On October 19, 1987 -- Black Monday -- the Dow suffered its worst single-day loss in history. MarketWatch's Chuck Jaffe writes that today, twenty-five years later, everybody who was there still remembers that day -- even if they don't remember how much they lost.

For his latest column, Jaffe spoke with Vanguard founder Jack Bogle, Lipper founder Michael Lipper and current Zebra Capital Management chair Roger Ibbotson about their memories from Black Monday.

Bogle recalled taking 106 of the more that 10,000 phone calls that flooded the office. Afterward, he institutec a "Swiss Army" policy in which everybody at Vanguard, execs included, "not only had to be a citizen but a soldier." Translation: everybody is a phone rep during crises.

But the real lesson from Black Monday, Jaffe writes, is the market's quick recovery -- in the following weeks it "went on its merry way," as Bogle said.

Jaffe gives the last word to Vanguard's founder:

I can’t tell you what the market is going to do next, and I agree that there are a lot of scary things out there. But I know that the value of good businesses will keep on growing, and that it will be higher in the future than it is today. If you can hang on through the tough times — if you don’t just do something, you stand there — you will get to look back and laugh at how these things made you nervous and all of the mistakes you might have made if you let the news and the headlines and the emotions get the best of you.

 

Edited by: Chris Cumming


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