Monday, September 17, 2001
Steamboat Springs The Dow Jones industrial average suffered its largest one-day point drop ever Monday when it opened for the first time since last week's terrorist attacks.
But while the Dow was falling 684.81 points, people in Northwest Colorado were holding their ground, local brokers said.
"It was very orderly," said Paul Epley of Institutional Capital Management in Steamboat Springs. "I talked to all of my clients during the last two to three days and we just held the course. If this holds up, we'll probably be buying stocks" in the near future, he said.
"We had record volume," said Doug Davis of Edward Jones in Craig. "The market worked and it worked smoothly.
"We had almost no sellers in Craig, Colo., and we had a significant amount of buyers. That was so good to see. They held their resolve."
Epley said he heard from several people who were contemplating stock purchases just to do their part to shore up the market. But Epley advised against it.
"I tell them, 'Let's buy stocks when it's time to buy stocks,'" he said. "We'll have plenty of time to make a statement later."
Epley said his hope is that people who had been planning to go out and buy a car today still go out and buy that car.
Davis said he wouldn't advocate buying stocks to make a political statement it would make more sense to purchase a flag (if you can still find one at the store) and wave it. However, he said he was happy to see several of his clients who had been considering investing in well-established companies for the long haul decide that today was the day to do it.
"They told me they weren't getting in to take advantage of the market," Davis said. "They said, 'I'm not going to buy defense stocks and I'm not going to buy the stocks that have gone down the most.' But I've known these people for many years. There was no need to tell me that."
Davis said the only client who asked him to sell stock did so to purchase shares of another company.
Davis said he was most impressed with the fact that the stock market's infrastructure held up on a day when an astounding 2.3 billion shares changed hands.
Epley said his approach to investing clients' funds is consistent "I try to follow the flow of money," he said. While some stocks were previously overvalued, Epley said, there are now many that are grossly undervalued.
Epley said that in general, he is a laissez-faire capitalist, but in this case, he would advocate the federal government stepping in to support the nation's airline industry.
"That industry has been fragile for a long time and this is an unusual situation," Epley said.
Epley pointed out that there's a difference between the biggest point loss sustained by the New York Stock Exchange on a single day and the biggest percentage loss. Monday's loss was the biggest in terms of points lost in a day, but the biggest single percentage loss came on Black Monday in October 1987.
Davis said he was impressed with the unprecedented move by the Federal Reserve board to step in and lower prime lending rates by a half-point right before the stock market opened.
Epley said the Federal Reserve killed the bull market with interest rate hikes and he expects to see it continue to lead the recovery with interest rate cuts like the half-point it shaved before Monday's opening bell on Wall Street.
"This was a day of serious concern about the future of our markets over both the short term and the long term," Davis said. "It was good to see people's response."