Promenent Moments of Financial Speculation Explained in Devil that the Hindmost: A History of Financial Speculation”

As Chapter 10 questions, if further evidence continues to surface that capital markets do not always behave in accordance with the efficient market hypothesis, then should we reject the research that has embraced the EMH as a fundamental assumption? In this regard we can return to earlier chapters of this book in which we emphasised that theories are abstractions of reality. Capital markets are made of individuals and as such it would not (or perhaps, should not) be surprising to find that the

From the late sixteenth century up until the end of eighteenth century, Dutch Republic attracted numerous migrants from other European countries (Van Lottum, 2007). The province Holland became a global center for trades, culture and science during this period, which is what we call “Dutch Golden Age” now. A reflection of the flourishing economy in Holland is the Dutch East India Company (VOC), which was sponsored by not only the government but also Dutch citizens. It raised 6.5 million guilders at that time about three million euros which were worth billions at the time. With the money, they started the company and overseas expansion. Moreover, in 1609, the first stock exchange was born in Amsterdam. The stockholders of VOC could convert their

If a ship did not make it to the country the investor lost everything. Joint-stock companies were not a reliable trade route, especially if one had to rely on a ship to make it to the

The Rise of the Speculator, by Emily Lambert - This book tells the story of the two largest futures exchanges in Chicago, Chicago Board of Trade and the Chicago Mercantile Exchange. This book divided into 3 parts. First part is about trading in agriculture products such as grain, soybeans, eggs, onions, pork bellies and cattle. At first Chicago Board of Trade was just a group of businessmen. But in 1856, the Board of Trade had several hundred members and the trading room had grown crowed because of the trading of grain and corn. Second part is about financial product such as currencies, options, mortgages, bonds and stocks. Third part is about oil, euro dollars, bund and carbon.

Let's take a look to General Motors (GM) for inspiration. This company formed the foundation for it's beginnings on September 16, 1908 with William "Billy" Durant, a leading manufacturer of horse-drawn vehicles in Flint, MI. At its infancy, GM held only the Buick Motor Company. Throughout the years, GM would grow to acquire 20 plus companies including Oldsmobile, Cadillac, and Oakland, (otherwise known as Pontiac).

Moreover, it deals with the immediate opening problem of the case: the market’s response to the PacifiCorp announcement. Finally, it should help to motivate a discussion of Buffett’s investment philosophy.

It was previously assumed that economic investors and regulators (agents) utilised all available information and thus market prices were a reflection of this information with assets representing their fundamental value, encouraging the position that agents’ actions were rational. The 2007-2008 Global Financial Crisis (GFC) is posited to have originated from the notion that all available information was utilised, causing agents to fail to thoroughly investigate and confirm “the true values of publicly traded securities,” leading to a failure to register the presence of an asset price bubble preceding the GFC (Ball 2009).

Throughout the text of the book, you will read about different bubbles that occurred in history. Some of these bubbles have happened in the last ten years and some have happened in the last three hundred years. One of the most interesting bubbles that I read about was “The South Sea Bubble”. The South Sea Company in England was formed in 1711 to create confidence in the government’s ability to meet its debts and promises. This company took a government debt (IOU) for ten million pounds. In return, the government was given monopoly over all trade to the South Seas (Malkiel, Page 41). People thought there would be a lot of opportunity to make money during this time. In 1720, the entire national debt, which was thirty one million pounds, was capitalized. The stock rose from 130 pounds to 300 pounds when the bill was introduced to Parliament. After bill became the law, the South Sea Company sold a new issue of stock at 300 pounds. There were fights that broke out by investors who wanted to purchase this new stock price at a proposed installment offer.

Coming out of the recession from the crash was not an easy task, and without some crucial events we would have never came out of it. “President Roosevelt issued Proclamation 2039 ordering the suspension of all banking transactions, effective immediately until it was decided by the government to be a safe bank to gain Americans trust back” (Wall Street). This stopped everyone from hating banks after all the money lost people did not trust banks, and with no one putting money in the banks they were closing. When a bank was government approved to be safe people weren’t so wary of putting money in it anymore, and because the president made a law so their money would not be completely lost if it closed. “Though the relief and reform measures put into place by President Franklin D. Roosevelt helped lessen the worst effects of the Great Depression in the 1930s, the economy would not fully turn around until after 1939, when World War II kicked American industry into high gear” (Stock Market Crash of 1929). Without the war it would've taken many more years to recover, and fix all the mistakes. The war brought money into the economy because every type of factory started either turning into a war one churning out

Leyeles’ poem “Wall Street”, is from the perspective of Wall Street itself. It talks about how it has become one of the most powerful cities of all time. Its control of the American people is only to be rivaled with the control of Ashurbanipal, Alexander, Tamerlane, and Bonaparte. An obvious connection to Wall Street is what people go there for, money. In the first and third stanza, the color “yellow” comes up to describe money and how much of an influence it has over people.

Biographers of Walpole, including historian J.H. Plumb, traditionally deny any role by Walpole in the South Sea Bubble. To display his inactive role in playing the stock market during the bubble, Plumb noted that Walpole had sold all of his stock in the South Sea Company by March 18, 1720, and did not invest in the company again until its height in June. Thus, he was not financially involved in the South Sea Company in the months that it grew the most. Compared with many of his fellow members of parliament, including Aislabie, Walpole was not heavily invested, nor did he demonstrate any better knowledge of the stock’s performance—which might have indicated insider knowledge—than anyone

The aim of the report is to use different valuation techniques to see if the current share price of Tesco plc is fair, undervalued or overvalued. Some of the findings will be compared with other firms in the same industries and share holders will be informed on whether they should buy, hold or sell.

This book discusses speculation and how it has shaped the western world. The book spans from the Romans to Modern day but in keeping with the theme of this course observations will be restricted to the pre 1900 section as much as possible. The book focuses on western economies as the Asian world considers the whole stock trading for profit as being ruinous to a healthy economy. Individual profit taking does not contribute to the wealth of the community. Oddly modern Japan is viewed as a western culture and its economic woes of the late 80s is a sign that that it fell afoul of the demons of western capitalistic greed. (my portfolio is like a

Niall Ferguson clearly illustrates several economic principles and findings that are also illustrated in our Macroeconomics class. These concepts are seen in Episodes 5 and 6 of The Ascent of Money of money series. “Safe as Houses” and “A Financial History of The World” are both episodes that Ferguson uses to emphasize concepts that are also seen in our Macroeconomics. Some of the concepts that are seen in these episodes are property ownership and the finances that come with the ownership of property. Because of these two episodes it is easy for me to understand these concepts.

7. The merit of paying by stock is it does not need to increase company’s debt and would not cause any liquidation issues. On the other hand, paying by cash is a quicker way than by stock. It would not cause earnings dilution and ownership loss. Moreover, paying by cash can produce tax shield to the company. In this case, FAHZ held 88.1% of Antarctica’s voting common stock and it was exempt from taxation. Besides, delays in the process may threaten the survival of Antarctic. So FAHZ preferred a cash offer. On the other hand, Brahma’s stock price might be undervalued, so the amount of consideration to be paid may change depend on the form of payment.