1 00:00:10,560 --> 00:00:14,000 Speaker 1: Hello, and welcome to another episode of the Odd Blots podcast. 2 00:00:14,120 --> 00:00:18,079 Speaker 1: I'm Tracy Allowin and I'm Chill so Joe. You know, 3 00:00:18,160 --> 00:00:22,000 Speaker 1: we just recorded that podcast with Lee Drogan where we 4 00:00:22,000 --> 00:00:25,319 Speaker 1: were talking about tech stocks and earnings. Right. Yeah. I 5 00:00:25,360 --> 00:00:28,520 Speaker 1: really like that one and is another one of one 6 00:00:28,560 --> 00:00:30,960 Speaker 1: of our podcasts, and they're kind of rare for what 7 00:00:31,000 --> 00:00:33,920 Speaker 1: we do, where we actually talk about markets right now, 8 00:00:34,360 --> 00:00:36,800 Speaker 1: as we're going, as are happening, because we often sort 9 00:00:36,800 --> 00:00:40,000 Speaker 1: of talk about esoteric stuff that doesn't directly involve the 10 00:00:40,080 --> 00:00:41,920 Speaker 1: day to day. So I like that we got a 11 00:00:42,000 --> 00:00:45,559 Speaker 1: chance to actually talk about what's happening right now, give 12 00:00:45,600 --> 00:00:49,600 Speaker 1: the listeners something useful. I really dispute the notion that 13 00:00:49,680 --> 00:00:53,279 Speaker 1: we talked about esoteric stuff, But as I say that, 14 00:00:53,400 --> 00:00:57,240 Speaker 1: I realized that I'm about to start talking about esoteric stuff. 15 00:00:57,560 --> 00:01:01,040 Speaker 1: Well that podcast about Cracy Crazy, do you know that? 16 00:01:01,400 --> 00:01:04,640 Speaker 1: Do you know what our podcast is called Odd Thoughts, 17 00:01:05,280 --> 00:01:12,280 Speaker 1: But that's about bond trading? Okay, yeah, but we all know. Okay, 18 00:01:12,319 --> 00:01:17,240 Speaker 1: that episode about tech stocks got me thinking about I 19 00:01:17,280 --> 00:01:21,640 Speaker 1: guess companies and company earnings throughout history, and I was 20 00:01:21,680 --> 00:01:25,920 Speaker 1: sort of thinking on a very meta level, almost every 21 00:01:25,959 --> 00:01:29,800 Speaker 1: company is a tech stock, right because winners throughout history 22 00:01:29,959 --> 00:01:34,640 Speaker 1: are companies that have either invented new technology or used 23 00:01:34,680 --> 00:01:38,520 Speaker 1: it to the best effect. Right, Yeah, absolutely, And I 24 00:01:38,560 --> 00:01:41,040 Speaker 1: think Lee made that point as well, that really we're 25 00:01:41,040 --> 00:01:44,240 Speaker 1: not seeing an emergence of tech stocks per se. What 26 00:01:44,280 --> 00:01:47,600 Speaker 1: we're seeing is an incredible use of technology across a 27 00:01:47,720 --> 00:01:51,800 Speaker 1: range of industries that allows essentially capital to have incredible 28 00:01:51,920 --> 00:01:55,360 Speaker 1: leverage over labor. And what we call tech stocks like 29 00:01:55,440 --> 00:01:58,760 Speaker 1: your Netflix is and your facebooks are really the companies 30 00:01:58,920 --> 00:02:01,840 Speaker 1: that are at the most extreme dream and of being 31 00:02:01,840 --> 00:02:05,960 Speaker 1: able to get incredible amounts of output without that much 32 00:02:06,280 --> 00:02:09,600 Speaker 1: that many people working for them exactly. So after I 33 00:02:09,639 --> 00:02:12,919 Speaker 1: started thinking about that, I started thinking about what a 34 00:02:13,280 --> 00:02:16,240 Speaker 1: you know, tech stock per se would look like, say 35 00:02:16,360 --> 00:02:19,280 Speaker 1: a hundred or two hundred or three hundred years ago, 36 00:02:19,440 --> 00:02:22,080 Speaker 1: Like would it be a company that I don't know 37 00:02:22,200 --> 00:02:27,080 Speaker 1: was inventing like new methods of producing railroad spikes or 38 00:02:27,560 --> 00:02:29,880 Speaker 1: you know, something like that. Would that be considered a 39 00:02:29,919 --> 00:02:33,840 Speaker 1: technology company and would investors react to it in a 40 00:02:33,919 --> 00:02:38,760 Speaker 1: similar way that they would to a Facebook or an Amazon. Now, 41 00:02:39,320 --> 00:02:42,960 Speaker 1: luckily for us, there's someone out there who thinks a 42 00:02:43,000 --> 00:02:46,120 Speaker 1: lot about this, so that we don't have to Um 43 00:02:46,160 --> 00:02:49,040 Speaker 1: and his name is Jamie Catherwood. A lot of people 44 00:02:49,120 --> 00:02:54,560 Speaker 1: might know him as finance history guy. Uh. Yeah, there's 45 00:02:54,560 --> 00:02:57,960 Speaker 1: he's on Twitter, he's on Medium, and he's always producing 46 00:02:58,000 --> 00:03:03,640 Speaker 1: these amazing articles about incredible episodes from financial history. I 47 00:03:03,680 --> 00:03:06,520 Speaker 1: saw he tweeted something I think it was just yesterday 48 00:03:06,560 --> 00:03:09,680 Speaker 1: about the I p O of the Guinness Beer Company 49 00:03:09,720 --> 00:03:12,440 Speaker 1: and how people talked about that and how oversubscribed it 50 00:03:12,560 --> 00:03:16,520 Speaker 1: was and that was in there. And so looking back 51 00:03:16,560 --> 00:03:20,320 Speaker 1: at financial history, you really do. It's it's sort of 52 00:03:20,360 --> 00:03:22,840 Speaker 1: confirms I think what is one of our general themes 53 00:03:22,880 --> 00:03:26,880 Speaker 1: that to some extent nothing ever changes. And so Mania 54 00:03:26,960 --> 00:03:30,400 Speaker 1: is about what we call tech stocks today presumably have 55 00:03:30,520 --> 00:03:33,080 Speaker 1: many echoes in the past as well, exactly, and so 56 00:03:33,200 --> 00:03:35,960 Speaker 1: we're going to talk about exactly those echoes. And I 57 00:03:36,000 --> 00:03:38,480 Speaker 1: should just say that Jamie has also been a multiple 58 00:03:38,680 --> 00:03:41,720 Speaker 1: listener request for an All Thoughts interview, So I'm glad 59 00:03:41,760 --> 00:03:45,480 Speaker 1: we're finally making it happen. Uh. Jamie Catherwood, a k a. 60 00:03:45,680 --> 00:03:48,840 Speaker 1: Finance history Guy. His real life job as an analyst 61 00:03:48,920 --> 00:03:52,960 Speaker 1: over at Arthur J. Gallagher and Company. Jamie, it's so 62 00:03:52,960 --> 00:03:55,000 Speaker 1: good to have you on. Thank you so much for 63 00:03:55,040 --> 00:03:57,880 Speaker 1: having me. So I guess just to begin with, I'd 64 00:03:57,920 --> 00:04:02,040 Speaker 1: be really curious to get some insight into how you 65 00:04:02,080 --> 00:04:06,640 Speaker 1: became finance history guy and what exactly piqued your interest in, 66 00:04:06,800 --> 00:04:10,520 Speaker 1: you know, going back to stories from the sixteen hundreds 67 00:04:10,560 --> 00:04:14,920 Speaker 1: and even earlier to talk about finance and investing. Yeah, 68 00:04:14,960 --> 00:04:18,160 Speaker 1: so I've always been a history that um I did 69 00:04:18,720 --> 00:04:23,120 Speaker 1: history as my major at King's College, London, and I 70 00:04:23,160 --> 00:04:27,679 Speaker 1: became interested in finance. And after joining Twitter, I saw 71 00:04:27,720 --> 00:04:31,400 Speaker 1: that a ton of people were putting out content related 72 00:04:31,440 --> 00:04:34,600 Speaker 1: to you know, just to investing finance in general, but 73 00:04:34,920 --> 00:04:39,960 Speaker 1: no one had kind of focused on history itself and 74 00:04:40,040 --> 00:04:43,719 Speaker 1: just financial history. So I figured I can't compete with 75 00:04:43,960 --> 00:04:46,120 Speaker 1: the people who have been doing finance for decades or 76 00:04:46,160 --> 00:04:48,760 Speaker 1: investing and you know, much smarter than I am. But 77 00:04:49,120 --> 00:04:53,640 Speaker 1: I can bring the history aspect because that's what I 78 00:04:53,720 --> 00:04:56,039 Speaker 1: kind of know. So it was just kind of finding 79 00:04:56,040 --> 00:04:58,360 Speaker 1: my own niche. And I'm lucky that no one else 80 00:04:58,400 --> 00:05:01,040 Speaker 1: was doing it because if they were, I'm sure it 81 00:05:01,040 --> 00:05:03,040 Speaker 1: wouldn't have worked out as well for me. Because there's 82 00:05:03,040 --> 00:05:05,120 Speaker 1: some really good writers out there on Twitter. I like 83 00:05:05,240 --> 00:05:07,919 Speaker 1: that this This goes to my theory of life alpha 84 00:05:08,279 --> 00:05:12,200 Speaker 1: of the idea of finding some profitable niche to exploit 85 00:05:12,240 --> 00:05:15,719 Speaker 1: that other people aren't doing and sort of putting yourself 86 00:05:15,839 --> 00:05:18,360 Speaker 1: out there and uh yeah, making hay in a way 87 00:05:18,400 --> 00:05:22,560 Speaker 1: that others aren't very comparable to investing alpha. Um, do 88 00:05:22,640 --> 00:05:27,640 Speaker 1: you find that it benefits you to study history in 89 00:05:27,760 --> 00:05:30,840 Speaker 1: your day to day career as an analyst, as an 90 00:05:30,839 --> 00:05:35,360 Speaker 1: observer of the market today, certainly, I mean it's I 91 00:05:35,440 --> 00:05:37,279 Speaker 1: even I get tired of hearing it. But you know, 92 00:05:37,320 --> 00:05:40,160 Speaker 1: people say the more things change is the more they 93 00:05:40,160 --> 00:05:42,760 Speaker 1: stay the same, But it is true. It's I mean, 94 00:05:42,800 --> 00:05:45,240 Speaker 1: as we'll talk about today, the kind of tech hype 95 00:05:45,320 --> 00:05:49,000 Speaker 1: in the sixteen nineties, it's a kind of good reminder 96 00:05:49,160 --> 00:05:51,720 Speaker 1: to not get caught up with the latest fat and 97 00:05:52,880 --> 00:05:56,200 Speaker 1: I think that whatever everyone's talking about is going to 98 00:05:56,279 --> 00:05:59,880 Speaker 1: be the next big thing, because when you study history, 99 00:06:00,000 --> 00:06:02,320 Speaker 1: you're looking at I mean, I did one article on 100 00:06:02,360 --> 00:06:04,880 Speaker 1: active investing in the Roman Empire. You can kind of 101 00:06:04,920 --> 00:06:09,000 Speaker 1: see that these fads quickly go away, and so don't 102 00:06:09,160 --> 00:06:13,240 Speaker 1: change what your overall strategy is just because there's some 103 00:06:13,320 --> 00:06:19,000 Speaker 1: hot new stock or sector or technology, because odds are 104 00:06:19,080 --> 00:06:20,880 Speaker 1: that's just going to be something that someone's going to 105 00:06:20,960 --> 00:06:23,679 Speaker 1: write about in two hundred years. The next finance history 106 00:06:23,760 --> 00:06:26,960 Speaker 1: guy on Medium, right or on Twitter. Um, so Jamie, 107 00:06:27,080 --> 00:06:29,880 Speaker 1: let's talk about whatever they're posting on but they're just 108 00:06:29,880 --> 00:06:32,760 Speaker 1: gonna wire directly into our brains. That's probably more likely 109 00:06:32,880 --> 00:06:36,440 Speaker 1: download it. Yeah. So Jamie, let's talk about what a 110 00:06:36,680 --> 00:06:41,480 Speaker 1: tech stock might have looked like in say, the sixteen hundreds. 111 00:06:41,520 --> 00:06:43,440 Speaker 1: I sort of alluded to it in the intro, but 112 00:06:43,520 --> 00:06:46,120 Speaker 1: I guess to some extent, every company is sort of 113 00:06:46,160 --> 00:06:50,760 Speaker 1: about technological innovation, but in the sixteen hundreds, technological innovation 114 00:06:50,839 --> 00:06:54,240 Speaker 1: would look very different to what we think about today. Yeah. 115 00:06:54,320 --> 00:06:58,000 Speaker 1: So the sixteen nineties was kind of known as a I. 116 00:06:58,160 --> 00:07:01,680 Speaker 1: P O bubble in London on the London Stock Exchange. 117 00:07:02,200 --> 00:07:04,919 Speaker 1: Some people call it a tech bubble and some people 118 00:07:05,200 --> 00:07:10,040 Speaker 1: I mean nerdy financial historians. And basically what spurred this 119 00:07:10,200 --> 00:07:14,640 Speaker 1: kind of hype around tech stocks in that day was 120 00:07:14,840 --> 00:07:17,880 Speaker 1: there's two factors. One was the Nine Years War was 121 00:07:17,920 --> 00:07:22,400 Speaker 1: going on, which restricted trade with other nations, and so 122 00:07:22,720 --> 00:07:25,960 Speaker 1: any capital that investors wanted to deploy they kind of 123 00:07:25,960 --> 00:07:30,600 Speaker 1: had to turn inward and invest within Britain. So when 124 00:07:30,600 --> 00:07:35,400 Speaker 1: they're looking for new opportunities, they stumbled upon new joint 125 00:07:35,440 --> 00:07:38,800 Speaker 1: stock companies that were starting to form more quickly. Than before. 126 00:07:39,600 --> 00:07:43,000 Speaker 1: And there was one quote from a guy who started 127 00:07:43,000 --> 00:07:48,760 Speaker 1: writing a sort of bi weekly financial markets review who said, 128 00:07:49,160 --> 00:07:51,680 Speaker 1: a great many stocks have arisen since this war with 129 00:07:51,760 --> 00:07:54,560 Speaker 1: France for trade being obstructed at sea. A few that 130 00:07:54,600 --> 00:07:56,880 Speaker 1: have money, we're willing it to lie idle, and a 131 00:07:56,920 --> 00:07:59,200 Speaker 1: great many found that they could employ their money more 132 00:07:59,200 --> 00:08:01,560 Speaker 1: easily and joint dock companies than in laying out the 133 00:08:01,600 --> 00:08:04,720 Speaker 1: same in lands, houses or commodities. So I thought that 134 00:08:04,760 --> 00:08:07,160 Speaker 1: was kind of interesting that he was pointing out that 135 00:08:07,160 --> 00:08:09,280 Speaker 1: it's easier to invest in these new text docs than 136 00:08:09,400 --> 00:08:13,400 Speaker 1: other asset classes. But what really set off the hype 137 00:08:13,600 --> 00:08:17,680 Speaker 1: was the success of a treasure hunt by Sir William Phipps. 138 00:08:18,040 --> 00:08:22,200 Speaker 1: He was actually eventually the first governor of the Massachusetts 139 00:08:22,240 --> 00:08:24,760 Speaker 1: Bay Colony, which is kind of interesting, and he oversaw 140 00:08:24,800 --> 00:08:29,160 Speaker 1: the Salem which trials, but he went out and convinced 141 00:08:29,360 --> 00:08:31,960 Speaker 1: a duke in England he could kind of think of 142 00:08:32,120 --> 00:08:34,960 Speaker 1: as like a VC firm in the modern day, to 143 00:08:35,280 --> 00:08:40,320 Speaker 1: invest in his voyage to go find some treasure. And 144 00:08:41,320 --> 00:08:44,120 Speaker 1: the first time he failed, but then he came back, 145 00:08:44,880 --> 00:08:48,120 Speaker 1: got more financing, went back out, and he had just 146 00:08:48,160 --> 00:08:54,280 Speaker 1: heard rumors of some sunken treasure ship in the Caribbean 147 00:08:54,880 --> 00:08:59,960 Speaker 1: and he goes out finds it and he hauls up 148 00:09:00,120 --> 00:09:04,120 Speaker 1: thirty two tons of treasure, which I can't even begin 149 00:09:04,160 --> 00:09:07,440 Speaker 1: to kind of wrap my head around, and brings it 150 00:09:07,480 --> 00:09:12,000 Speaker 1: back and the investors received a ten thousand percent return, 151 00:09:12,640 --> 00:09:16,480 Speaker 1: which is just unbelievable. And as soon as that happened, 152 00:09:16,480 --> 00:09:19,760 Speaker 1: that kind of just sparked a menia because dozens of 153 00:09:19,800 --> 00:09:25,600 Speaker 1: new companies started forming to either provide the technology to 154 00:09:26,120 --> 00:09:29,080 Speaker 1: retrieve treasures. So that was the kind of hype tech 155 00:09:29,120 --> 00:09:32,000 Speaker 1: stock of the day. It was these diving companies that 156 00:09:32,840 --> 00:09:37,920 Speaker 1: had either suits or other diving apparatus is and you 157 00:09:38,000 --> 00:09:40,080 Speaker 1: just have to look up the drawings of these because 158 00:09:40,120 --> 00:09:44,360 Speaker 1: they're insane. There's one was like the Edmund Halle bell, 159 00:09:44,840 --> 00:09:47,240 Speaker 1: and it was this weird contraption where they would lower 160 00:09:47,280 --> 00:09:49,800 Speaker 1: you down into the water and like this bell, but 161 00:09:49,920 --> 00:09:52,800 Speaker 1: trap air so that divers could stay down longer and 162 00:09:52,840 --> 00:09:57,240 Speaker 1: search for treasure. And so all these companies form basically 163 00:09:57,240 --> 00:10:00,800 Speaker 1: promising investors and one of the prospective is for this company. 164 00:10:00,880 --> 00:10:03,800 Speaker 1: One of these companies actually put in the prospectives. We 165 00:10:03,880 --> 00:10:07,640 Speaker 1: promised a hundred percent return to investors, and their whole 166 00:10:07,679 --> 00:10:10,760 Speaker 1: pitch was, you know, oh, look at that guy you 167 00:10:10,800 --> 00:10:13,960 Speaker 1: know who made ten percent on the Phipps treasure hunt. 168 00:10:14,320 --> 00:10:17,320 Speaker 1: This technology will do even better or just the same, 169 00:10:17,600 --> 00:10:21,800 Speaker 1: And so investors just poured money into these stocks and 170 00:10:22,080 --> 00:10:24,200 Speaker 1: it didn't it didn't end up so well. Um, but 171 00:10:25,080 --> 00:10:28,800 Speaker 1: there was Yeah, it was just crazy there. From sixteen 172 00:10:28,920 --> 00:10:33,240 Speaker 1: seventy two to nine there were five patents related to 173 00:10:33,320 --> 00:10:37,800 Speaker 1: diving technology, and then in just two years from six 174 00:10:38,640 --> 00:10:41,679 Speaker 1: there were seventeen patents filed. And it was of all 175 00:10:41,720 --> 00:10:44,599 Speaker 1: patents filed in those two years, So the kind of 176 00:10:44,679 --> 00:10:48,080 Speaker 1: hype was clear. I already loved this story so much. 177 00:10:48,280 --> 00:10:51,320 Speaker 1: First of all, it would just have never occurred to 178 00:10:51,400 --> 00:10:55,040 Speaker 1: me that in the sixteen hundred they had any technology, 179 00:10:55,360 --> 00:10:59,120 Speaker 1: no matter how rudimentary, that could get lower someone to 180 00:10:59,160 --> 00:11:01,200 Speaker 1: the bottom of the sea for long enough to dig 181 00:11:01,240 --> 00:11:03,679 Speaker 1: up treasure. I would have just assumed then the six 182 00:11:04,160 --> 00:11:06,480 Speaker 1: dreds there was no way to do this. So the 183 00:11:06,520 --> 00:11:10,120 Speaker 1: fact that they invented various ways to do that, that 184 00:11:10,240 --> 00:11:13,720 Speaker 1: already blows my mind. What were the returns like? So 185 00:11:13,800 --> 00:11:16,560 Speaker 1: obviously I don't you know, I don't think I'm going 186 00:11:16,600 --> 00:11:19,320 Speaker 1: out on a limb much to imagine that most of 187 00:11:19,360 --> 00:11:22,440 Speaker 1: these endeavors did not produce ten thousand percent returns and 188 00:11:22,440 --> 00:11:25,839 Speaker 1: probably many of them didn't return anything like that. Is 189 00:11:25,880 --> 00:11:30,320 Speaker 1: there a distribution of returns though that like that one 190 00:11:30,360 --> 00:11:33,160 Speaker 1: can collate that sort of resemble, you know, like if 191 00:11:33,200 --> 00:11:36,000 Speaker 1: you talk about you compared the initial funding to kind 192 00:11:36,000 --> 00:11:39,480 Speaker 1: of like a VC funding, and vcs sort of they 193 00:11:39,559 --> 00:11:43,320 Speaker 1: famously are willing to take losses on a lot of 194 00:11:43,360 --> 00:11:46,400 Speaker 1: their investments to hit the occasional home run or a 195 00:11:46,440 --> 00:11:49,040 Speaker 1: mega home run. Like if you have a portfolio that 196 00:11:49,120 --> 00:11:52,439 Speaker 1: has Facebook and then fifty losers, you're totally fine. So 197 00:11:52,679 --> 00:11:54,760 Speaker 1: is there was there a sort of power law distribution 198 00:11:54,920 --> 00:11:58,679 Speaker 1: like that to the companies that were able to successfully 199 00:11:58,800 --> 00:12:03,800 Speaker 1: uh dig up or find sunken treasure. So obviously we're 200 00:12:03,880 --> 00:12:07,959 Speaker 1: kind of restricted by what has survived since in terms 201 00:12:07,960 --> 00:12:11,560 Speaker 1: of sources, there's a there's not a good data set exactly. 202 00:12:12,679 --> 00:12:16,120 Speaker 1: And uh so from what I've read, there was a 203 00:12:16,320 --> 00:12:22,920 Speaker 1: nineteenth century historian who wrote a like really intricate um 204 00:12:23,200 --> 00:12:26,800 Speaker 1: detailing of all the joint stock companies of that day, 205 00:12:27,160 --> 00:12:30,160 Speaker 1: and he wrote, I have a quote that none of 206 00:12:30,200 --> 00:12:33,520 Speaker 1: the companies or expeditions because in addition to just the 207 00:12:33,559 --> 00:12:37,760 Speaker 1: diving technology companies, there were a lot of groups of 208 00:12:37,800 --> 00:12:41,680 Speaker 1: actual treasure hunters who would set up like the Jamie 209 00:12:41,720 --> 00:12:47,120 Speaker 1: Catherwood Exploration Company and they were just dedicated to treasure hunting. 210 00:12:47,559 --> 00:12:50,920 Speaker 1: But this nineteenth century historians said that none of these 211 00:12:50,920 --> 00:12:55,400 Speaker 1: companies or expeditions were successful. Indeed, the only finds consisted 212 00:12:55,440 --> 00:12:57,440 Speaker 1: of a few cannons at the bottom of the sea. 213 00:12:57,800 --> 00:13:02,960 Speaker 1: So it doesn't sound like any of them really worked out. Um, 214 00:13:03,040 --> 00:13:06,320 Speaker 1: and so I wish it was more optimistic, but it 215 00:13:06,360 --> 00:13:08,680 Speaker 1: sounds like Phips kind of got the job done and 216 00:13:08,679 --> 00:13:13,200 Speaker 1: then no one could replicate his success. Another fault question 217 00:13:13,280 --> 00:13:15,760 Speaker 1: that I have related to this. So you talked about 218 00:13:15,920 --> 00:13:20,880 Speaker 1: the mania, You talked about them, the surge and patents 219 00:13:20,920 --> 00:13:25,800 Speaker 1: that were associated with the treasure hunting diving technology. One 220 00:13:25,840 --> 00:13:29,120 Speaker 1: of the things that we see in modern bubbles and 221 00:13:29,160 --> 00:13:32,600 Speaker 1: even tech is you start with something like Okay, a 222 00:13:32,640 --> 00:13:35,959 Speaker 1: few vcs invest in tech companies, and then a few 223 00:13:36,040 --> 00:13:40,920 Speaker 1: years later, I'm getting ads on my iPhone on Instagram 224 00:13:40,920 --> 00:13:43,440 Speaker 1: to say invest in tech startups for as little as 225 00:13:43,480 --> 00:13:45,480 Speaker 1: ten dollars a month, and people find a way to 226 00:13:46,160 --> 00:13:51,240 Speaker 1: democratize what had been this sort of very exclusive and 227 00:13:51,840 --> 00:13:55,400 Speaker 1: difficult way to invest. Talk to me about the mass 228 00:13:55,480 --> 00:13:59,440 Speaker 1: participation and the degree to which this extended beyond the 229 00:13:59,520 --> 00:14:02,720 Speaker 1: vcas and the dukes to normal people who just wanted 230 00:14:02,760 --> 00:14:06,760 Speaker 1: to put some money down in search of massive returns. Yeah, 231 00:14:06,840 --> 00:14:11,720 Speaker 1: so it definitely was a wider spread investment than just 232 00:14:11,800 --> 00:14:17,600 Speaker 1: these vcs as we're calling them, because these companies are 233 00:14:17,640 --> 00:14:21,480 Speaker 1: formed as joint stock companies and so the average investor 234 00:14:21,840 --> 00:14:26,280 Speaker 1: was able to put their money into these companies. Obviously 235 00:14:26,320 --> 00:14:30,560 Speaker 1: that probably wasn't necessarily a benefit in hindsight once the 236 00:14:30,880 --> 00:14:35,120 Speaker 1: kind of crash came, but yeah, it was definitely a widespread, 237 00:14:35,560 --> 00:14:41,360 Speaker 1: uh sort of speculative mania. And there were and there 238 00:14:41,400 --> 00:14:47,080 Speaker 1: was an account later of the Treasury, the British Treasury 239 00:14:47,120 --> 00:14:49,880 Speaker 1: starting a lottery system because that's how they did a 240 00:14:49,920 --> 00:14:53,480 Speaker 1: lot of their financing in the day, because they wanted 241 00:14:53,520 --> 00:14:57,320 Speaker 1: to kind of pull the money away from these speculative 242 00:14:57,400 --> 00:15:02,240 Speaker 1: joint stocks into funds that benefit the government. And there 243 00:15:02,320 --> 00:15:05,520 Speaker 1: was an analysis done that showed that something like eighties 244 00:15:05,520 --> 00:15:09,400 Speaker 1: seven percent of the money that in your average investor 245 00:15:09,520 --> 00:15:13,280 Speaker 1: had been putting into these joint stock tech companies then 246 00:15:13,400 --> 00:15:16,920 Speaker 1: went to these lotteries. And I thought that was interesting 247 00:15:16,960 --> 00:15:20,240 Speaker 1: because it was kind of just proving that investors didn't 248 00:15:20,240 --> 00:15:23,200 Speaker 1: have a specific you know, dedication to these tech stocks. 249 00:15:23,240 --> 00:15:26,160 Speaker 1: They were just going wherever offered the higher return. So 250 00:15:26,200 --> 00:15:29,680 Speaker 1: as soon as these lotteries offered a better chance at that, 251 00:15:29,720 --> 00:15:32,400 Speaker 1: they ditched the joint stock companies and kind of forgot 252 00:15:32,440 --> 00:15:50,200 Speaker 1: about them. So, Jamie, the natural route for a lot 253 00:15:50,200 --> 00:15:53,080 Speaker 1: of companies, and tech companies in particular, is that you're 254 00:15:53,080 --> 00:15:55,680 Speaker 1: a startup and you get started out of someone's garage, 255 00:15:55,680 --> 00:15:58,800 Speaker 1: and then you get venture capital funds, and then you 256 00:15:59,080 --> 00:16:01,040 Speaker 1: eventually do a listing and a big I p O 257 00:16:01,160 --> 00:16:04,440 Speaker 1: and then you have public investors. You wrote a really 258 00:16:04,480 --> 00:16:08,119 Speaker 1: interesting post, I think it was back in October about 259 00:16:08,280 --> 00:16:11,240 Speaker 1: how a lot of the companies um that happened I 260 00:16:11,320 --> 00:16:13,720 Speaker 1: p O ing in the US over the past year 261 00:16:13,920 --> 00:16:18,680 Speaker 1: have basically never produced a profit, and a lot of 262 00:16:18,680 --> 00:16:21,560 Speaker 1: those companies would be tech companies that investors are just 263 00:16:21,680 --> 00:16:25,720 Speaker 1: sort of betting on on the off chance that they 264 00:16:25,760 --> 00:16:30,320 Speaker 1: will get a big payoff eventually. What's the historic parallel 265 00:16:30,680 --> 00:16:32,640 Speaker 1: to those sorts of I p o s that you 266 00:16:32,680 --> 00:16:37,240 Speaker 1: were looking at. Yeah, So in the early nineteen hundreds, 267 00:16:37,280 --> 00:16:40,280 Speaker 1: there was a rubber boom, if you can believe it, 268 00:16:40,840 --> 00:16:48,040 Speaker 1: and essentially these rubber plantations in Malaysia were they're like 269 00:16:48,120 --> 00:16:50,840 Speaker 1: the largest plantation I believe is in Malaysia. There's one 270 00:16:50,880 --> 00:16:54,040 Speaker 1: in Brazil, so I might botch which one it was, 271 00:16:54,080 --> 00:16:58,400 Speaker 1: but closed down, which meant that the supply of rubber 272 00:16:58,480 --> 00:17:01,040 Speaker 1: was going down and prices were shooting up. And so 273 00:17:01,080 --> 00:17:04,520 Speaker 1: as investors saw that, they did what they always do 274 00:17:04,720 --> 00:17:08,040 Speaker 1: and kind of flocked to rubber as their new hot, 275 00:17:08,680 --> 00:17:13,480 Speaker 1: hot fad, and a lot of companies in England, interestingly 276 00:17:13,600 --> 00:17:18,440 Speaker 1: not Malaysia, were setting up rubber plantations, or at least 277 00:17:18,440 --> 00:17:20,960 Speaker 1: claiming that they were in Malaysia to take advantage of 278 00:17:21,000 --> 00:17:25,240 Speaker 1: this rubber boom, and investors just poured money into it, 279 00:17:25,640 --> 00:17:31,200 Speaker 1: and companies were listing their shares on the market without 280 00:17:31,240 --> 00:17:35,760 Speaker 1: even actually having a plantation. Yet. There was one company 281 00:17:35,800 --> 00:17:41,520 Speaker 1: that put in their prospectives that they would basically offer 282 00:17:41,600 --> 00:17:44,200 Speaker 1: the secrets of the company in exchange for a direct 283 00:17:44,240 --> 00:17:48,520 Speaker 1: buyout of the whole company. So I don't know, I 284 00:17:48,520 --> 00:17:50,920 Speaker 1: wouldn't say that was reassuring if you were just investing 285 00:17:51,119 --> 00:17:55,880 Speaker 1: that the founders were looking to get out so quickly. Um, 286 00:17:56,119 --> 00:17:59,359 Speaker 1: But yeah, there's some guy who went to Malaysia and 287 00:17:59,400 --> 00:18:04,119 Speaker 1: basically they're just like these stubs of rubber tree, whatever 288 00:18:04,160 --> 00:18:07,280 Speaker 1: the tree is that they're planting on these plantations and 289 00:18:07,320 --> 00:18:12,000 Speaker 1: there was nothing even growing. And the perspectuses back at 290 00:18:12,040 --> 00:18:14,239 Speaker 1: home in England were saying that they had, you know, 291 00:18:14,320 --> 00:18:19,040 Speaker 1: these really high yielding plantations and everything was going great, 292 00:18:19,080 --> 00:18:21,720 Speaker 1: but in reality there was nothing even set up in Malaysia. 293 00:18:22,160 --> 00:18:24,000 Speaker 1: So yeah, it was a case of kind of just 294 00:18:24,119 --> 00:18:29,359 Speaker 1: listing a prospectus to raise money or just you know, 295 00:18:29,800 --> 00:18:33,399 Speaker 1: ly in your pockets before doing any actual work. And 296 00:18:33,440 --> 00:18:36,639 Speaker 1: no one was doing real due diligence. So look for 297 00:18:36,640 --> 00:18:39,440 Speaker 1: a while, I'm curious about that because you're talking about 298 00:18:39,920 --> 00:18:43,920 Speaker 1: the perspectuses of this rubber company. You mentioned the perspectuses 299 00:18:44,520 --> 00:18:48,960 Speaker 1: of this uh, the companies that the Sunken Treasure I 300 00:18:49,040 --> 00:18:52,399 Speaker 1: mentioned in the intro. You tweeted about the prospectus and 301 00:18:52,480 --> 00:18:56,439 Speaker 1: the initial subscribe subscribe over subscription of the Guinness I 302 00:18:56,480 --> 00:18:59,560 Speaker 1: p O. Was there any when we think about perspectus 303 00:18:59,560 --> 00:19:02,240 Speaker 1: is today and companies file s one FI length and 304 00:19:02,240 --> 00:19:05,640 Speaker 1: they're all very regulated and there's very sort of strict 305 00:19:05,680 --> 00:19:08,040 Speaker 1: patterns about you talk about this and then you lay 306 00:19:08,040 --> 00:19:09,560 Speaker 1: out the balance sheet and then you lay out the 307 00:19:09,600 --> 00:19:13,560 Speaker 1: income statements. Was there any sort of common approach to 308 00:19:13,880 --> 00:19:16,200 Speaker 1: laying out a prospectus or was it in those days, 309 00:19:16,240 --> 00:19:20,000 Speaker 1: basically you just write whatever you want. I'm not an 310 00:19:20,000 --> 00:19:22,280 Speaker 1: expert on this, but from what I've seen, that kind 311 00:19:22,280 --> 00:19:25,960 Speaker 1: of I mean, I can't imagine a government that was 312 00:19:26,000 --> 00:19:29,240 Speaker 1: regulating perspectuses would let someone say I'll give you the 313 00:19:29,280 --> 00:19:31,920 Speaker 1: secrets to the company if you buy me out, um, 314 00:19:32,640 --> 00:19:37,000 Speaker 1: and I wouldn't say that. Looking at various perspectuses, there 315 00:19:37,000 --> 00:19:41,000 Speaker 1: seemed to be a kind of common format or approach. 316 00:19:41,400 --> 00:19:43,720 Speaker 1: So it certainly didn't seem to me that there is 317 00:19:43,760 --> 00:19:48,000 Speaker 1: any regulation of it. But I could read something that 318 00:19:48,080 --> 00:19:51,080 Speaker 1: proves proves me wrong. So what are some of your 319 00:19:51,080 --> 00:19:55,240 Speaker 1: other favorite finance stories, especially anything related to sort of 320 00:19:55,320 --> 00:19:58,119 Speaker 1: tech or mania, which seems to be what we're what 321 00:19:58,240 --> 00:20:03,040 Speaker 1: we're discussing here. I gotta say reference the Guinness example. 322 00:20:03,880 --> 00:20:08,240 Speaker 1: That's probably one of my favorite examples a kind of 323 00:20:08,240 --> 00:20:13,840 Speaker 1: a mania in history, because it was just insane that 324 00:20:14,920 --> 00:20:19,359 Speaker 1: sources describing what went down on the actual day of 325 00:20:19,400 --> 00:20:24,800 Speaker 1: the quote I p O. I mean, the economist said 326 00:20:24,920 --> 00:20:28,880 Speaker 1: something like it's a day that witnesses will never forget. 327 00:20:29,240 --> 00:20:33,159 Speaker 1: And then another newspaper the time called the Spectator said 328 00:20:33,200 --> 00:20:36,080 Speaker 1: that the scene that took place on Saturday outside of 329 00:20:36,119 --> 00:20:38,879 Speaker 1: Barings Bank is enough to show that a speculative mania 330 00:20:38,960 --> 00:20:43,919 Speaker 1: exists or something along those lines. And as you mentioned, 331 00:20:43,960 --> 00:20:47,680 Speaker 1: I tweeted all these takes at the time by analysts 332 00:20:48,240 --> 00:20:51,400 Speaker 1: or you know, writers at The Economist and this other 333 00:20:51,440 --> 00:20:55,120 Speaker 1: newspaper kind of taking their different views of the valuation 334 00:20:55,160 --> 00:20:58,800 Speaker 1: of the company because a lot of investors were getting 335 00:20:58,840 --> 00:21:05,080 Speaker 1: hyped up around Guinnesses ramped up production and there I 336 00:21:05,119 --> 00:21:08,240 Speaker 1: guess new technology to bring it back to tech that 337 00:21:08,359 --> 00:21:11,119 Speaker 1: was allowing them to produce more at a lower cost. 338 00:21:11,280 --> 00:21:13,879 Speaker 1: But then some analysts were saying that was really just 339 00:21:13,960 --> 00:21:18,200 Speaker 1: because the materials had gotten cheaper, and so that was interesting. 340 00:21:18,240 --> 00:21:22,240 Speaker 1: But in terms of mania, when the Guinness I p 341 00:21:22,440 --> 00:21:27,440 Speaker 1: O actually took place, the Bearings Bank basically came out 342 00:21:27,520 --> 00:21:30,360 Speaker 1: and said that it would be open for thirty six hours, 343 00:21:30,920 --> 00:21:33,800 Speaker 1: and investors who wanted to get in on the action 344 00:21:33,840 --> 00:21:37,560 Speaker 1: had to come with their subscription form and deliver it 345 00:21:37,600 --> 00:21:42,200 Speaker 1: to the bank, all signed and everything, and the bank 346 00:21:42,280 --> 00:21:44,760 Speaker 1: only ended up being open for three hours because there 347 00:21:44,760 --> 00:21:47,840 Speaker 1: was such a mad rush and they had to call 348 00:21:47,920 --> 00:21:52,639 Speaker 1: in a special police brigade to police the area because 349 00:21:52,680 --> 00:21:55,840 Speaker 1: investors were going crazy. They had to barricade the doors 350 00:21:55,960 --> 00:21:59,200 Speaker 1: so they couldn't let anyone in but people still wanted 351 00:21:59,240 --> 00:22:02,320 Speaker 1: to get their shares in. But obviously this was way 352 00:22:02,320 --> 00:22:05,560 Speaker 1: before anything electronics, so they still had to deliver their 353 00:22:05,560 --> 00:22:09,840 Speaker 1: subscription form. So seen as there was police lining the 354 00:22:09,880 --> 00:22:15,040 Speaker 1: perimeter and the doors were barricaded, investors started tying their 355 00:22:15,080 --> 00:22:18,960 Speaker 1: subscription forms two rocks and literally throwing themselves at the 356 00:22:18,960 --> 00:22:22,520 Speaker 1: opportunity by launching these rocks with their subscription forms like 357 00:22:22,600 --> 00:22:25,440 Speaker 1: through the windows of Barings Bank in order to get 358 00:22:25,480 --> 00:22:29,520 Speaker 1: their shares in. Uh So that is I don't know. 359 00:22:29,560 --> 00:22:32,200 Speaker 1: To me, that's one of the craziest stories, because you 360 00:22:32,320 --> 00:22:37,919 Speaker 1: just imagine some i PO today and investors sitting in 361 00:22:38,000 --> 00:22:42,359 Speaker 1: Manhattan somewhere just launching rocks through banks windows and buy shares. 362 00:22:42,680 --> 00:22:45,359 Speaker 1: That kind of reminds me, Tracy. Remember when we did 363 00:22:45,600 --> 00:22:49,159 Speaker 1: the episode about the housing bubble in Florida like a 364 00:22:49,200 --> 00:22:53,159 Speaker 1: hundred years ago, and we talked about the binder boys, 365 00:22:53,640 --> 00:22:57,000 Speaker 1: just like we're out on the street in Florida who 366 00:22:57,119 --> 00:23:00,239 Speaker 1: just had these binders full of properties for sale and 367 00:23:00,280 --> 00:23:04,760 Speaker 1: these manias in essentially in the days before electronic trading, 368 00:23:04,880 --> 00:23:07,240 Speaker 1: when things had to be done physically, when you had 369 00:23:07,280 --> 00:23:10,040 Speaker 1: these manias that people actually had together in one place. 370 00:23:10,480 --> 00:23:12,399 Speaker 1: In the case of Miami was just sort of gathering 371 00:23:12,400 --> 00:23:15,280 Speaker 1: out on the street. They're actually like all kinds of traffic, 372 00:23:14,960 --> 00:23:19,960 Speaker 1: traffic jams and other stuff like that, because essentially everyone 373 00:23:20,119 --> 00:23:22,320 Speaker 1: was out in the street trying to buy property. And 374 00:23:22,359 --> 00:23:25,080 Speaker 1: so it very much reminds me of that that sometimes 375 00:23:25,119 --> 00:23:27,719 Speaker 1: these things get so intense that they start to like 376 00:23:27,800 --> 00:23:32,480 Speaker 1: break down the physical infrastructure of the place where transactions 377 00:23:32,520 --> 00:23:36,000 Speaker 1: are done. Yeah. Um, it makes you think a lot 378 00:23:36,040 --> 00:23:39,760 Speaker 1: about like whether current manias are more difficult to spot 379 00:23:39,800 --> 00:23:43,000 Speaker 1: because they don't happen in some physical capacity, Like you 380 00:23:43,000 --> 00:23:45,600 Speaker 1: don't have a bunch of people standing outside the New 381 00:23:45,640 --> 00:23:48,560 Speaker 1: York Stock Exchange hurling rocks in order to get their 382 00:23:48,600 --> 00:23:52,800 Speaker 1: share subscriptions. But I but I did think of that 383 00:23:52,800 --> 00:23:56,680 Speaker 1: that the the analogy would be remember in late seventeen 384 00:23:56,880 --> 00:24:00,320 Speaker 1: when all the cryptocurrency exchanges couldn't handle the traffic load 385 00:24:00,400 --> 00:24:02,680 Speaker 1: and start going down right, and they would have these 386 00:24:02,720 --> 00:24:06,560 Speaker 1: crashes and people complained that their trades weren't going through. 387 00:24:06,600 --> 00:24:09,440 Speaker 1: So even though it's digital, I do think that there's 388 00:24:09,480 --> 00:24:11,840 Speaker 1: some interesting analogies where you just get such a rush. 389 00:24:12,040 --> 00:24:15,520 Speaker 1: In that case, it was digital infrastructure that they were 390 00:24:15,520 --> 00:24:18,560 Speaker 1: just buckling onto the load. Yeah, so maybe when demand 391 00:24:18,640 --> 00:24:22,920 Speaker 1: starts to overload the market infrastructure. That's a bad sign. Um. 392 00:24:22,960 --> 00:24:28,000 Speaker 1: But we're speaking over Jamie, so I feel bad, Jamie. Um. 393 00:24:28,040 --> 00:24:30,240 Speaker 1: There's one thing that you pointed out in your your 394 00:24:30,280 --> 00:24:33,119 Speaker 1: post about Guinness, which was that, you know, when this 395 00:24:33,240 --> 00:24:37,200 Speaker 1: all was happening in the late eighteen hundreds, there were 396 00:24:37,280 --> 00:24:40,320 Speaker 1: a bunch of commentators who were watching this from afar 397 00:24:40,560 --> 00:24:43,680 Speaker 1: and going, oh, yeah, this is crazy and it's definitely 398 00:24:44,080 --> 00:24:48,960 Speaker 1: a speculative mania, and yet it's still happened. Why was that. 399 00:24:48,960 --> 00:24:51,480 Speaker 1: That was the craziest part to me is that we're 400 00:24:51,880 --> 00:24:55,119 Speaker 1: you know, I'm writing today, you know, all high and mighty, like, 401 00:24:55,160 --> 00:24:59,359 Speaker 1: look at these it's you know, launching rocks through windows. 402 00:24:59,400 --> 00:25:02,560 Speaker 1: But people were saying the same thing at the time, 403 00:25:02,960 --> 00:25:07,880 Speaker 1: which it was kind of depressing but also fascinating. Depressing 404 00:25:07,880 --> 00:25:10,600 Speaker 1: in the sense that we're still having those same sorts 405 00:25:10,640 --> 00:25:14,920 Speaker 1: of manias in different ways today, but also just that 406 00:25:15,040 --> 00:25:17,520 Speaker 1: we kind of always assume that in the past when 407 00:25:17,560 --> 00:25:20,399 Speaker 1: these manias happened, everyone was caught up in the mania. 408 00:25:20,920 --> 00:25:26,160 Speaker 1: But there were people who sound just like I would 409 00:25:26,200 --> 00:25:30,840 Speaker 1: write today, saying that this is absolutely ridiculous. You know, 410 00:25:30,920 --> 00:25:35,119 Speaker 1: there's no guarantee that this company is gonna be a 411 00:25:35,240 --> 00:25:40,280 Speaker 1: success and its valuation is ridiculous. UM. And so that 412 00:25:40,400 --> 00:25:45,200 Speaker 1: just really that's particular Spectator article UM really stood out 413 00:25:45,200 --> 00:25:47,639 Speaker 1: to me because the guy had some really good quotes 414 00:25:47,680 --> 00:25:52,840 Speaker 1: about how the public will public will never listen to 415 00:25:53,480 --> 00:25:57,600 Speaker 1: someone talking about fraud when returns are good, just as 416 00:25:57,600 --> 00:26:00,680 Speaker 1: a soldier will never listen to a thirsty soldier will 417 00:26:00,720 --> 00:26:04,560 Speaker 1: never listen to someone talk about poisoned water. Something along 418 00:26:04,640 --> 00:26:08,679 Speaker 1: those lines. Basically, you know, it falls on deaf ears 419 00:26:08,760 --> 00:26:11,399 Speaker 1: because if there's returns, you're gonna go for it, and 420 00:26:11,440 --> 00:26:14,240 Speaker 1: if you're some parched soldier in the middle of the desert, 421 00:26:14,240 --> 00:26:16,600 Speaker 1: you're going to drink the water no matter what someone 422 00:26:16,640 --> 00:26:20,119 Speaker 1: tells you. Definitely, the idea of nobody wanting to hear 423 00:26:20,160 --> 00:26:22,840 Speaker 1: about fraud in good time, it definitely falls with that 424 00:26:23,040 --> 00:26:26,080 Speaker 1: category of the more things change, the more things stay 425 00:26:26,160 --> 00:26:29,560 Speaker 1: the same, Jamie, before we go, I do think there 426 00:26:29,560 --> 00:26:31,600 Speaker 1: are probably a lot of listeners that are interested in 427 00:26:31,760 --> 00:26:35,119 Speaker 1: economic history, and probably people are sorry financial history, and 428 00:26:35,160 --> 00:26:37,080 Speaker 1: people have read a lot of books. But do you 429 00:26:37,119 --> 00:26:41,879 Speaker 1: have any favorite resource material for what you learn that 430 00:26:42,000 --> 00:26:46,000 Speaker 1: maybe people haven't heard about that they should check out. UM. 431 00:26:46,080 --> 00:26:49,400 Speaker 1: The easiest way would be to plug my own own 432 00:26:49,480 --> 00:26:53,639 Speaker 1: account and follow me. But outside of that, um archive 433 00:26:53,720 --> 00:26:58,480 Speaker 1: dot org is just an unreal resource that I've kind 434 00:26:58,520 --> 00:27:04,199 Speaker 1: of recently stumbled a upon. You can search like stock 435 00:27:04,240 --> 00:27:09,720 Speaker 1: market and then do sort by date published, and they 436 00:27:09,760 --> 00:27:14,679 Speaker 1: have like source material archived from literally like six hundred 437 00:27:14,800 --> 00:27:17,959 Speaker 1: seventeen hundreds, and it's just full PDFs that you can 438 00:27:18,000 --> 00:27:21,520 Speaker 1: look at and go through. So if that sounds interesting 439 00:27:21,560 --> 00:27:25,960 Speaker 1: to you, then that would be my recommendation. But there's 440 00:27:25,960 --> 00:27:30,000 Speaker 1: probably a lot of people who won't do that. Yeah, 441 00:27:30,040 --> 00:27:33,520 Speaker 1: that's safe to say. Yeah, but I find that stuff fascinating. 442 00:27:33,520 --> 00:27:34,879 Speaker 1: That's where I find a lot of these kind of 443 00:27:34,920 --> 00:27:39,639 Speaker 1: interesting stories and quotes is just from reading the stuff 444 00:27:39,640 --> 00:27:42,399 Speaker 1: written at the time. All right, But but the best 445 00:27:42,440 --> 00:27:46,840 Speaker 1: way is for people to follow you on Twitter. Right, Yeah, 446 00:27:46,880 --> 00:27:50,800 Speaker 1: that would be my recommendation, but I'm biased, all right. 447 00:27:50,960 --> 00:27:54,960 Speaker 1: Jamie Catherwood, a k A finance history guy, thank you 448 00:27:55,000 --> 00:27:57,560 Speaker 1: so much for coming on. Finally. I'm glad we could 449 00:27:57,600 --> 00:28:15,560 Speaker 1: make it happen. Yeah, thank you so much so, Joe. 450 00:28:15,600 --> 00:28:18,879 Speaker 1: I found that conversation really, really great, and I just 451 00:28:18,920 --> 00:28:21,439 Speaker 1: love the notion that you know, we're sat here in 452 00:28:21,480 --> 00:28:24,199 Speaker 1: the year nineteen. I had to think about that for 453 00:28:24,240 --> 00:28:27,800 Speaker 1: a second, it is, and we're talking about technology like 454 00:28:28,080 --> 00:28:31,840 Speaker 1: social media and you know, microchips and things like that. 455 00:28:32,000 --> 00:28:34,679 Speaker 1: But in the sixteen hundreds, there were a bunch of 456 00:28:34,680 --> 00:28:38,440 Speaker 1: people sitting around, you know, tables in London thinking about 457 00:28:38,440 --> 00:28:41,680 Speaker 1: technology as a diving bell that would let them go 458 00:28:41,880 --> 00:28:46,040 Speaker 1: underwater and search for sunken treasure. Yeah, the first thing 459 00:28:46,080 --> 00:28:48,600 Speaker 1: I'm gonna do after I get out of the studio 460 00:28:48,680 --> 00:28:52,040 Speaker 1: here is go google images of the diving bell, because 461 00:28:52,440 --> 00:28:55,360 Speaker 1: I still find it almost unfathomable that in the sixteen 462 00:28:55,400 --> 00:28:57,960 Speaker 1: hundreds they created ways for people to get to the 463 00:28:58,000 --> 00:29:00,239 Speaker 1: bottom of the sea and be able to breathe. So 464 00:29:00,320 --> 00:29:02,880 Speaker 1: that's I wonder how many people died. You have to 465 00:29:02,920 --> 00:29:06,160 Speaker 1: wonder in those endeavors. But anyway, because that's the first 466 00:29:06,200 --> 00:29:08,280 Speaker 1: thing I'm curious about, because I still almost find it 467 00:29:08,320 --> 00:29:11,600 Speaker 1: impossible to believe. But there are I mean, there's this 468 00:29:11,680 --> 00:29:14,600 Speaker 1: sort of thing that seems to happen in all these 469 00:29:14,640 --> 00:29:18,320 Speaker 1: instances of big technology breakthroughs, which is you get maybe 470 00:29:18,600 --> 00:29:21,960 Speaker 1: you know one person who innovates and I think Jamie 471 00:29:22,000 --> 00:29:24,959 Speaker 1: has made this point on his on his Medium page, 472 00:29:25,480 --> 00:29:27,600 Speaker 1: but you get one innovator, then you get a bunch 473 00:29:27,640 --> 00:29:30,640 Speaker 1: of imitators. And then inevitably you get a bunch of 474 00:29:30,760 --> 00:29:34,160 Speaker 1: fraudsters who just sort of mess up the whole space 475 00:29:34,200 --> 00:29:36,840 Speaker 1: and make it a lot more dangerous for all investors, 476 00:29:36,880 --> 00:29:39,120 Speaker 1: and there's sort of an oversupply, and it becomes very, 477 00:29:39,240 --> 00:29:43,160 Speaker 1: very difficult for investors to pick out who is actually 478 00:29:43,280 --> 00:29:46,960 Speaker 1: doing something substantive in the space. It really does seem 479 00:29:47,000 --> 00:29:50,360 Speaker 1: to be the classic pattern of history in so many ways. 480 00:29:50,520 --> 00:29:52,480 Speaker 1: I mean, again not to just keep going back to 481 00:29:52,520 --> 00:29:55,160 Speaker 1: the crypto bubble, but you couldn't have a more perfect 482 00:29:55,200 --> 00:29:58,600 Speaker 1: sort of description of what happened there. Some people earlier 483 00:29:58,760 --> 00:30:04,200 Speaker 1: early on tinker as computer scientists, uh, sort of radical anarchists, 484 00:30:04,320 --> 00:30:08,280 Speaker 1: and then by the end essentially like pure scammers and fraudsters. 485 00:30:08,920 --> 00:30:11,880 Speaker 1: And just as the mania grew and the demand for 486 00:30:11,960 --> 00:30:15,560 Speaker 1: supply grows up or accelerate, people will just put up 487 00:30:15,600 --> 00:30:18,160 Speaker 1: any sort of paper or coins because they know there 488 00:30:18,200 --> 00:30:20,720 Speaker 1: will be a thirst for it. Yeah, start Bucks. What 489 00:30:20,800 --> 00:30:27,200 Speaker 1: was that? Um, sorry, we did an episode on that. Yeah, 490 00:30:27,240 --> 00:30:31,040 Speaker 1: we did know, we were we were among the early crowd. 491 00:30:31,920 --> 00:30:33,520 Speaker 1: Was just you know, we were not in it for 492 00:30:33,600 --> 00:30:36,880 Speaker 1: the money, We were not scammers, and you were in 493 00:30:36,920 --> 00:30:40,080 Speaker 1: it for the technology. Okay. On a serious note, though, 494 00:30:40,120 --> 00:30:42,560 Speaker 1: I thought, you know, the good news is the good 495 00:30:42,600 --> 00:30:46,840 Speaker 1: news is uh Stalwart Bucks never they they never acquired 496 00:30:46,880 --> 00:30:49,480 Speaker 1: any monetary value relation. So the good news is no 497 00:30:49,480 --> 00:30:52,719 Speaker 1: one right lost anything. Okay, that's all I wanted to say. Okay, 498 00:30:52,760 --> 00:30:54,920 Speaker 1: I wanted to pay you a compliment and say that 499 00:30:54,960 --> 00:30:58,720 Speaker 1: I thought your observation about um market manias and how 500 00:30:59,120 --> 00:31:01,560 Speaker 1: you know, again going back to crypto, but when we 501 00:31:01,600 --> 00:31:04,000 Speaker 1: saw a lot of the blockchains and the exchanges being 502 00:31:04,040 --> 00:31:06,680 Speaker 1: sort of overwhelmed by demand, that might have been a 503 00:31:06,680 --> 00:31:11,240 Speaker 1: good indication of basically a speculative mania taking place. And 504 00:31:11,280 --> 00:31:13,320 Speaker 1: I think, I think you're onto something because I think 505 00:31:13,640 --> 00:31:21,000 Speaker 1: if the existing infrastructure can't handle demand for a particular security, 506 00:31:21,160 --> 00:31:24,200 Speaker 1: then it's usually a good sign that something is out 507 00:31:24,200 --> 00:31:26,840 Speaker 1: of balance in the market. Yeah, I mean you see 508 00:31:26,840 --> 00:31:31,120 Speaker 1: this pattern pattern repeat in thousand. A lot of the 509 00:31:31,160 --> 00:31:34,240 Speaker 1: online brokerages the people are using to trade tech stocks 510 00:31:34,640 --> 00:31:36,960 Speaker 1: or head regular outages. You can go back and look 511 00:31:36,960 --> 00:31:39,640 Speaker 1: at those, going back to the Florida bubble. Just even 512 00:31:39,680 --> 00:31:42,640 Speaker 1: the trains to get into Florida started getting too crowded 513 00:31:42,640 --> 00:31:45,280 Speaker 1: because so many people are traveling down there. So whether 514 00:31:45,320 --> 00:31:48,520 Speaker 1: it's digital in person or people throwing rocks into a 515 00:31:48,560 --> 00:31:51,120 Speaker 1: window because they can't get into the bank. I do 516 00:31:51,240 --> 00:31:54,840 Speaker 1: think that, um, it's one of those telltale signs that 517 00:31:55,480 --> 00:31:59,920 Speaker 1: mania is afoot. All right, this has been another episode 518 00:32:00,120 --> 00:32:03,040 Speaker 1: of the Odd Thoughts Podcast. I'm Tracy Alloway. You can 519 00:32:03,040 --> 00:32:07,000 Speaker 1: follow me on Twitter at Tracy Alloway and I'm Joe wisn'hal. 520 00:32:07,120 --> 00:32:10,360 Speaker 1: You can follow me on Twitter at the Stalwart. And 521 00:32:10,360 --> 00:32:13,440 Speaker 1: you should definitely follow our guest today on Twitter because 522 00:32:13,440 --> 00:32:16,360 Speaker 1: we keep referencing how great his Twitter account is and 523 00:32:16,400 --> 00:32:21,760 Speaker 1: his Medium account, Jamie Catherwood. He's JFC Underscore three Underscore. 524 00:32:22,120 --> 00:32:25,120 Speaker 1: Check him out on Twitter, and you should definitely follow 525 00:32:25,120 --> 00:32:29,160 Speaker 1: our producer to fur Foreheads. He's at foreheads T, as 526 00:32:29,160 --> 00:32:32,760 Speaker 1: well as the Bloomberg head of podcast, Princesca Leavy at 527 00:32:32,840 --> 00:32:35,240 Speaker 1: Francesca Today. Thanks for listening.