Panic of 1901: First stock market crash of New York Stock Exchange

1901

The Panic of 1901 was started because E.H.Harriman and James Hills, titans of rail road industry, wanted to control of Northern Pacific Railroad.

In those days they started buying share of Northern Pacific Railroad from open market quietly and as there was no regulation on such buying no one have any idea of it. In April 1901, E.H. Harriman started buying Northern Pacific Railroad stock quietly and stock rose 25% in a month time.

Since overall market is raising no one predict that takeover is happening in Northern Pacific Railroad. Some trader thought that Northern Pacific Railroad stock rising to fast and they started shorting it.

When someone short stock, he in fact borrowing security from someone else and selling it.  When price of security goes down person who shorted it, goes to market and buy at lower price.

But in this case as there are secretly buying was happening , stock continue it run and when on May 7, stock reach $143 and news floated what was happening behind the scene. When news came that Harriman is in race of buying, Hill and J.P Morgan try to stop him by putting in bids to buy stock as much as they could. Now it was open to all that it was race between Harriman and Hill, and sometime there are many people out there holding short position.

No one was selling and big buyers were forcing the price through the ceiling. Now shorter was caught in trap , they has to deliver the stock to whom they sold else the buyer can go to market and buy at market price and come back with bill to shorter. By the May 8 stock was trading $180 a share.

Next day fear and panic started in shorter and by noon shorter has bid the stock at $1000. When you have to have it, you have to have it.

Now at same time interesting thing was started in market, as shorts caught in very dangerous situation, they started selling other holding to raise money to cover their short position. Most of the other stock was down 10 to 20 points.  Panic continues on next day and most of the other stocks were down 40 to 60 points.

This was the classical example that single stock created rest all stock on down journey.  Same time there were few intelligent investor who has complete understanding of situation and got the opportunity to buy the stock that all are dumping because of their stupidity.

Article Inspired from book “Buffettology

Be Smart. Invest Smartly

Please follow and like us:
20

56 comments

  1. I抦 impressed, I must say. Really not often do I encounter a blog that抯 each educative and entertaining, and let me tell you, you’ve hit the nail on the head. Your idea is outstanding; the issue is something that not enough people are talking intelligently about. I’m very completely happy that I stumbled throughout this in my search for something regarding this.

  2. I actually wanted to write down a brief note so as to express gratitude to you for these lovely solutions you are giving out at this website. My extended internet lookup has at the end been rewarded with reasonable facts to share with my family and friends. I would state that that most of us site visitors are unequivocally blessed to exist in a superb site with many wonderful professionals with valuable secrets. I feel very fortunate to have discovered the web site and look forward to many more pleasurable moments reading here. Thanks a lot again for all the details.

  3. I would like to show some appreciation to this writer for rescuing me from this type of problem. Just after surfing throughout the internet and seeing principles which are not beneficial, I was thinking my entire life was gone. Existing minus the solutions to the issues you have solved by means of your guideline is a serious case, and the kind which could have negatively affected my entire career if I had not discovered your blog. Your actual capability and kindness in taking care of all areas was important. I’m not sure what I would have done if I hadn’t encountered such a solution like this. I can also at this moment look ahead to my future. Thanks for your time very much for this high quality and result oriented help. I will not be reluctant to endorse your web page to any person who needs to have support on this situation.

  4. I want to show some appreciation to the writer for bailing me out of this matter. Right after looking through the the web and getting ideas that were not helpful, I was thinking my entire life was gone. Living without the strategies to the problems you have resolved through your good post is a critical case, as well as those which might have in a wrong way damaged my career if I hadn’t noticed your web site. Your personal natural talent and kindness in handling all the pieces was useful. I am not sure what I would have done if I had not come across such a solution like this. I can at this point look ahead to my future. Thanks a lot very much for your specialized and amazing guide. I will not be reluctant to suggest the website to anybody who wants and needs tips about this subject matter.

  5. I抦 impressed, I need to say. Actually rarely do I encounter a weblog that抯 each educative and entertaining, and let me inform you, you’ve got hit the nail on the head. Your concept is outstanding; the problem is one thing that not enough persons are talking intelligently about. I’m very completely satisfied that I stumbled across this in my seek for one thing regarding this.

  6. I discovered your weblog website on google and check a number of of your early posts. Proceed to keep up the very good operate. I simply extra up your RSS feed to my MSN Information Reader. Seeking ahead to reading more from you in a while!?

  7. I would like to express my love for your kind-heartedness in support of men and women who have the need for help with this important situation. Your personal commitment to getting the solution all over appears to be exceedingly important and have truly empowered men and women like me to achieve their desired goals. Your new warm and friendly tips and hints entails a whole lot to me and extremely more to my fellow workers. With thanks; from each one of us.

  8. Aw, this was a very nice post. In idea I want to put in writing like this moreover ?taking time and precise effort to make a very good article?but what can I say?I procrastinate alot and not at all appear to get one thing done.

  9. My wife and i were really joyful that Ervin managed to carry out his research from your precious recommendations he grabbed out of your weblog. It’s not at all simplistic to just always be giving out procedures that many the rest may have been selling. We really understand we now have you to give thanks to for this. All the explanations you have made, the straightforward website navigation, the relationships you can help instill – it’s many superb, and it is letting our son in addition to the family reckon that that idea is satisfying, which is truly serious. Thank you for the whole thing!

  10. There are some fascinating time limits in this article but I don抰 know if I see all of them middle to heart. There is some validity but I will take hold opinion till I look into it further. Good article , thanks and we would like extra! Added to FeedBurner as well

  11. I simply had to say thanks again. I am not sure what I would have used in the absence of the entire advice discussed by you directly on such topic. It seemed to be a real traumatic matter for me personally, nevertheless spending time with a specialized technique you solved that forced me to weep over gladness. Now i’m happy for your guidance and then expect you realize what a great job that you’re putting in instructing men and women via your web site. I am certain you haven’t met any of us.

  12. Aw, this was a really nice post. In idea I wish to put in writing like this moreover ?taking time and actual effort to make a very good article?but what can I say?I procrastinate alot and under no circumstances appear to get one thing done.

  13. Youre so cool! I dont suppose Ive read anything like this before. So nice to search out any person with some original ideas on this subject. realy thank you for starting this up. this web site is one thing that is wanted on the net, somebody with a bit of originality. useful job for bringing something new to the internet!

  14. There are certainly plenty of details like that to take into consideration. That could be a nice point to carry up. I supply the ideas above as common inspiration however clearly there are questions just like the one you bring up the place an important factor will likely be working in honest good faith. I don?t know if best practices have emerged round issues like that, but I’m certain that your job is clearly identified as a fair game. Each boys and girls really feel the impression of only a moment抯 pleasure, for the rest of their lives.

  15. I enjoy you because of your whole effort on this web page. Kim take interest in working on research and it’s obvious why. A lot of people learn all regarding the dynamic tactic you offer reliable thoughts via the web site and even inspire response from the others on the concern while my princess has always been being taught a great deal. Enjoy the rest of the year. You’re performing a wonderful job.

  16. Nice post. I learn something more difficult on completely different blogs everyday. It would all the time be stimulating to read content material from other writers and follow a bit of one thing from their store. I抎 want to make use of some with the content on my blog whether you don抰 mind. Natually I抣l provide you with a link on your net blog. Thanks for sharing.

  17. I simply wanted to jot down a quick remark to express gratitude to you for all the precious points you are showing here. My time-consuming internet research has finally been honored with professional details to talk about with my two friends. I would assert that we site visitors are truly fortunate to exist in a great community with many outstanding people with interesting secrets. I feel pretty happy to have come across the webpages and look forward to really more fabulous times reading here. Thanks a lot once again for a lot of things.

  18. I抦 impressed, I have to say. Actually rarely do I encounter a blog that抯 each educative and entertaining, and let me let you know, you have hit the nail on the head. Your thought is excellent; the problem is something that not sufficient individuals are talking intelligently about. I’m very glad that I stumbled across this in my seek for something relating to this.

  19. I was very happy to search out this net-site.I needed to thanks for your time for this wonderful learn!! I undoubtedly enjoying each little bit of it and I’ve you bookmarked to take a look at new stuff you blog post.

  20. Thanks for all of your efforts on this web page. Kim delights in setting aside time for investigations and it’s obvious why. Most of us notice all regarding the powerful medium you render advantageous thoughts via your blog and even cause contribution from website visitors on that theme then our own simple princess is truly discovering so much. Take pleasure in the rest of the new year. Your doing a splendid job.

  21. A formidable share, I just given this onto a colleague who was doing just a little analysis on this. And he in reality purchased me breakfast because I found it for him.. smile. So let me reword that: Thnx for the deal with! However yeah Thnkx for spending the time to debate this, I really feel strongly about it and love reading more on this topic. If attainable, as you turn into experience, would you mind updating your blog with more particulars? It is extremely helpful for me. Huge thumb up for this weblog put up!

  22. I used to be very pleased to find this net-site.I wished to thanks to your time for this glorious learn!! I definitely having fun with each little bit of it and I have you bookmarked to check out new stuff you blog post.

  23. I wanted to compose you the bit of note to be able to thank you again for all the wonderful methods you’ve shown on this site. It was quite seriously generous with people like you to offer unhampered exactly what a few people could have offered as an ebook to earn some cash on their own, precisely considering the fact that you could have done it in case you wanted. The points additionally acted to be a easy way to be sure that some people have a similar keenness just like mine to find out good deal more with respect to this condition. I am certain there are many more pleasurable situations up front for individuals who read carefully your blog post.

  24. Oh my goodness! a tremendous article dude. Thanks Nevertheless I’m experiencing subject with ur rss . Don抰 know why Unable to subscribe to it. Is there anybody getting equivalent rss problem? Anybody who knows kindly respond. Thnkx

  25. The following time I learn a weblog, I hope that it doesnt disappoint me as much as this one. I imply, I know it was my option to learn, however I truly thought youd have something fascinating to say. All I hear is a bunch of whining about something that you can repair in the event you werent too busy on the lookout for attention.

  26. I intended to write you this little bit of word just to say thank you over again for the gorgeous opinions you’ve documented on this site. This has been simply pretty open-handed with people like you to allow unhampered all that a number of us would have made available as an electronic book to get some bucks on their own, mostly considering that you could have tried it in case you desired. The basics additionally acted to become great way to know that most people have a similar interest just like my very own to grasp somewhat more when it comes to this issue. Certainly there are some more enjoyable sessions in the future for individuals who read through your website.

  27. There are actually a number of particulars like that to take into consideration. That may be a great point to convey up. I offer the thoughts above as common inspiration however clearly there are questions just like the one you deliver up where an important thing will likely be working in sincere good faith. I don?t know if best practices have emerged round issues like that, however I am sure that your job is clearly identified as a fair game. Each girls and boys really feel the impression of only a moment抯 pleasure, for the rest of their lives.

  28. Oh my goodness! a tremendous article dude. Thanks Nevertheless I’m experiencing situation with ur rss . Don抰 know why Unable to subscribe to it. Is there anyone getting similar rss downside? Anybody who is aware of kindly respond. Thnkx

  29. I found your weblog website on google and test a couple of of your early posts. Continue to keep up the very good operate. I just additional up your RSS feed to my MSN News Reader. Searching for forward to reading more from you later on!?

  30. Thanks so much for giving everyone an extremely breathtaking chance to check tips from here. It can be very nice and jam-packed with amusement for me personally and my office colleagues to visit your site at a minimum 3 times in 7 days to read through the new issues you have. And definitely, I’m just always fulfilled considering the wonderful tactics served by you. Some 3 points in this posting are certainly the finest we’ve had.

  31. Aw, this was a very nice post. In idea I would like to put in writing like this moreover ?taking time and precise effort to make an excellent article?but what can I say?I procrastinate alot and on no account appear to get something done.

  32. There are some interesting deadlines on this article however I don抰 know if I see all of them middle to heart. There may be some validity however I’ll take maintain opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as nicely

  33. That is the best blog for anyone who wants to search out out about this topic. You notice a lot its virtually onerous to argue with you (not that I really would want匟aHa). You definitely put a new spin on a subject thats been written about for years. Great stuff, just great!

  34. I am just commenting to make you know of the excellent discovery our child encountered checking your site. She learned too many pieces, which included what it is like to have an incredible helping mindset to make the rest really easily know precisely specific complex topics. You truly did more than our own expectations. Thanks for rendering such invaluable, safe, edifying and fun tips on your topic to Gloria.

  35. Oh my goodness! an incredible article dude. Thanks However I’m experiencing concern with ur rss . Don抰 know why Unable to subscribe to it. Is there anybody getting an identical rss problem? Anyone who knows kindly respond. Thnkx

  36. An fascinating dialogue is price comment. I think that you need to write more on this subject, it might not be a taboo topic however typically people are not enough to speak on such topics. To the next. Cheers

  37. I have to voice my love for your kind-heartedness for those who should have help on that field. Your real commitment to getting the message around was quite practical and has continually made guys and women much like me to achieve their pursuits. Your new invaluable information implies so much a person like me and much more to my office workers. Many thanks; from all of us.

Leave a Reply

Your email address will not be published. Required fields are marked *