Aug. 24, 2015 Flash Crash Lessons Learned

  • The market could fall apart quickly in a second
  • Stocks crashed to unbelievable lows at the open, even high-quality stocks
  • Brokerage websites had performance issues
  • Stocks recovered quickly from the lows as well, albeit they were still down
  • I only got 100 shares of KO and T at the low prices because the orders had been placed weeks ago. It was a pleasant surprise to snatch the shares.
  • The crash showed that my portfolio was not crush-proof. It’s very vulnerable. It’s a wake-up call to my complacency. I’ll sell stocks that I bought at high-cost basis when the market recovers to limit risk and relieve capital to buy when there’s a flash crash.
  • Place orders at my preset prices and leave them there. When they expire, place them again, so that they can be executed at the next flash crash.

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