5 Astonishing Facts About the Stock Market
The global economy is evolving at an unprecedented speed, but the stock market has withstood the test of time: despite the constant changes, it remains as one of the most appealing and exciting parts of the financial world.
Author:James PierceReviewer:Alberto ThompsonFeb 07, 20222.4K Shares409.2K Views
The global economy is evolving at an unprecedented speed, but the stock market has withstood the test of time: despite the constant changes, it remains as one of the most appealing and exciting parts of the financial world.
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While the stock market has a long-standing history, much of it is still mysterious. We are unveiling five interesting facts about the stock market that won’t fail to surprise you. Read on to find out more.
The Stock Market Has More Than 400 Years Of History
The concept of a regulated marketplace where transactions of investments take place originates from medieval France. As early as in the 11th century, agricultural debts were traded in the European country. In the 16th century, a more developed debt market was established in Belgium.
The Dutch East India Company started the world’s very first stock market in 1602. The firm issued paper shares, which were traded on the Amsterdam Stock Exchange. The Amsterdam Stock Exchange is now known as Euronext.
The South Sea Bubble Was The First Ever Stock Market Crash
The 1720 South Sea Bubble was the first stock market bubble recorded in history.
The South Sea Company was a British joint stock company established in 1711. It specialised in supplying slaves to the Spanish Empire.
The 1713 Treaty of Utrecht granted Britain the rights to supply slaves to Spanish America. The South Sea Company took over the contract from the British government at an astounding £9,500,000. The sum represented a considerable share of the national debt of Britain.
It was widely believed that the slave trade after the end of the War of the Spanish Succession would be tremendously profitable. However, there was no sign of the much anticipated trade explosion.
Although the South Sea Company was far from making the profits it had promised, it continued to sell its stock at inflated prices. Eventually, the bubble burst in September 1720. By December, the stocks had lost 80% of their value at their height.
Numerous investors were ruined as a result of the South Sea Bubble, including Isaac Newton and Jonathan Swift. The House of Commons ordered an inquiry, revealing the sheer scale of bribery and corruption.
Joseph de la Vega’s Confusion of Confusions is the world’s oldest book about stock trading. Published in 1688, the book introduces four basic principles when approaching the stock market that are still relevant today.
De la Vega’s first rule of stock trading is to never advise anyone to buy or sell shares. He believes that counsels should not be put on airs, and that the ‘most benevolent piece of advice can turn out badly.’
His second principle is to accept both profits and losses. Favourable circumstances do not last. Therefore, it is wise to ‘take every gain without showing remorse about missed profits.’ In his third principle of stock trading, De la Vega compares profits on the stock market to the treasures of goblins. ‘At one time they may be carbuncle stones, then coals, then diamonds, then flintstones, then morning dew, then tears.’
De la Vega highlights the dynamic and volatile nature of the stock market. No trading profits are permanent.
Last but not least, De la Vega points out that winning the game of stock trading requires both patience and money.
The First Book Written On Stock Trading Was Published Over 300 Years Ago
Joseph de la Vega’s Confusion of Confusions is the world’s oldest book about stock trading. Published in 1688, the book introduces four basic principles when approaching the stock market that are still relevant today.
De la Vega’s first rule of stock trading is to never advise anyone to buy or sell shares. He believes that counsels should not be put on airs, and that the ‘most benevolent piece of advice can turn out badly.’
His second principle is to accept both profits and losses. Favourable circumstances do not last. Therefore, it is wise to ‘take every gain without showing remorse about missed profits.’ In his third principle of stock trading, De la Vega compares profits on the stock market to the treasures of goblins. ‘At one time they may be carbuncle stones, then coals, then diamonds, then flintstones, then morning dew, then tears.’
De la Vega highlights the dynamic and volatile nature of the stock market. No trading profits are permanent.
Last but not least, De la Vega points out that winning the game of stock trading requires both patience and money.
The Stock Market Is The Worst In September
September is historically the worst month of the year for the stock market.
The average stock market return of September since 1928 is -0.1%. Since 1950, the Dow Jones Industrial Average suffered an average decline of 0.8% in September. The S&P 500 has an average decline of 0.5% during the same period.
There Is A Pirate Stock Exchange In Somalia
Established in 2009 in the forgotten fishing town of Harardhere, Somalia, the Pirate Stock Exchange enables locals to invest in hijacking missions. Investors can profit from ransoms of up to $10 million when a pirate mission is successful.
There are currently more than 70 distinct maritime operations listed on the Pirate Stock Exchange, which operates 24 hours a day.
James Pierce
Author
James Pierce, a Finance and Crypto expert, brings over 15 years of experience to his writing. With a Master's degree in Finance from Harvard University, James's insightful articles and research papers have earned him recognition in the industry.
His expertise spans financial markets and digital currencies, making him a trusted source for analysis and commentary. James seamlessly integrates his passion for travel into his work, providing readers with a unique perspective on global finance and the digital economy.
Outside of writing, James enjoys photography, hiking, and exploring local cuisines during his travels.
Alberto Thompson
Reviewer
Alberto Thompson is an acclaimed journalist, sports enthusiast, and economics aficionado renowned for his expertise and trustworthiness. Holding a Bachelor's degree in Journalism and Economics from Columbia University, Alberto brings over 15 years of media experience to his work, delivering insights that are both deep and accurate.
Outside of his professional pursuits, Alberto enjoys exploring the outdoors, indulging in sports, and immersing himself in literature. His dedication to providing informed perspectives and fostering meaningful discourse underscores his passion for journalism, sports, and economics. Alberto Thompson continues to make a significant impact in these fields, leaving an indelible mark through his commitment and expertise.
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