KEY POINTS:
The headline in the New Zealand Herald on October 21, 1987, screamed: "Dive into the unknown". It was the day after the biggest stock market crash the world had seen since 1929.
Global markets were in a state of "unbridled panic", the report declared in language the media did not use lightly 20 years ago.
There is no doubt that people knew this was a big deal at the time.
The immediate fallout was probably greater than a similar sized crash would be today.
Through 1986 and 1987 New Zealanders had dived in to the unknown of stock market trading with enthusiasm that has never yet been rivalled in this country.
By the time of the crash, Brierley Investments had 160,000 New Zealand shareholders - about 5 per cent of the population.
Nearly everyone knew someone who had taken a big hit on the day.
But shareholders that week were at least buoyed by the belief that this was a temporary correction.
"It could almost be described as good news," said Brierley's deputy chairman, Bruce Hancox, on October 20. "Suddenly we are being offered certain stocks [in the US] which we previously could not get hold of."
Optimism is a necessary pre-requisite for any one involved in trading of any kind.
If you don't have some faith in the market then you will never invest - and history proves you'd be the loser in the long-term game.
So Hancox' comments shouldn't be sneered at. Even though Brierley Investments never really recovered.
Property investor Bob Jones - who (on paper at least) lost $65 million on the day - was remarkably unfazed by events. After the close of trading on "Black Tuesday" he told the Herald that the crash had been "a fascinating study of human behaviour".
Later, he encouraged investors to stick with the market if they wanted to get rich.
A year later his advice must have appeared foolhardy. Twenty years later he is unquestionably correct. Nobody got rich by putting their money in a bank.
"The average small investor is not stupid," said Craig Heatley, then the 31-year-old chief executive of Rainbow Corporation. "While small investors' confidence may have suffered I don't think they have abandoned the equity market."
But New Zealand investors were scared off - in droves. And the country is the poorer for it. Many never went back, missing out on golden opportunities such as the state asset floats of Telecom and Contact Energy.
Those who opted out for good have also missed out on the boom of the past six years, which has seen the NZX-50 rise more than 150 per cent. No small feat considering the damage done to Telecom in that period.
And despite the credit crunch sparking an unnerving fall through August and early September, the NZX-50 is still up 6 per cent for the year and not far off its record high.
In short, the market has been a star in the past few years. Sadly, most of the returns generated by this decade's boom have headed overseas.
The majority of New Zealand investors have leveraged themselves up to invest in property or have deposited their money with finance companies.
It's easy to look through old newspaper file clippings of the era with smug superiority. New Zealand inevitably looks a more innocent place in 1987. Investor behaviour seems naive and unrealistic.
But to view history with the benefit of hindsight is neither fair nor accurate. People were basing their decisions on the information they had.
Investors are still not immune to forgetting about risk as they chase higher returns. The finance company collapses of the past 18 months have shown that.
Even on the market there will always be new investors, prone to getting burned on speculative stocks. Last year's Plus SMS debacle springs to mind. And the most safety-conscious investors must still be aware that markets won't always rise.
Globally there still are risks around a US recession and the Chinese investment boom.
Sharemarket speculation in China right now smacks of New Zealand in the '80s. Mum and dad investors are driving the market to unrealistic heights on a similar kind of belief that the only way stocks can move is up.
If the Chinese bubble bursts with anything like the speed that Western markets melted down in 1987 then the whole world will feel it.
At that time ... For the record, the Business Herald's editor was - like Mark Weldon - at high school when the market crashed. At least, that's if the surf wasn't up at Sumner beach that day. But whether we were in the market at the time or not, we all lived through the fallout of those events.
The crash sparked the recession of the late '80s, the Government Budget cuts that followed in the early '90s and, ultimately, the poor levels of New Zealand ownership on the NZX that leave our best companies ever vulnerable to foreign takeover.
It could be argued that the KiwiSaver scheme and the PIE tax changes - to encourage investment in managed funds - are only now starting to repair the damage that was done in 1987.
Black Monday in the Northern Hemisphere. Black Tuesday in Australia and New Zealand.
Whatever day you choose to remember and however you chose to remember, the events of that week 20 years ago changed the course of New Zealand history.
