Business Adventures

Business Adventures will teach you how to run a company, invest in the stock market, change jobs, and many other things by sharing some of the most interesting experiences that big companies and their leaders have had over the last century.

This week, I lost $1500 in the stock market, but I know this Coronavirus crash is only temporary. Take the 1962 flash crash. If you had been in a coma between May 28 and May 31 of that year, you wouldn’t notice much change to your investments. But you’d have missed out on one of the biggest events in stock market history-the 1962 Flash Crash.

Everyone was already in an abysmal mood already. There had been 6 months of dropping prices across the market by the time the end of May rolled around. It didn’t help that they had to update stock prices manually. And on the morning of May 28, they were running late.

After realizing that the true prices of stocks were 45 minutes behind, investors began to panic. They assumed that the price had fallen and they didn’t know about it, so many began quickly selling. Prices began to spiral and the resulting crash decimated about $20 billion worth of stock value.

Knowing the Dow Jones couldn’t go below 500 points saved everyone though. Once it got low enough, they began buying quickly. Within a couple of days, the entire market made a full recovery.

It just goes to show how unpredictable the stock market is. You can count on investors behaving irrationally and according to their mood, which is often wrong.

Have you ever heard of the Ford Edsel? If you haven’t it’s no wonder, it was one of the ugliest cars ever. It was also one of Ford’s biggest failures. The first mistake the company made was misjudging the market. The American car industry was going strong in 1955. People were making more money and could afford more medium-priced cars. Ford wasn’t doing much in this sector, so they began planning the Edsel to fix that. But after the three years it took them to finish the car, the market had shifted 180 degrees. A slowing economy and changing trends made cheaper cars more popular. Another problem with the Edsel was Ford’s marketing of the automobile. They bet big, investing $250 million into getting it ready. And the company advertised this point. Consumer expectations were high, but when the car finally came out it was just another vehicle like all the others out there. Customers were even finding the technical aspects of the car were full of issues. Ford had spent so much on studying the market that they failed to get the automobile…