Wall Street: Where's Bottom?

Ever since Wall Street's Blue Monday crash, economic sages ranging from mutual fund managers to Treasury Secretary C. Douglas Dillon have been recalling the late John J. Raskob's half-forgotten rule of thumb (TIME. June 1) that even the stock of a promising company should be priced at no more than 15 times the company's per share earnings. If that ratio held, the warning ran, the Dow-Jones industrial average would have to sink to 540. Last week it fell even farther than that; in five days of almost unbroken decline's, it dropped to 539.19, the lowest closing since Oct. 28, 1958.


Want the full story?

Subscribe Now


Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!