Originally published at: https://blog.12min.com/the-equity-culture-summary/
The Story of the Global Stock Market
As market trading had its ups and downs throughout history, counter-effects emerged: people learned the impact of risk, the probability of its arising, and evaluation of side-effects.
Who Should Read "The Equity Culture"? And Why?Many quotes and examples from renowned market theorists, such as Harry Markowitz, Joseph de la Vega, Louis Bachelier are present in the book.
Their influence extends on a global scale, targeting the greatest economies and affecting third-world countries.
This book awakens the free-minded attitude in others, as a concise guide with an easily-digestible flow it targets only the most experienced economists, financiers, investors, bankers, etc.
We warmly recommend this book to all people interested in economics, financing, and trading.
About Mark SmithMark Smith is mostly known for his stock-trading activities. He is also the author of Toward Rational Exuberance: The Evolution of the Modern Stock Market. Momentarily Smith lives in Manhattan.
"The Equity Culture Summary"The stock market originates from ancient times, or precisely from the mighty power of ancient Rome. The early form of capitalism occurred in The Roman Republic. People divided lands and titles among their trusted nobles, which caused the occurrence of privatization.
Even then, the desire for a leader or ruler drove people to initiate a process that created a powerful state. Roman law enforcement was so sophisticated back in those days that other countries even up to fifteen centuries later weren’t able to produce the same amount of law-effectiveness existing back then.
The ability to collect taxes, build temples for worshiping their Gods and creation of private communities to share expertise on numerous subject is only a part of the Roman Advanced Culture. The word “Publicani” probably doesn’t ring any bells, but corporates know that this term started the corporate era.
The digital word derives from ancient civilization – the most prominent one of all is, of course, The Roman Republic whose influence has spread on three continents. Something very similar to corporations was discovered by the Romans, even though their methods were cruel, they inflicted knowledge and imparted wisdom to the people they’ve conquered.
Investors had an opportunity to trade “partes,” near to the “Temple of Castor,” which was located in a neighborhood named the Forum.
The buying-selling process included “partes” as well as trading with slaves, land, ownership, ships, vehicles, foreign currencies – almost anything tangible in those days. According to historians, everything associated with market, and equity culture derived from Rome.
When Rome fell, the economy collapsed, and the economic progress stagnated for many centuries. Romans used to say – while Egypt builds useless pyramids, we’ve invented an irrigation system that would go on for thousands of years.
After Christians took possession of the newly established Republic, Europe started to starve. The markets were no longer able to satisfy the needs of the people. The black market took advantage of the situation because people could no longer afford the essential daily requirements.
The Bible enforced some strict rules which didn’t produce any effect on the community. People became more desperate and eager for change. Not everyone could enjoy the luxury of having a proper daily meal. To sum it up, economic progress and financial stability were not invented in the new days; they hail from ancient civilizations.
Smith demonstrates how, when, why trading took place. It examines the benefits of it, and why the world’s economy experienced its ups and downs. In the first place, ordinary people will place wars, culture, religious constraints, and unacceptable societal behavior as the greatest culprits who opposed prosperity.
However, many more mysteries are buried beneath the surface – waiting to be excavated.
Understand this masterpiece as an illustration of a museum tour with a well-educated person (author in this case) as your only guide. The skeptical ones are entitled to their opinions, but they should at least give a chance to this beautiful, fact-filled book.
All things considered, trading-mysteries surely are worthy of your attention, because whether we like it or not, the economy is a part of our collective evolution. The craft of trading gets even more amusing with dozens of anecdotes contained in the book.
Come to the roots of the economy, don’t be afraid to exploit the mistakes of our ancestors. Markets nowadays have evolved due to numerous technological possibilities and solutions that exist. However, not even that can simply eliminate all the ancient techniques used by the Romans.
Key Lessons from “The Equity Culture”1. Understand the stocks and markets 2. Markets are evolving all the time 3. The need for central banking
Understand the stocks and marketsThe first ever theorist who undertook a scientific research to understand how markets actually function was Louis Bachelier.
The Theory of Speculation – is more than some case study or theory because it relies on statistical analyses and techniques. He discovered that stock prices are random and changeable.
Markets are evolving all the timeNo one can stop the evolutionary progress of trading. The resistance will be meaningless - the best thing would be to reach out an acceptable accommodation.
The world even now cannot identify how far this change is willing to go. However, the society must realize that markets have matured and periodic crisis are an integral part of that process.
The need for central bankingMany economists throughout the late 19th and early 20th century have realized that money needed central management.
This operation targeted all the money in England because the capital supply line required improvement in order to reduce market inefficiency.
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“The Equity Culture” Quotes[bctt tweet="Around the world, nations are being forced to modify their policies and to restructure their economies to accommodate the equity culture." username="get12min"]
[bctt tweet=“During the bull market of the 1980s, the concept that long-term investment in stocks was a reliable means of building wealth finally became broadly accepted by middle-class Britons and Americans, and by many middle-class Japanese.” username=“get12min”]
[bctt tweet=“The Japanese economic model differed greatly from Western concepts of laissezfaire capitalism.” username=“get12min”]
[bctt tweet=“Despite woeful references to ‘Spanish bonds,’ what was really significant about the Latin American boom and bust of the mid-1820s was the degree to which equity investment, not debt, was preeminent.” username=“get12min”]
[bctt tweet=“Even in nations with a significant history of organized stock markets, the perception of those markets has been tainted by suspicions that can be traced back for generations.” username=“get12min”]