Irving Fisher said stock prices had reached a “permanently high plateau” before the 1929 crash.
Fisher was a prominent American economist and one of the era’s best-known monetary and financial thinkers. In 1929, as stock prices climbed toward their September peak, he expressed confidence that the market’s high valuation reflected a lasting change in economic conditions. His statement became famous because the market soon moved sharply in the opposite direction.
The remark is often paired with Roger Babson’s warning, but the two men made different kinds of comments. Babson publicly predicted that a crash was coming, helping inspire the term “Babson Break.” Fisher instead offered an optimistic assessment of stock prices and their apparent permanence.
The Dow Jones Industrial Average peaked at 381.17 on September 3, 1929. After a volatile September, panic selling intensified in October, especially on October 24, 28, and 29. Fisher’s prediction is therefore remembered as a classic example of misplaced confidence immediately before a major financial collapse.