SHINY THING$ 0180 ✨

Depending on your political affiliation, your tax bracket, your retirement plans (if any), and the elements of life that provide you with peace of mind, the ups are downs of the stock market are either an indicator of the economy’s well being, or a random set of numbers that have no bearing on your daily decision making at all. 

But, those prices that get printed at 4pm every weekday do affect us all, and they have an emotional currency that is felt far and wide. 

At the dawn of the “modern” stock market in 1602 on the Amsterdam Stock Exchange when shares of the Dutch East India Company first traded, it was a far cry from what we know today — stocks, alts, crypto, leveraged conceptual products, your 401K, degenerate gambling on events and outcomes… all of it is happening all day everyday with the transfer of hundreds of billions dollars of wealth in each trading session. 

With the equities markets owning the headlines as of late, we’re dedicating the 180th installment of Shiny Thing$ to the origins of some of the most popular, most controversial, and most profitable products within the equities markets — and the uniquely relatable stories that that started them. 

But first, some Rally-ish news around the alts and collectibles space 🗞️👇

📰 Bringing Back the Dead :: Last week, The genetics startup Colossal Bioscience officially announced that they’ve successfully re-created the the dire wolf, bringing it back to life after it went extinct some 12,000 years ago. The startup, which has goals of bringing back other species including the wooly mammoth, used using ancient DNA from fossils up to 72,000 years old to reconstruct a full genome and birth living examples of the long extinct wolf. Read More…

📰 Big Jerseys at Auction :: In late March, Michael Jordan’s pro debut jersey originally purchased for $800 in a 1985 Charity Auction was sold at Sothebys for $4.2M. The auction house is now auctioning off Kobe Bryant’s 1996 Rookie Debut jersey, currently at $5.7M with estimates as high as $10M. In hockey, Alexander Ovechkin scored his 895th goal last week, surpassing the record held by Wayne Gretzky. After celebrating on the ice mid-game, Ovechkin could be seen taking off the potential $1M+ jersey and handing it directly to Barry Meisel, president of authentication and game worn jersey platform MeiGray. Will it be coming to market? Read More…

📰 The Masters Takeover :: Even casual fans were glued to the broadcast from Augusta this past Sunday, as Rory McIlroy won the coveted green jacket at golf’s most storied ever, The Masters. The second biggest draw outside of the rounds every year is the merch tent, where some of the most coveted items are fetching 10X-40X on the secondary market. On a somewhat related note, hall of fame baseball player Ken Griffey Jr. is getting praise for shooting one of the most iconic images from the tournament, as he was moonlighting as a pro photographer for the event.  Read More…

and now… to the origins of “The Market”….👇

The first ever dividend (paid out in spices)

Activists and angry shareholders essentially forced dividends to happen, proving very early on that the public can influence the decision making of corporations when the platform is loud enough. 

Specifically, dividends date back four centuries to the pioneering days of the Dutch East India Company (VOC). 

Despite dominating global trade, the VOC delayed issuing its first dividend until 1610, an 8-year gap from the official listing that frustrated shareholders and fueled criticism from prominent wealthy investors like Isaac Le Maire. This inaugural dividend, uniquely, was not paid in cash but rather in spices—specifically, “mace valued at 75% of the nominal capital.” 

To further pacify restless shareholders, subsequent dividends included pepper worth 50% and silver at 7.5%, distributed later that same year. It wasn't until two years later, in 1612, that investors finally received their first cash dividend, marking a pivotal shift toward modern financial practices.

In Spanish dividends in kind are still called dividendos en especia, which translates to "dividends in spice"

Short Selling and activist investing came quickly…

Isaac Le Maire’s ambitions with the Dutch East India Company (VOC) extended far beyond securing dividends. His goal was to challenge management by highlighting their disregard for shareholder interests, directly targeting the company’s share price. In 1610, amidst company reluctance to disclose financial statements, (VOC literally said “disclosure would lead to a precipitous withdrawal of capital”) Le Maire amplified his criticisms over VOC’s lack of transparency and accountability.

Frustrated by the directors’ persistent self-enrichment at shareholders' expense, Le Maire orchestrated history's first documented bear raid through the formation of the "Groote Compagnie." This syndicate's sole mission was undermining the Dutch East India Company. Le Maire and a group of co-founders executed a true coordinated short-selling campaign, selling shares they did not actually own for future delivery, effectively driving down the VOC’s stock price with no safety net in sight.

Their strategy initially succeeded, significantly reducing VOC’s share premium from a peak of 212% in 1607 to 126% by 1610, marking the world's first deliberate short-selling campaign against the era’s most dominant corporation.

The First True Derivatives

Today, anyone can buy and sell stock along with options, futures, synthetic shares, and all sorts of byproducts of liquid markets. But it all started with rice.

The price of (and access to) rice has always been, and may always be, one of the bellwethers for the global economy. So it makes sense that one of the earliest examples of organized derivatives trading emerged in 17th-century Osaka, Japan’s rice trading capital. 

Rice was central to Japan’s economy, serving both as currency and the nation's key agricultural commodity. Merchants across the country sent rice to Osaka, where it was auctioned, and sellers issued certificates known as “rice bills” representing ownership.

Initially, these rice bills involved immediate payment with prompt delivery. But as markets evolved, deposits decreased, and delivery periods lengthened, paving the way for speculative trading. Soon, standardized "prepayment bills," or "empty bills," emerged, effectively creating the first futures contracts—allowing merchants to trade claims on rice at future dates, but at current prices.

In a 400 year foreshadowing of present-day degeneracy, the governor of the city banned this kind of trading, which they viewed as a form of gambling causing the rise of the rice price. Despite the ban, merchants still continued to trade the bills independently (possibly the start of dark pool financial markets).

The first real Short Squeeze, and the birth of modern market manipulation 

The Covid-era GameStop short squeeze is what most millennial and Gen Z traders will reference when asked about the craziest Long vs. Short fight in market history, but starting in 1922, the first true whiplash short squeeze occurred in the public markets with a now-nostalgic grocery chain.

When Clarence Saunders opened the first Piggly Wiggly in Tennessee in 1916, it revolutionized retail—customers could browse and choose items themselves, a first in grocery history. Within six years, Piggly Wiggly stores had spread across the South and Midwest, and its stock was listed on the NYSE.

But after several store closures during a tough winter, bankruptcy rumors triggered a sell-off. Short sellers piled in, and Saunders fought back. With his own money and $10 million from bankers, he bought up nearly every available share, sending the stock price soaring by 50%.

By March 1923, Saunders owned all but 1,128 shares and demanded short sellers cover their positions. The NYSE responded by suspending trading, giving short sellers time to escape. Saunders was left with total control of a company he couldn’t sell, massive debt, and a collapsed recovery plan. His ad campaign to rally public support failed, and he ultimately declared bankruptcy.

Algo Trading, and when retail “lost” for good

High-frequency algorithmic trading may be standard today allowing for advanced machine learning and super computers to make decisions multitudes faster than the human brain, but it took decades of innovation to reach the mainstream. It began in the 1970s with the NYSE’s DOT (Designated Order Turnaround) system, which let traders electronically route orders to floor specialists—cutting down reliance on phone calls, though trades were still executed manually.

The real shift came in the 1980s. In 1984, the NYSE introduced SuperDOT, which enabled orders of up to 100,000 shares to be electronically transmitted for execution, compared to DOT’s 100-share cap. Traders began writing programs that executed trades automatically based on preset conditions—laying the foundation for modern algorithmic trading.

With the rise of electronic communication networks, which matched buy and sell orders without human input, trading could now extend beyond market hours. By the 2000s, algorithmic trading had become dominant. Today, algorithms are responsible for around 70% of all equities trading in U.S. markets. With the advent of AI, that will only increase.

And thats a big part of the reason that the retail trader really has no chance against a big bank when it comes to actively trading in the stock market. Theres a reason software engineers are some of the highest paid positions at investment banks…

Until next week…