Page 46 - THE MARKET WHISPERER

44 PART 1 - Allow Me To Introduce You… To The Stock Exchange

of stocks and their prices outside the coffee house. This list is considered
the first milestone in establishing London’s stock exchange.

The First Bubble

Over the years to follow, several companies rose and fell, but the most
widely-known case was that of the South Sea Company, established in 1711
for the purpose of trade with South America. The company’s shares were
snapped up, their price rocketing upwards. Within a few years, it became
apparent that expectations of successful trading with “The New World”
were exaggerated, and in 1720 prices fell in one sudden drop, creating the
first bubble burst in history. In reaction, the British Parliament created
the “Bubble Act.” Enthusiasm for the stock exchange dissipated for several
decades. In 1789, stocks and bonds began to be traded in the United States.
More on that later.