Definition: The stock market crash of 1929 was the worst crash in U.S. history. By Friday, the situation was so out of control that the decision was made to close down the stock market. Eventually dreams and reality have to be reconciled, and that means some kind of crash. Though the market ended on a positive note on Thursday, there was still some panic among the people. The value of the shares is strengthened further by stock splits and as icing on the cake this value of the shares was enlarged again in the Dow Jones Index, because behind the scenes the formula of the Dow Jones was adjusted due to stock splits.
Generally speaking, crashes usually occur under the following conditionscitation needed: a prolonged period of rising stock prices and excessive economic optimism, a market where Price to Earnings ratios exceed long-term averages, and extensive use of margin debt …