Chapter 4: The Stock Market — Bubbles from Amsterdam to Wall Street
The Dutch East India Company sold the first shares in 1602. Within a century, tulip mania proved that markets go mad. From the South Sea Bubble to the 1929 crash, the stock market's history is a cycle of greed and panic.
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Amsterdam, 1602: The Dutch East India Company pioneered a revolution. Selling shares to the public allowed citizens to own a piece of a global empire. The world's first IPO.
The bustling Amsterdam Stock Exchange soon emerged. Traders, shouting in a lively courtyard, bought and sold paper certificates. A revolutionary idea: ownership was now transferable.
But new markets brought new dangers. In 1637, Tulip Mania gripped Holland. A single tulip bulb sold for a canal house's price, then the market collapsed overnight. The first recorded financial bubble.
A century later, the South Sea Bubble hit London. Shares in a company doing almost nothing rose 800%. Even Isaac Newton lost a fortune. Geniuses aren't immune.
The Roaring Twenties brought Wall Street to prominence. Ordinary Americans bought stocks on margin, believing everyone was getting rich. Until October 1929 changed everything.
The dream shattered. Ticker tape machines printed falling prices. Crowds gathered outside banks as life savings evaporated. The Great Depression followed, a stark reminder.
The pattern repeats. From dot-com to housing, and meme stocks, history shows the same psychology: 'This time is different.' Yet, the bubble always bursts.
