Confusion De Confusiones - Joseph De La Vega

[LongHaul]

[amazonsearch]Confusion De Confusiones[/amazonsearch]

 

CONFUSION DE CONFUSIONES - Book from 1688

Describes the Netherlands stock market in the 1600’s

 

Here are some memorable quotes and notes.  A good read for anyone interested in stock market history.

Striking similarities with the stock market today and this was in the 1600's!

 

 

Author: Joseph de la Vega

• ”He who knows how to endure blows without being terrified by the misfortune resembles the lion who answers the thunder with a roar, and is unlike the hind (deer?) who, stunned by the thunder, tries to flee”
  
• “experience has shown that usually the bulls are victorious and the bears lose out.” 
  
• “As there are so many people who cannot wait to follow the prevailing trend of opinion, I am not surprised that a small group becomes many.  Most people think only of doing what the others do and of following their examples. .. “
  
• "Such a panic we call to be in tortures.”
  
• In the 1600’s there were calls, puts, shorting, and buying on margin. 
  
• I think the main company traded was the East India company.
  
• Complex manipulation in market.
  

 

http://www.amazon.com/Confusion-Confusiones-Portions-Descriptive-Amsterdam/dp/1614274517

 

 

 

[Guest JoelS]

This is really interesting, thank you for posting. 

[writser]

I haven't read the original yet, but I did enjoy the recently published 'The World's First Stock Exchange'. An entertaining read about the history of the Amsterdam Stock exchange in the 1600's. This book referred a few times to the Confusiones. Naked short selling, market manipulation, complex derivatives, insider trading, high frequency trading, it all happened 400 years ago as well. Nothing new under the sun :) . Can recommend this book. Gives a nice overview & perspective of the history of the stock market and is filled with great historical anecdotes dug up from ancient court orders and other documents.

 

http://www.amazon.com/Worlds-Exchange-Columbia-Business-Publishing-ebook/dp/B00IHGTVUO/

[LongHaul]

Thanks for the info Writser.  I may check that out. 

I am always struck by how human nature has not changed over history and in financial markets emotions rule. 

6 years ago everyone was scared to death of another great depression now it seems like it is all forgotten and optimism rules.

They say the stock market has no memory.

[Liberty]

I haven't read the original yet, but I did enjoy the recently published 'The World's First Stock Exchange'. An entertaining read about the history of the Amsterdam Stock exchange in the 1600's. This book referred a few times to the Confusiones. Naked short selling, market manipulation, complex derivatives, insider trading, high frequency trading, it all happened 400 years ago as well. Nothing new under the sun :) . Can recommend this book. Gives a nice overview & perspective of the history of the stock market and is filled with great historical anecdotes dug up from ancient court orders and other documents.

 

http://www.amazon.com/Worlds-Exchange-Columbia-Business-Publishing-ebook/dp/B00IHGTVUO/

 

I'm curious: What counted as HFT back in 1600? Do you mean people using carrier pigeons and faster ships to get to the exchange faster with some bit of information, or something else? Thanks.

[writser]

I'm curious: What counted as HFT back in 1600? Do you mean people using carrier pigeons and faster ships to get to the exchange faster with some bit of information, or something else? Thanks.

 

Yeah, I was being a bit cheeky. Indeed traders had informants on board of English warships, among other things. Those ships were faster and the traders hoped to get information about the contents of the actual transport ships before they arrived in the Netherlands. Also funny was that people who were known to have good sources sometimes fooled the market, i.e. they started selling, everybody joined in suspecting they had inside news and they bought back at a lower price.

 

What I always find fascinating about books such as these is how smart people were back in the days :) . For some reason I tend to think that anybody who lived more than a few centuries ago was basically retarded. Reading history books makes you realize that, apart from huge advances in science, humans haven't changed that much the past few centuries.

 

I also liked 'Extraordinary Popular Delusions and the Madness of Crowds'. Being Dutch I especially appreciated the chapter about the tulip mania, my favourite part being the foreign sailor who accidentally chopped up and ate a black tulip bulb because he thought it was an onion - costing his employer a few million dollars (inflation adjusted). There was also a chapter on street slang in London that could in theory still apply to any big city 200 years later.

 

London is peculiarly fertile in this sort of phrases, which spring up suddenly, no one knows exactly in what spot, and pervade the whole population in a few hours, no one knows how. Many years ago the favourite phrase (for, though but a monosyllable, it was a phrase in itself) was Quoz. This odd word took the fancy of the multitude in an extraordinary degree, and very soon acquired an almost boundless meaning. When vulgar wit wished to mark its incredulity and raise a laugh at the same time, there was no resource so sure as this popular piece of slang. When a man was asked a favour which he did not choose to grant, he marked his sense of the suitor's unparalleled presumption by exclaiming Quoz! When a mischievous urchin wished to annoy a passenger, and create mirth for his chums, he looked him in the face, and cried out Quoz! and the exclamation never failed in its object. When a disputant was desirous of throwing a doubt upon the veracity of his opponent, and getting summarily rid of an argument which he could not overturn, he uttered the word Quoz, with a contemptuous curl of his lip and an impatient shrug of his shoulders. The universal monosyllable conveyed all his meaning, and not only told his opponent that he lied, but that he erred egregiously if he thought that any one was such a nincompoop as to believe him. Every alehouse resounded with Quoz; every street corner was noisy with it, and every wall for miles around was chalked with it.

 

Quoz!

[Liberty]

Ok, cool. I had heard of those tactics. Was wondering if there was something else :)