Unchecked Sardine Trading

A story about a market bubble in sardine trading where traders were buying and selling cans without checking what was inside.

"There's an old story about a market craze in sardine trading where sardines disappeared from their waters in Monterey. The commodity traders started bidding up the price of a can of sardines. The price of one can of sardines soared and everybody's buying up these cans of sardines, making a bunch of money flipping them.

One day a buyer decides 'I'm gonna treat myself, I'm gonna take one of these expensive cans of sardines and enjoy it.' He pops it open and immediately becomes sick, vomiting. He tells the seller 'Hey man, I bought these expensive sardines from you, these are no good.'

The seller says 'You don't understand, these are not eating sardines, these are trading sardines.'"

The story was used as an analogy for tech company valuations, where companies were being traded based on future funding rounds rather than fundamental value, similar to how the sardines were traded without regard for their actual contents.