Which Stocks Recovered First After the Great Depression? The Gold Miner That Rose While the Dow Fell 89%
After the worst crash in American history, which stocks came back first — and how long did it actually take?
Gold miners never fell at all. The first climbers off the bottom were a thermostat maker and a soft-drink company. And the famous "top 10" list of Depression winners is mostly a story about World War II, not the recovery.
The Dow Jones Industrial Average fell from 381.17 on September 3, 1929, to 41.22 on July 8, 1932 — a loss of 89%. Prices did not climb back above the 1929 peak until November 23, 1954. Yesterday's briefing covered how much the market fell and what came next. This one answers the follow-up question: which stocks led the way back, in what order, and what the numbers actually say. All figures are as of November 14, 2026, unless noted otherwise.
First, three different meanings of "first"
"Recovered first" has three answers, and mixing them up is why most articles on this question mislead.
The search results for this question mostly repeat one list: the ten stocks with the biggest returns from 1932 to 1954. That list answers a different question than the one people type into Google. Here are the three versions, separated:
- Rose during the crash: stocks that went up while the market fell 89% — gold miners, for a specific legal reason.
- Climbed first off the bottom: the biggest early gains of the 1932–37 rebound, measured in months, not decades.
- Made the most by 1954: the 22-year winners — a list dominated by companies that supplied a war.
The stocks that never fell: gold miners
Homestake Mining is the closest thing to a stock that skipped the Depression.
The mechanism was legal, not mysterious. The price of gold was fixed by law at $20.67 an ounce, so a gold miner's selling price did not fall while deflation cut its costs. Then the government changed the price in the miners' favor. Executive Order 6102, signed April 5, 1933, forced Americans to hand in private gold. The Gold Reserve Act, signed January 30, 1934, then raised the official price of gold from $20.67 to $35 an ounce — a 69% increase overnight.
Homestake, owner of the mine in Lead, South Dakota, was the purest way to own that windfall. Its shares climbed from about $71 in 1920 to $528 by 1940, according to a history of the stock, and it paid a dividend in 53 straight years — every year except 1920. The gold it pulled from each ton of ore nearly doubled in value, from $3.77 in 1925 to $6.17 in 1930, as the company improved recovery while the gold price stayed fixed.
Two caveats keep this honest. First, Homestake was thinly traded, so its rise is not a template any investor could have copied at scale. Second, the metal itself did not rise during the crash — $100 in gold at the start of 1928 was worth $100.24 at the end of 1932, according to NYU professor Aswath Damodaran's long-run return data. The miner's gain came from the 1934 revaluation and its dividends, not from gold's price while the market fell. And for most Americans, the miner was the only legal route: owning gold bullion had been outlawed in 1933.
The first climbers off the bottom, 1933–1937
From the July 1932 bottom, the Dow rose more than fourfold in under five years — and the early leaders were not the names you would guess.
The Dow passed 190 in February 1937, up from 41.22 at the bottom. The whole market moved, not just a few stocks: $100 invested in the S&P 500 at the start of 1928, with dividends reinvested, was worth $50.66 at the end of 1932 and $145.38 at the end of 1936 — nearly tripled in four years, and already above where it started in 1928.
William O'Neil's list of the 100 greatest stock winners from 1880 to 2009 names the fastest climbers of that rebound:
- Minneapolis-Honeywell: +987% in 170 weeks, starting in 1933 — thermostats and controls, a company selling small equipment into homes and factories.
- Coca-Cola: +565% in 165 weeks, starting in 1934 — a nickel drink people kept buying. The company did a 4-for-1 stock split in 1935, in the depths of the Depression, which only happens when a share price has run up enough to need splitting.
- Deere & Co: +307% in 104 weeks, starting in 1935 — farm equipment, rising as farm incomes recovered.
What they shared was not a sector. It was a price. All three had been crushed with everything else, then sold products people still needed at prices people could still pay. That is the pattern of a rebound led by the cheapest survivors, not by a single industry.
The famous top-10 list — and the trap inside it
The most-shared list of Depression winners measures 1932 to 1954 — and most of what it measures is World War II.
The list comes from the Center for Research in Security Prices at the University of Chicago, via SmartMoney and the Motley Fool. It ranks stocks by total return, dividends reinvested, from the 1932 bottom to 1954:
Three of the top ten were defense companies — Electric Boat, Douglas Aircraft, and Minneapolis-Honeywell — and five more supplied the war effort in some form. A stock bought in 1932 that returned 55,000% by 1954 earned most of it after 1941. Nobody in 1932 could have forecast that, and the list says nothing about which stocks recovered first. It says which ones were standing in the right place when a war arrived.
The missing sector is the other half of the lesson. Not one financial stock made the top 50, after roughly 9,000 banks failed between 1930 and 1934. The survivors did not soar; the sector was too damaged. Buying the bottom mattered more than picking the winner: Ibbotson Associates' data, cited by the Fool, shows that stocks bought at the start of 1932 multiplied more than 15 times over the next 22 years — and even buyers from 1931, just before a further 71% drop, broke even in under five years.
The recovery that didn't last: 1937–38
The first recovery ended in a second crash — the market lost more than half its value in about a year.
From the March 1937 peak to the bottom a year later, stocks fell more than 50%. The S&P 500 fell 35.34% in 1937 alone. That $100 in stocks, worth $145.38 at the end of 1936, was worth $94.00 at the end of 1937. The early leaders fell with everything else.
The widely cited explanation is that the Federal Reserve tightened too soon — raising reserve requirements while the government cut spending — and choked a fragile recovery. That is the reading Bridgewater's Ray Dalio popularized as the "1937 scenario," and it is a plausible account, not a settled fact. Either way, the sequence matters: "first to recover" is a timing fact, not a safety rating. The stocks that came back first had to survive a second crash before the recovery stuck.
What this history does and doesn't prove
Three things the numbers support — and one they don't.
- Timing mattered more than picking: the whole market nearly tripled from the end of 1932 to the end of 1936. Buying near the bottom beat buying the "right" stock at the wrong time.
- Dividends did heavy lifting: with dividends reinvested, a buyer from 1931 broke even in under five years — years before the price-only Dow regained its 1929 peak in 1954.
- The winners list is a mirror, not a map: the 1932–54 leaders won on a war nobody could have forecast in 1932. Reading them as a guide to the next recovery mistakes hindsight for foresight.
- "First" is not "safe": the 1937 relapse cut the rebound in half within a year. Recovery is a process with setbacks, not a single date.
This is history, not a guide to buying anything today. The companies are different, the rules are different — the FDIC did not exist in 1929, and gold has not been fixed at $35 an ounce since 1971 — and the next downturn, if one comes, will have its own leaders. The overview that opened this series and the look at what the U.S. pays in interest on its debt both make the same point from different angles: the warning signs are real, and so are the safeguards that did not exist in 1930.
Key Takeaway
The stocks that recovered first were not the biggest companies or the cheapest index. A gold miner rose while everything fell, because the law fixed its selling price and then raised it. A thermostat maker, a soft-drink company, and a tractor maker led the climb off the bottom, because they sold things people still needed. And the famous list of 55,000% winners is mostly a war story, not a recovery story — with a second crash in 1937 waiting for anyone who thought the comeback was finished.
The lesson is not which names to remember. It is that "first" depends on the dates you choose — and the dates you choose decide the answer.
Sources
• Aswath Damodaran, NYU Stern — Historical Returns on Stocks, Bonds and Bills, 1928–2022: pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histret.html
• Motley Fool — "The Top 10 Depression Stocks" (CRSP data via SmartMoney; Ibbotson Associates): fool.com/investing/value/2009/08/04/the-top-10-depression-stocks.aspx
• William O'Neil, "How to Make Money in Stocks" — 100 greatest winners, 1880–2009: threadreaderapp.com/thread/1598053457667260419.html
• Gold Reserve Act of 1934: en.wikipedia.org/wiki/Gold_Reserve_Act
• New Low Observer — Homestake Mining history: newlowobserver.com/category/hm/
• Ben Carlson, A Wealth of Common Sense — "Market Returns During Ray Dalio's 1937 Scenario": awealthofcommonsense.com/2015/03/market-returns-during-ray-dalios-1937-scenario/
• Motley Fool — Coca-Cola stock-split history: fool.com/investing/2022/06/16/you-wont-find-a-more-impressive-stock-split-stock/
Comments
Post a Comment