

"Wal-Mart of Banking"

Chairman and CEO Kerry Killinger had pledged in 2003: "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's, Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."

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Seizure by OTS and FDIC

By mid-September 2008, WaMu's share price had closed as low as $2.00. It had been worth over $30.00 in September 2007, and had briefly traded as high as $45 in the previous year. While WaMu publicly insisted it could stay independent, earlier in the month it had quietly hired Goldman Sachs to identify potential bidders. However, several deadlines passed without anyone submitting a bid. At the same time, WaMu suffered a massive run (mostly via electronic banking over the internet and wire transfer); customers pulled out $16.7 billion in deposits in a ten-day span.

This led the Federal Reserve and the Treasury Department to step up pressure for WaMu to find a buyer, as a takeover by the Federal Deposit Insurance Corporation (FDIC) could have been a severe drain on the FDIC insurance fund, which had already been hard hit by the failure of IndyMac that year. The FDIC ultimately held a secret auction of WaMu Bank, which was won by JPMorgan Chase. On the morning of Thursday, September 25 (which happened to be the 119th anniversary of WaMu's establishment), regulators informed officials at JPMorgan Chase that they were the winners.

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[A HERETIC I AM]

3. I remember Ford going lower than that.

Seems to me it got down to $0.53 at one point. There was the general feeling that all of the US auto makers were going to go belly up. The main difference for Ford was they weren’t as deep in the finance end of the business as GM was (Remember GMAC?)

I was a broker during those days, and I remember one morning before the open, the DJIA futures went “Limit Down” which was just unprecedented.

I also remember a day there was a 2000 point swing. It fell a thousand points within a short time after the opening bell and regained it all back during the rest of the day, closing within a few hundred points of the open.

Those were some incredible days to be watching it, to be sure.

In retrospect, here was just about the perfect play, selling stocks and buying bonds;

Say you had a $100,000 equity portfolio in September of 2007. If you had sold it all at or near the peak of the market and bought 30 year treasuries, you could have gotten that paper with a 5% coupon for around 92% of par if I remember correctly.

Hold those bonds till December of 2008 and the same ones you paid $920 a piece for were now worth $1300 a piece, PLUS you were paid $50 in interest per bond for holding them. That would have made you about $35K in profit.

Then turn around and bought Ford for anything near the level below $2, held those for 3 years and sold for $20 .

That would have resulted in a gain of close to $1.5 million, depending on when exactly you made the trades.