The Dow Jones Industrial Average

Kindleberger and Aliber (2015) point out in their book Manias, Panics and Crashes that in 1928 the market value of transactions on the NYSE increased by 36%.  In the first eight months of 1929 they were up by 53% expressed as an annual rate.  A similar rise was observed for the late 1990s – see chart.

Dow Jones Industrial Average price chart (line) and volume (bars)

In the late 1990s the substantial rise in Dow trading volume indicates that “investors rushed to get on the train even as it accelerated. As long as outsiders were more eager to buy than the insiders were to sell, the prices of securities increased.” (K&A, p45)

NASDAQ – the tech shares

A 41% rise in volume for NASDAQ shares in 1998 was followed by a doubling over the next 15 months – see chart.

NASDAQ index chart (line) and volume (bars)…………………………………………………………………………………………….

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