CBC Digital Archives

Stock Market: The power of perception

It was in 1929 that the volatile and powerful nature of the stock market first became clear. That year's market crash and ensuing decade-long depression revealed the vital, yet fragile nature of this system, and its tremendous power over world economies. The centre of that complex web has always lain in New York City, and what happens in the U.S. has usually had direct, and sometimes disastrous effects on Canadians. The CBC Digital Archives looks back on 50 years of coverage from 1958-2008, covering the crashes, "corrections," peaks and valleys of the stock market.

One scary and almost surreal aspect of stock markets is that, for all the power and importance they have on world economies, they are easily affected by human emotion, opinion and perception. There are few better examples than on this day in 1981, when Joe Granville, a respected market analyst, triggered a massive selling spree that sent markets in Toronto and New York into a nosedive, and saw a record 93 million shares traded in the U.S. How did Granville do it? Two words: "sell everything." In this CBC-TV clip, Fred Langan reports on a weird and wild selling frenzy that illustrates the sensitivity of the markets.
• The selling spree was set off by Joe Granville's January 1981 newsletter, which advised investors to "sell everything". It was later described by Business Week magazine as "a mindless wave of selling that destroyed billions of dollars in stock value from a forecaster who drops his pants in public to get attention."

• This was not an idle insult from Business Week. Granville once famously dropped his pants in front of surprised investors to read market quotes printed on his underwear.

• Rumour and innuendo are equally powerful influences on the stock market. One infamous case occurred in 2008 when a false story appeared on CNN's "citizen journalism" site iReport, which allows unedited and unverified stories to be posted online. A contributor posted a story claiming Apple CEO Steve Jobs had suffered a heart attack. Apple stock plummeted 10 per cent within minutes, hitting a 17-month low.

Medium: Television
Program: The National
Broadcast Date: Jan. 7, 1981
Guest(s): Bill Bristow, Joe Granville, Terry McKolskey
Host: Knowlton Nash
Reporter: Fred Langan
Duration: 2:02

Last updated: February 7, 2012

Page consulted on February 25, 2014

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