Thought experiment: I have a time machine, and I want to use it to get rich (and not by marketing it). However, owing to certain abstruse mathematics of the handwavium harmonics, I can only use it to visit the 1930s. My ethics (or sense of sportsmanship) will not allow me to actually bet on horseraces, the stock market, elections, or anything else of which I know the outcome in advance, but otherwise I have no qualms about using my superior historical knowledge of the period to make a killing in some field of business. I have $10,000 in period currency to invest. What should I do with it? What is a growth industry even during the Great Depression? The payoff must itself come during the Depression; buying up cheap land (or comic books, or baseball cards) that will be worth a fortune in 2015 won’t do.
Joe Kennedy Sr. made much of his fortune selling short. Much of it was based on insider information, which was legal at the time, but so would your sells be, in essence.
Regards,
Shodan
You could make a lot on bootlegging for the first 3 years or so.
It would be hard to get into bootlegging in the Depression. Organized crime had a lock on it and they didn’t like competition.
It was also too late to sell short; the market had bottomed.
There were very few industries where you could make money, since no one was able to buy your products. Perhaps making munitions and selling them overseas. Film production was a possibility – the big studios controlled distribution, but you could hire the top actors, writers, and directors before they hit it big and become another David Selznick.
Aviation. Buy TWA stock right after the Knute Rockne crash, then sell when Howard Hughes takes it over. Or, if you consider that unethical, then just buy aviation stocks. If you have heard of the company in 2015, then you know it survived the Depression.
Motion picture studios. Likewise, if you have heard of the name today, you know it survived.
Your ground rules leave me a little unclear on what you are and are not allowed to do.
The reality is, if you were alive in 1932 and still had money to invest (unfortunately, a lot of people didn’t), you could hardly go wrong. All kinds of asset prices were insanely depressed in 1932. The stock market quadrupled between 1932 and 1937; just buy any kind of index fund and you were golden. The challenge would be to find industries that didn’t grow off of a 1932 baseline.
Lots of soup kitchens back then. Put your money in ladles and bowls.
How liquid were stocks in 1937? I assume that you could sell most anything then…but in 1938, the market turned down again. If you invested in stuff that people could afford (cheap movies (Joe Kennedy again), low cost restaurants, you might do well. But any real gains had to wait for WWII (1941).
If you learn some basic chemistry, I imagine that there’s a few illicit substances that exist today that would go over like gangbusters during the Depression. Obviously, the morality of such a thing is debatable. But if you’re able to build up a decent sized organization before the mafia tracks you down, you could probably survive and prosper.
Maybe start on the West Coast, so you’re not immediately running up against the big city bosses.
Yep. Booze, Drugs and Whores will get you rich any time.
“Invent” and patent stuff before the actual inventor gets around to it. Picking ones that would pay off in the down economy to keep funding follow invention that becomes big later is the hard part since you don’t have all that much seed.
Old joke:
*A young man asked an old rich man how he made his money.
Morris, the old guy fingered his worsted wool vest and said, "Well, son, it was 1932. The depth of the Great Depression. I was down to my last nickel. So I invested that nickel in an apple. I spent the entire day polishing the apple and, at the end of the day, I sold the apple for ten cents. The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them at 5:00 pm for 20 cents. I continued this system for a month, by the end of which I’d accumulated the sum of $1.60…
Then my wife’s uncle Bernie died and left us two million dollars."*
Take two apples.
Well radio was growing. Maybe sell and repair radios. Mahjong and almost anything Oriental was popular.
Buy some comic books and baseball cards then put them in a sealed, airtight package away from direct light.
I understand the condom business did well. Wiki: [INDENT]In 1932, Margaret Sanger arranged for a shipment of diaphragms to be mailed from Japan to a sympathetic doctor in New York City. When U.S. customs confiscated the package as illegal contraceptive devices, Sanger helped file a lawsuit. In 1936, a federal appeals court ruled in United States v. One Package of Japanese Pessaries that the federal government could not interfere with doctors providing contraception to their patients.[10] In 1938, over three hundred birth control clinics opened in America, supplying reproductive care (including condoms) to poor women all over the country.[2]:216,226 Programs led by U.S. Surgeon General Thoman Parran included heavy promotion of condoms. These programs are credited with a steep drop in the U.S. STD rate by 1940.[2]:234[/INDENT] And here’s your market opportunity: [INDENT]More attention was brought to quality issues in the 1930s. In 1935, a biochemist tested 2000 condoms by filling each one with air and then water: he found that 60% of them leaked. The condom industry estimated that only 25% of condoms were tested for quality before packaging. The media attention led the U.S. Food and Drug Administration to classify condoms as a drug in 1937 and mandate that every condom be tested before packaging. [/INDENT] Bankruptcy law was the place to be in the early part of the depression, but a time traveler wouldn’t add any value there. Hollywood did well - people liked escapist fare.
Ah. Following DinoR, “invent” antibiotics. You will become both rich and a hero.
ETA:
…or publish Hemingway’s novels before he writes them. That might get you in trouble with the Time Lords though.
Almost all sports grew. Baseball, pro football and basketball. Boxing was very big.
Not exactly -
Regards,
Shodan
I got the notion for this thread from reading Heinlein’s To Sail Beyond the Sunset. Maureen Johnson Smith and her husband manage to save their fortune from the crash because Lazarus Long has warned them of it – but, as she remarks, “The Depression was not a fun time to be rich.” And from reading about the Depression and how it seemed to affect everything, every sector of the economy. It got me to wondering, is there such thing as a depression-proof industry or business sector? Something that grows even in a depression? And now I have some answers – booze, drugs, whores, sports, condoms, and apples.
It was a great time to be poor !
Auntie Mame: You left a car running? In the Depression???
Beauregard Jackson Pickett Burnside: Ah’m in oil, ma’am. It just keeps gushin’.
My grandfather’s father was an accountant during the depression. Grandpa was born in 1924. While the family wasn’t rich by any means (unless someone squandered it all before grandpa got it!), my grandfather always insisted that his family was not hit very hard during the Depression because his dad always had a job. He never had any stories to tell about going hungry or quitting school or having bare feet.