Charles Merrill and the 1929 market crash

Charles Merrill and the 1929 market crash
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After the devastating market crash in 1929, what decisions did Charlie Merrill make that helped the market and his business, and were any decisions made that were detrimental to his business and the market’s financial security?
Charles Merrill was an extraordinary and productive investor who had incredible skill in market analysis and investment. He was the first investment banker to predict that chain stores would come to overtake retail shops. He is credit for the spearheading the merger that led to the creation of Safeway food chain stores; There are close to 3500 Safeway food chain stores in America. His competency in market analysis helped him to predict the 1929 market crash long before it came to pass (Nocera, n.d). The knowledge helped his company and clients to plan on how to weather through the crash when the market depression hit. This paper will analyze the decisions he made before and after the devastating market crash.
Charles Merrill discovered that the market was overpriced and predicted its plunge in early 1928. Most Americans had borrowed money and invested in stocks (Nocera, n.d). Merrill wrote a letter advising his clients to liquidate their holdings. He also advised them to settle their debts as an economic depression was looming (Nocera, n.d). As a move to protect his investment, Merrill liquidated part of his Merrill Lynch Company’s stock portfolio. The company had over 20 million dollars cash credit when the market crash hit.

The liquid cash helped to strengthen the company’s reserve throughout the depression period.
After the depression, Charles Merrill went into early retirement. He got out of the stock brokerage business. In fact, he turned 5 million dollars of his company to E. A. Pierce and Co. The depression pushed him to become a passive investor. The growth of his empire stagnated until 1940’s when he decided to come back from retirement (Nocera, n.d). The move to retire early slowed the growth of his investment hence slightly affecting his financial security.
Reference
Nocera, J. Charles Merrill and the 1929 market crash. Time.