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? asked in Business & FinanceInvesting · 2 months ago

What sort of things were people buying on margin prior to the Great Depression?

I know that buying on margin was one of the key reasons for the crash of 1929. I m curious to know though what they were buying. Were they pouring a ton of money into a single stock, like for example a 1929 equivalent of Tesla? Or were they still diversifying among many assets including bonds, stocks, and commodities?

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  • Anonymous
    2 months ago
    Favorite Answer

    Back then, the terms were much different. It only took 10% down with the rest on margin. People on that kind of margins did not generally have diversified well rounded portfolios.  When many bought stock, they did not really buy stock, they just gave their down payment to a bucket shop. The stock traded against them and they lost their money.

    https://en.wikipedia.org/wiki/Bucket_shop_(stock_m...

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  • Erik
    Lv 7
    2 months ago

    they didn't have Tesla back then

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  • Mercy
    Lv 7
    2 months ago
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  • 2 months ago

    Transports, primarily Railroads began a tear in about 1830, by 1920s they were being squeezed by a more diversified economy but still a significant sector and really shrank in significance at the great depression. 

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