Joe Kennedy is the father of former president John F. Kennedy.

Joe made most of his money in the stock market. He traded stocks in the roaring 20s when there was little regulation and "anything goes" attitude surrounding all of Wall Street.

Joe famously avoided the Great Depression, and stock market crash of 1929. He sold his entire portfolio days before the crash. But how did he do it? This one anecdatoe explains it all:

"Joe Kennedy exited the stock market in timely fashion after a shoeshine boy gave him some stock tips. He figured that when the shoeshine boys have tips, the market is too popular for its own good.

A theory also advanced by Bernard Baruch, another vested interest who described the scene before the big Crash: "Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day's financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929." - Fortune Magazine, When Shoeshine Boys Talk Stocks

(http://www.autoadmit.com/thread.php?thread_id=3848753&forum_id=2#35075584)

Before this crash, the stock market peaked on September 3 with the Dow Jones Industrial Average (DJIA) at 381.17. The ultimate bottom was made on July 8, 1932, where the Dow stood at 41.22. From peak to trough, this was a loss of 89.19%. There was more pain in small-cap and speculative stocks, many of which declared bankruptcy and were unlisted from the market. It was not until Nov. 23, 1954 that the Dow reached its previous peak of 381.17. (For more, see An Introduction to the Dow Jones Industrial Average.)

The stock market crash of 1929 and the ensuing Great Depression certainly altered an entire generation's perspective and relationship to financial markets. In a sense, it was a total reversal of the attitude of the Roaring '20s, which had been a time of great optimism and economic growth.

In the first half of the decade, companies were doing excellent business exporting to Europe, which was rebuilding from the war. Unemployment was low, and automobiles were spreading across the country, creating jobs and efficiencies for the economy. Until the peak in 1929, stock prices went up by nearly ten times.

The economic growth created an environment in which speculating in stocks became almost a hobby, with the general population wanting a piece of the market. Many were buying stocks on margin in ratios as high as three to one, meaning they were putting down $1 of capital for every $3 of stock they purchased. This also meant that a loss of one-third of the value in the stock would wipe them out.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money. In mid-1929, the economy stumbled due to excess production in many industries, creating an oversupply. Essentially, companies were able to acquire money cheaply due to high share prices and invest in their own production with the requisite optimism.

This overproduction eventually led to oversupply in many areas of the market such as farm crops, steel, and iron. Companies were forced to dump their products at a loss, and share prices began to falter. Due to the number of shares bought on margin by the general public and the lack of cash on the sidelines, entire portfolios were liquidated and the stock market spiraled downwards.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

People were not buying stocks due to fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money.

(http://www.autoadmit.com/thread.php?thread_id=3848753&forum_id=2#35075667)

Child's play.

(http://www.autoadmit.com/thread.php?thread_id=3848753&forum_id=2#35075676)