Today I'd like to talk about how the stock market came about, its origin if you like. The stock market we know today has its beginnings in the colonization of the East and West Indies by European powers in the early seventeenth century. Ships travelled from Europe to the colonies to bring back minerals, spices, sugar and other commodities. Each ship was owned by a small group of individuals and if the voyage was successful, they made a lot of money. But sea travel was dangerous; attacks by pirates and bad weather meant that a high percentage of ships never returned. This was catastrophic for those involved. So what could be done to reduce the risk of a 100 per cent loss? Well, why not establish a company that owns 10 ships and have people buy shares in that company? Then, if one ship is lost at sea, the other nine ships would cover that loss. This was the idea that led to the formation of the East India Company in 1602. Investors bought shares in the company and could sell their shares to other investors. At the same time, the company received money to invest in more and more ships. In those days a formal stock exchange did not exist and investors bought and sold their shares in coffee houses. This was a very informal arrangement and the need for an established stock exchange grew. Finally, in 1801 the London Stock Exchange opened its doors, followed shortly after by the New York Stock Exchange in 1817.