I watched the Extra Credits series on the South Sea Bubble. In it, they mentioned people bought stocks in the South Sea company as a debt (20% down and paid off the rest of the price over two months) and then borrowed money from the South Sea Company itself to buy even more shares in the South Sea Company. This ultimately got a LOT of people in massive amounts of debt after that market bubble burst, and openned the way for a crafty man named Robert Walpole to basically take over Britain.
This made me wonder, what stupid things did people do before the great crash of 1929 to get into the stock game?
There was a similar practice by major companies and banks in the U.S. As industrialization began to increase many people, specifically factory owners and middle-class families, found themselves with enough money to survive but not thrive. These people sought fortune elsewhere this was at the same time as the "Myth of The Stock Market" started to garner fame. What I mean by that is, people started seeing the stock market as a guaranteed investment, and many investors assured their clients that there was almost no chance they could lose money. However, huge companies like J.P. Morgan or Ford were too expensive for the average family so investors would sell 10% of the stock and when it increased, and the client wanted to pull out they'd make a percentage. If the client failed to pay, the banks still had 90% of the stock as collateral. This practice made investing accessible to almost everyone but kept power in the hands of banks.
Another stupid practice was buying stocks based on "Image over Profit." Yes, clients were literally advised to buy stocks based on how well a company looked rather than how well it did economically. When these companies fell through investors were left with nothing causing a massive panic where almost everyone started pulling money out of the market and their bank.
On the business side, as the stock market began to collapse companies would buy their own stocks to try and artificially inflate their value. Companies basically re-bought their companies value just to have it plummet drastically. In some cases, stocks would drop in value 37.5% in just one day!
[Sources] (http://ic.galegroup.com/ic/uhic/ReferenceDetailsPage/ReferenceDetailsWindow?disableHighlighting=false&displayGroupName=Reference&currPage=&scanId=&query=&docIndex=&source=&prodId=UHIC&search_within_results=&p=UHIC%3AWHIC&mode=view&catId=&u=a13qu&limiter=&display-query=&displayGroups=&contentModules=&action=e&sortBy=&documentId=GALE%7CCX3611000866&windowstate=normal&activityType=BasicSearch&failOverType=&commentary=) - "Stock Market Crash of 1929." Gale Encyclopedia of U.S. Economic History, edited by Thomas Riggs, 2nd ed., vol. 3, Gale, 2015, pp. 1269-1271. U.S. History in Context