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*(TLDR: comparison between the 1901 frenzy and the present day prediction market)*
What a 125-Year-Old Bull Market Says About Today’s Trading Craze
Trading apps have replaced bucket shops, but Wall Street abounds with eerie parallels to 1901
By Jason Zweig
Aug. 28, 2026 at 9:00 am ET
https://www.wsj.com/finance/investing/what-a-125-year-old-bull-market-says-about-todays-trading-craze-59ee249e
Illustration of a bull weathervane, with the numbers 1901 and 2026 on the directionals.
ALEX NABAUM FOR WSJ
Is this seemingly unstoppable stock market starting to feel like 1999, when technology stocks went vertical on a wave of speculation? To me, it feels more like 1901.
No, I wasn’t around back then. But a look 125 years back in time shows that it was a remarkably similar period, with lessons for today. Gambling fever can burn longer and hotter than most people think—and then end faster than anyone can imagine. Those who refuse to play pay a high price in short-term opportunity cost, but win in the long run.
Some of the similarities are uncanny.
In 2026, fast trading is almost the norm, with more than 3 million daily trades in S&P 500 index option contracts that expire the same day. In 1901, the turnover rate on the New York Stock Exchange hit 319%, with the entire market capitalization effectively changing hands every 16 weeks—a velocity of trading that wouldn’t be exceeded for more than a century.
In 2026, prediction markets are all the rage, with traders betting on the short-term outcome of just about anything imaginable. In 1901, bucket shops were the hottest outlet for speculation, with people betting on whether the next tick in U.S. Leather or American Cotton Oil stock would be up or down.
In 2026, leveraged exchange-traded funds are booming, enabling traders to double or triple the daily returns on stocks or indexes. In 1901, speculators trading on margin, or borrowed money, eagerly leveraged their bets 10-fold or more. (Today, with perpetual futures, some people might even be able to leverage up to 100 to 1.)
The first lesson of 1901 is that speculative fever is hard to compartmentalize. Gambling in one area of your financial life tends to infect the rest.
The journalist and author Edwin Lefèvre—who later became famous for the book “Reminiscences of a Stock Operator”—published a collection of short fiction in 1901 called “Wall Street Stories.”
Intoxicated by “the wine of gambling,” one of Lefèvre’s characters no longer sees any difference between trading “50,000 shares of a stock” or betting “$50,000 on the turn of a card.” He even offers “to wager a fortune that he could guess which of two flies that had \[landed\] on a table would be the first to fly away.”
Have we progressed in 125 years? Nowadays, prediction markets let you bet on what bitcoin’s price will be 15 minutes from now or whether a football broadcaster will say the words “tush push” during the Super Bowl.
Then, as now, companies that inflamed the public’s urge to gamble cloaked themselves in the righteous robes of “democratization.”
One of the nation’s biggest bucket shops, the aptly named Haight & Freese, claimed that its annual “Guide to Investors” was “for the benefit of the million\[sic\] of busy people” who were seeking “a fair chance of securing a portion of the immense profits \[from\] the rapidly accumulating number and value of exchange securities.”
Yet bucket shops had nothing to do with investing, even though they shrewdly called their customers “investors.” All you could do was bet on a binary outcome: whether the next trade in a given stock would be up or down.
That made people feel they were participating in the capital markets—especially because they could trade with as little as $10 and leverage it, sometimes 30-fold or more. Brokerage firms at the New York Stock Exchange rarely accepted orders for less than 100 shares (which could run into the thousands of dollars) and generally had much tighter limits on margin.
Today’s prediction markets and trading apps pack a similar package into your phone.
The danger then, as now: Once speculation feels fun, it becomes potentially addictive. And that almost always ends in heartburn or heartache.
At the turn of the 20th century, a waiter made $100,000 (millions of dollars in today’s money) trading Brooklyn Rapid Transit Co. stock, noted a history of the NYSE in 1905—a profit, the writer wryly added, “which Wall Street took back at a later date.”
But the longer the good times roll, the more remote the day of reckoning feels. In 1901, the economy was booming. Financiers, led by J.P. Morgan, rolled up entire industries into “combinations” meant to limit competition, minimize price-cutting and maximize appeal to investors. Investors went ga-ga over industrial agglomerations for tin, oil, electric utilities, flour, furniture, copper, pottery, leather, borax, oatmeal, even coffins.
In 1901, U.S. Steel became the first billion-dollar company. It created the same sort of excitement among investors as SpaceX did in 2026 when it became the first initial public offering with a valuation of more than $1 trillion.
After rising 19% in 1900, the stock market rose another 20% in 1901 and 5% in 1902. Following a stumble in 1903, stocks soared again, returning 69% in the next three years.
Then, finally, came the devastating Panic of 1907, when the market crashed 30%, losing 10% in October alone.
Trust companies, the original “shadow banks,” had loaned buckets of money to risky businesses, real-estate speculators and stock traders. Bank runs ensued as depositors feared that dodgy trusts would go bust. It was one of the worst financial disasters in American history, leading to the creation of the Federal Reserve.
I’m not saying you should sell everything and sit out this bull market. But remember this: The few people who had remained calm and remote from the frenzy of the early 1900s emerged stronger.
Hetty Green, perhaps the first and among the greatest of all long-term investors, had lived stubbornly by her motto: “Never speculate in Wall Street.” In 1908 she recalled: “When the crash came I had money, and I was one of the very few who really had it. The others had their ‘securities’ and their ‘values.’ I had the cash, and they had to come to me.”