According to the history books one of the most scary events during the Cold War was the so-called Cuban missile crisis, where according to the history books the world was on the brink of nuclear armageddon.
However, the history books might be wrong – at least if you look at what happened to the US stock market during the crisis. If we indeed were on the brink of the third world war we would certainly have expected the US stock market to drop like a stone.
What really happened, however, was that S&P500 didn’t drop – it flatlined during the 13 days in October 1962 the stand-off between the US and the Soviet Union lasted. That to me is pretty remarkable given what could have happened.
There might be a number of reasons why we didn’t see a stock market collapse during the stand-off. Some have argued that the…
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