1920's America's Roller Coaster
Stock Market "the thing to do"
Why was everyone doing it? "buying stocks"
In the 1920’s the stock market blew up. Stock prices went up and everyone was investing because of the era in the 1920’s being so enthusiastic to change the way of life, buying stocks was a easy way for people to make quick money.
What did this reveal about the people in the 20's?
This gave me an idea of a sort of greed that people had, they desired things that would not suit them. They risk their money into stocks not knowing the outcome just to be able to buy more things.
How did it work? What could be gained or lost?
- Orders come in through brokerage firms that are members of the exchange and flow down to floor brokers who go to a specific spot on the floor where the stock trades. At this location, known as the trading post, there is a specific person known as the specialist whose job is to match buyers and sellers.
- If a buyer buys a stock off margin and the stock increases in value then its easier to pay the broker back. However if the stock decreases then the buyer must pay the broker immediately. you can probably lose the money you invested or so you can win the money back and even more. Its like gambling in a way.
How does this lead to the crash?
People buying all types of stocks, companies would buy their own stocks. People thought that they would be able to win their money back no matter what because they thought that the stock market was a safe investment.
Is one to be greedy; covetous. The desire for possession.