5 September 1929: The Babson Break

Economist Roger Babson told a business conference that a crash was coming and that it could be severe. When his remarks hit the news wires in the afternoon, stocks dropped sharply in what became known as the Babson Break. Many dismissed him as a perennial bear. Weeks later the crash came. He was right, but plenty of perennial bears are wrong for years before they are right.

The lesson: Even accurate warnings are hard to act on, and most market forecasters are wrong far more often.