20 YEARS AGO TODAY

I still remember it like it was yesterday. It was 20 years ago today. I was an anchor/reporter at the CBS station in Columbus Ohio. I didn't have a lot of friends with tons of money in the market, but I did know a lot of people who looked at their 401K's differently after this day 20 years ago. It will always be remembered as Black Monday. I worked an evening shift at WBNS at the time. I reported to work and watched the wires as Wall Street continued its meltdown.

The Dow Jones took it's biggest single day hit ever. The market fell 508 points. That may sound like a lot, but back then it was a huge hit, the Dow lost 22 percent. To put things in perspective the equivalent today would be a drop of over 3 thousand points. People who invested in the market were bleeding, it looked bad, very bad.

I was assigned to do a story on the dramatic drop. I remember as I was heading out the door to talk to a local broker an assignment editor asked bleakly "Has anyone heard of a guy named Louis Rook-e-lie-ser." It took me about 2 seconds to translate what she was saying, she meant Louis Rukeyser.

I was the first to say yes I knew who he was, "Why?" She responded, "Well he's in town and is willing to talk to reporters and has scheduled a press conference for a half hour from now."

Since I knew who he was I got the chance to race out of the building to go to the news conference. It was a hastily called news conference. Louis looked a little preoccupied. I don't remember a lot of the details about the news conference, other than Rukeyser leaving periodically to jump on the pay phone to see how much money he was losing. This of course was before cell phones. The real reason the day stands out is because of one question and one response. I'd like to say that I asked the question, but I didn't.

Reporter: If you don't mind me asking, how much have you lost today?"

Louis smiled broadly, and then answered.

Louis: "Plenty!"

That was followed by laughter, which ended when he continued his response.

Louis: "But there are real values out there! The only difference between me and lots of people today is this, I will get back in and buy some undervalued stocks, others will get out for good. A couple weeks from now I'll make back what I lost and then some."

He silenced the laughter. It was the most important economics lesson I have ever learned. He was right of course. A lot of people got out, spooked by what had happened on Wall Street. I remember friends of mine tried to play games with their 401K's to try to recover their losses in a hurry. But it was apparent to me after that news conference that Wall Street is a place for people who know what they are doing.

That day made me remember a dinner party that my wife and I attended in Carmel California. My wife worked for a brokerage firm in Monterrey and we were at the home of one of the brokers. I remember talking to him about how horrifying it was to watch the Challenger disaster. He looked at me and told me how right after the disaster he was able to make a killing by short selling. Don't ask me how it works, but I assure you the man knew what he was talking about. It made me think, man I don't think I could even think like that. While the rest of America was aching and crying he was grabbing his phone, placing orders, and figuring out a way to capitalize on what happened. I never could look at the man the same way after that conversation.

Those were my first economics lessons, I got my graduate degree at the Legg Mason tennis tournament a few months back. Trevor and I went to the tourney and sat next to a friend who is a broker. He summed up the markets this way.

Broker: "The middle class and the poor will always stay that way, and the rich will always get richer. The markets are designed for them. When the market goes down they'll figure out a way to make money, when it goes up they'll figure out a way to make money. That's because they always have someone working to make sure their money makes money." He felt strongly that the middle class are like mice in treadmills, the poor are just hoping to get on the treadmill some day.

Louis Rukeyser died in 2006, but I know he and others who had an understanding of the market cried just a little on this day 20 years ago. Then they set about figuring a way to make back their money and then some. There is little doubt they did.