South Seas Trading company was a joint stock company, was formed in 1711 at the peak of the war of the Spanish Succession.
South Seas, at that time referred to the continent of South America, which was majorly controlled by Spain and Portugal.
South Seas, at that time referred to the continent of South America, which was majorly controlled by Spain and Portugal.
But the fun part was, when the company was formed, the company had no business. Yes, the British Govt gave it the sole trading rights for slaves in the South Seas, but, as the area was controlled by Spain, no trade was possible.
The War ended but nothing happened.
Then the Brits and Spanish fought another war. That war ended in 1720.
Now that peace came, South Seas went to town saying they had sole rights for all the gold booty that was there in the South Seas.
Then the Brits and Spanish fought another war. That war ended in 1720.
Now that peace came, South Seas went to town saying they had sole rights for all the gold booty that was there in the South Seas.
The result was a frenzy, that was seen only in 17th century Netherlands for buying Tulips.
The stock price went from £100 to £1000, in two months.
In fact the frenzy was so high, that the world's most intelligent human being, Sir Isaac Newton, also got into it.
The stock price went from £100 to £1000, in two months.
In fact the frenzy was so high, that the world's most intelligent human being, Sir Isaac Newton, also got into it.
He got in early, sold off and made a cool profit of £7000.
Post that, I guess he boasted about it on the 18th Century Twitter equivalent and lived happily ever after.
But the share price kept going up and up and dind't stop. So Newton went in again.
All's well right?
Post that, I guess he boasted about it on the 18th Century Twitter equivalent and lived happily ever after.
But the share price kept going up and up and dind't stop. So Newton went in again.
All's well right?
So after all the war and peace, when the South Seas reached out to Spain for all the Free Gold, Spain obviously said no.
In Unparliamentary words that too.
Which is when the Shares collapsed. It went from £1000 to little over a hundred, in about 15 days, wiping out millions.
In Unparliamentary words that too.
Which is when the Shares collapsed. It went from £1000 to little over a hundred, in about 15 days, wiping out millions.
Our friend Issac, got another lesson in Gravity, when he lost £20000 pounds, (Which is about $3 million in today's money).
The worst part is, people knew that there was no way Spain would give South Seas exclusive access to the South American booty.
But they went in anyway
The worst part is, people knew that there was no way Spain would give South Seas exclusive access to the South American booty.
But they went in anyway
You see any parallels in today's world? Valuation of an asset is based on a future event where it will be legalized? People making a lot of money off it, initially and then deciding to go all in?
But then, Sir Issac got caught in it. Who the hell are we?
But then, Sir Issac got caught in it. Who the hell are we?
Disclaimer : This more of an abridged version of the history of the South Seas trading company. There are plethora of papers explaining the story and how it went down.
Read it if you want the full version.
Read it if you want the full version.
Another request: I know many of you think Crypto is the future, it is undervalued, we need to get in early on it, its here to stay, etc etc.
But please don't borrow or mortgage to invest in Crypto. However attractive it may be. Please don't
But please don't borrow or mortgage to invest in Crypto. However attractive it may be. Please don't
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