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Blast from the Past: A Whole New World (November 1987)
On October 19, 1987 the S&P 500 index lost more than 20% in a single day. We thought it might be instructive to look back at what the Turnaround Letter said at the time.
On October 20, 1987 we sent out a special bulletin to subscribers with the advice: “Sit tight and then look for bargains when the dust settles.” Then in the November 1987 issue, we said, “Generally, we think this is a time for cautious buying and not selling…There should now be some good values in the marketplace, particularly in the turnaround area.”
This turned out to be pretty good advice. From its low on October 19, 1987, the S&P gained about 10% through the end of the year, and it rose 57% through the end of 1989. The gain from the 1987 low to the present is more than 500%--without even including dividends.