“This paper employs a natural experiment from financial history to study the process by which private information is incorporated into prices. I look at the market for English securities in the Netherlands during the 1770s and 1780s. Anecdotal evidence suggests that English insiders traded actively on their private signals, both in London and in Amsterdam. I reconstruct the arrival dates of sailing boats that transmitted information from London to Amsterdam and I look at the movement of English security prices between the arrivals of boats.”
“The technologies of today are built upon those of the past, and the superstars of our era would be nothing without the great leaders of the past. We often discuss our favorite “tech” entrepreneurs. Steve Jobs, Bill Gates, Elon Musk, and many other names arise. Too often these discussions lack historical perspective. Here we build a case for George Eastman as the greatest technology entrepreneur.”
“While the particular technology here is new, the story is very old. Five hundred years ago, improvements in horse-drawn coach technology made carriages more popular in London. At the time, the WSJ recently noted, the people who made their living ferrying passengers along the Thames — the cab drivers of their era — were outraged.”
“Nevertheless in the absence of new, public information, price changes were still considerable. Volatility in ‘quiet’ periods amounted to between 50% and 70% of that observed in periods with news.”
“The South Sea Bubble of 1720 had all the essential ingredients that make investing today challenging: political turmoil, rapid globalization, business innovation, new communication technologies with an abundance of “fake news” and novel financial products that befuddled investors.”
