13 October 1989: Friday the 13th mini-crash
News that banks would not finance a leveraged buyout of United Airlines' parent UAL sent the Dow down about 190 points, roughly 7 percent, in the final hour of trading. Buyout speculation had been propping up many stocks, and the deal's collapse let the air out. The drop revived memories of 1987, but the market recovered quickly. Junk-bond-fueled takeover mania, however, was entering its final act.
The lesson: Prices propped up by someone else's financing can fall the moment the financing does.
What it meant for investors
$1,000 in United Airlines (old) at the start of 1990 → $0 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. United Airlines (old) went to zero, so the position is worth nothing at all; the index turned the same money into $19,429.
What United Airlines (old) teaches: Owning shares in your own employer concentrates your risk: your job and your savings can disappear in the same downturn.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $60.00 | $0 | $19,429 |
| 1995 | $45.00 | $0 | $14,783 |
| 2000 | $78.00 | $0 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought United Airlines (old)? Every starting year and the full story →
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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