History’s Fastest Crash Is the High Price for Unbridled Optimism
- Fastest correction follows a frenetic run-up in share prices
- Both small and large investors were suddenly embracing stocks
A man wearing a face mask walks past statues of bulls in Beijing on Feb. 28.
Photographer: Mark Schiefelbein/AP PhotoIt’s a stat so shocking that it’s difficult to believe: In a century spanning the Great Depression and Financial Crisis, the current correction is the fastest ever. To understand how it happened, you need to recall how euphoric markets very recently were.
Hard as it is to remember now, as recently as two Wednesdays ago, with coronavirus headlines everywhere, Apple Inc. was capping off a rally that had added $600 billion to its value in eight months. Lookalike runups in all manner of tech megacaps pushed valuations in the Nasdaq 100 to a two-decade high. In just three months, Tesla’s market cap shot from $40 billion to $170 billion, while a pack of dodgy microcaps, hawking space vacations and fuels cells, were trading hundreds of millions of shares a day.