It is difficult to convey to a modern audience the emotional impact of the stock market’s gyrations in the 1980s, or indeed in any distant decade, because the most popular measures of market value have grown so much in the intervening years.
For example, on the worst day of the 1929 crash, the Dow Jones Industrial Average lost about 38 points, an insignificant move in modern markets. But on that day, the Dow had opened at just under 300 points, so that 38-point drop represented an unprecedented 12.8 percent decline. That record stood until the crash of 1987.
Similarly, the Dow’s daily point swings in this story may sound unremarkable at a time when the index is calculated in five digits. At this writing in early 2017, the Dow has surpassed 20,000 points, but for much of the early 1980s, the index hovered between 1,000 and 1,500 points. To feel the modern punch of the market’s gyrations in those years, double the long-ago Dow points and add a zero—thus, a loss of just 50 points back in early 1981 would be roughly equal to a 1,000-point drop in early 2017. For Dow point changes for the years after January 1987, when the index hit 2,000 points for the first time, just add a zero to the older figure—thus, a 100-point drop in late 1987 loomed as large as a 1,000-point drop today. This rule of thumb, while not precise, will give some sense of how people in the 1980s perceived the market’s historic moves. Of course, the percentage changes can provide a more exact comparison.
Time also has blurred the scale of monetary sums cited in this story. To get a general sense of the modern magnitude of those figures, triple the dollar amounts before 1985 and, thanks to declining inflation, double the dollar amounts after 1985.