Thank goodness we’ve learned to only invest in things with genuine intrinsic value.
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So surprised to find Amy! She’s fun and informative. Vintage Space has a lot of interesting content, and not too jargony or technical. I clicked on this originally because I live in Woodburn, OR, the site of a world-renowned Tulip Festival.
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Amy is tilting at windmills. Certainly, I have never heard or seen any reasonable source say that the Tulip Mania bankrupted the Netherlands … as Amy asserts & then disproves. It was a big event at the time, and a lot of Dutch individuals acquired money or lost money through trading tulips, depending on when they bought or sold. But bankrupt the nation? No!
The more interesting Mania (personal opinion) was the English South Sea Bubble in 1720, about 80 years after the Tulip Mania. Same general story – investors got excited about something, in this case the South Sea Company; the stock got bid up to excessive heights, and then collapsed; many individuals gained or lost large amounts of money, depending on when they bought & sold. It was a big deal for the investors, but did not stop England’s rise to global dominance.
What makes the South Sea Bubble so interesting was that one of the investors who lost his shirt was a certain Sir Isaac Newton, showing that even super-geniuses can fail in speculative markets. When we are tempted by the latest fad, we should remember that better men than us have stumbled.
The other factor of interest in the South Sea Bubble was the line of business which made the South Sea Company so attractive to English investors. The company had been granted a monopoly to supply African slaves to Spanish colonies in the New World.
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Charles Mackay recounts that at the height of the mania, a merchant and customer were negotiating the exorbitant price of a tulip bulb, and they left it on the counter while they were haggling in the back room of the shop—and a workman mistook it for an onion and ate it for lunch! The irate buyer wanted the poor bozo cut open to get it out.
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