Question

According to Mark Twain, why did he consider October to be a particularly dangerous month to speculate in stocks?

1) Because the stock market is usually volatile during that month
2) Because there are fewer trading opportunities in October
3) Because the stock market is closed for most of October
4) Because Mark Twain had a personal bad experience with stocks in October

Answer 1

Mark Twain considered October dangerous for stock speculation due to historical instances of market volatility, such as the 1929 crash, leading to significant financial downturns. Hence, option (1) is correct.

Step-by-step explanation:

According to Mark Twain, the reason he considered October to be a particularly dangerous month to speculate in stocks was because of historical patterns of market volatility. Twain jokingly suggested that, along with other notoriously challenging months for investors, October is risky due to historic financial downturns.

Specifically, the Stock Market Crash of 1929 began in late October, with Black Tuesday occurring on October 29, 1929, when stock prices collapsed. This crash led to massive financial losses and was part of the onset of the Great Depression. While Twain's comment was made in jest, it also carries the weight of historical truth, as October has seen several significant stock market downturns, including those in 1929, 1987, and other years.