Charles Ponzi and the Postal Service

The story of the man who put the 'Ponzi' in 'Ponzi scheme'

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1/ Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, a.k.a. Charles Ponzi, was an italian swindler and con-artist.

Born in 1882 in Italy, he became notorious for his money-making fraudulent schemes in North America in the 1920s.

2/ He arrived in Boston in late 1903 with $2.50 in his pocket.

After many professional failures, he moved to Montreal in 1907 and started working as a bank teller at Banco Zarossi, where he rose to the position of bank manager.

3/ This is where he first witnessed the bank's scheme, where Zarossi was funding interest payments using deposits from newly opened accounts instead of investment profits.

4/ Ponzi served 3 years in jail for check forgery and returned to the US after his release.

However, he got involved in smuggling illegal immigrants into the country landing in prison for another 2 years, moving back to Boston after that.

The British Railway Mania

How a disruptive technology created the biggest speculative bubble in the history of England

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1/ Railways were the most disruptive technology of the 19th century, known as the "railway age", transforming England from an agricultural to an industrialized nation.

2/ The development of railway infrastructure and locomotives started at the end of the 18th century but experienced immense growth after 1830.

3/ Hundreds of railway related bills were passed every year with proposed rails totaling 10,000 miles, a third of which was never built due to poor financial planning, competition, or fraud.

4/ In the mid-1840s, the Bank of England cut interest rates rendering government bonds unattractive, and investors more willing to rush in the railway investments.

Isaac Newton: A brilliant scientist, a terrible investor

How Issac Newton lost $4 million due to the first stock market bubble in history and insider trading

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1/ Sir Isaac Newton is considered one of the most influential scientists of all time and a key figure in the scientific revolution.

He was a mathematician, physicist, astronomer, theologian, and author.

2/ The most prominent part of his work was the formulation of the laws of motion and the law of gravity.

However, his most prominent failure was losing an entire fortune in the first stock market bubble in history, the South Sea Company in 1720.

3/ Newton was usually a cautious investor.

Before 1720 most of his investments were in safe and reliable securities, various government bonds that delivered a regular stream of income, and shares in a few of the larger companies on the exchange, including South Sea Co.

4/ Newton began in 1720 with stocks and bonds worth approximately £32,000 (close to $6-million in current U.S. dollars).

This year I started writing daily on Twitter about finance and investing and gained more than 500 followers in 2 weeks

Here are the main things I learned on Twitter growth

1. Brand
2. Content
3. Engagement
4. Networking
5. Tools

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1. Brand
You need to find a niche you are interested in and focus on it
E.g. finance, fashion, travel, etc.

Adjust your profile by adding a profile picture and banner that will show someone what your profile is about and why they should follow you.

Add a linktree that will have all the links for your blog, website, newsletter, etc.

2. Content
Don't wait to gain followers before posting. Nobody will follow you if they see an empty feed.

Start posting daily focusing more on single tweets or threads that provide insights on a topic people in your niche might be interested in.

At first, it will feel like talking to a mirror.

Have a pinned tweet, which will be your best one that will catch the attention of someone visiting your profile.

The Baltimore Stockbroker Parable

How one stockbroker managed to achieve a 100% success rate in predicting stock movements

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1/ One day you receive an unsolicited newsletter from a stockbroker in Baltimore.

It contains a tip that a certain stock will soon rise sharply.

A week passes, and as he predicted, the stock goes up.

2/ The next week, you get another newsletter from the stockbroker, this time with a tip about a stock that will fall.

And next week, the stock craters.

3/ Ten weeks go by, and each week you receive a tip about a stock that will go up or down.

Every time the prediction comes true.

4/ On the 11th week, you get a solicitation to invest your money with the Baltimore stockbroker for a hefty commission, justified by his successful predictions.

That sounds like a great deal, right?

California Gold Rush, the biggest get-rich-quick scheme in American history

How Sam Brannan became the wealthiest man in California without selling a single ounce of gold

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1/ On January 24, 1848, a carpenter named James W. Marshall discovered gold at John Sutter's Mill in Coloma California (close to present-day Sacramento), where he was employed.

Californian residents were the first to rush into the area in late 1848.

2/ By 1849, the word had spread around the world with almost 100,000 gold-seekers and merchants immigrating to California from across the US and abroad, being named forty-niners.

By 1855 the number reached 300,000. It was the biggest immigration movement at the time.

3/ The gold influx into the money supply system rejuvenated the country's economy giving statehood to California.

The rise in population led to an expansion in various sectors, such as agriculture, ranching, and merchandising.

4/ The San Francisco population exploded from 200 residents in 1846 to 30,000 in 1852.

Many cities and infrastructure was built across California.

New methods of mining and transportation were developed creating a technological boom.

Companies to AVOID

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Some tips by Peter Lynch, one of the most successful investors of all time, on which companies to avoid investing in

1. Hottest stock in the hottest industry, with nothing but hope and thin air to support them (MJ stocks in 2017, internet stocks in 2000, electric vehicles in 2020)

Deteriorating balance sheet.

When analysts predict double-digit growth forever, the industry goes into decline.

2. Product/service, not protected by patent or niche, easy to be replicated by competitors, especially in a high-growth industry.

3. The "Next Something"

Everyone wants the next $TSLA, $AMZN, $GOOG

Most likely you won't find a company to replicate their business with that success.

4. Diversification = companies wasting capital on foolish acquisitions, in new sectors they do not understand, and in companies that are overvalued.

Tulips, the #Bitcoin of the 17th century

How a pandemic, FOMO, and speculation made a flower worth the same as a mansion

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1/ During the beginning of the 1630s in the Netherlands, tulips were difficult to cultivate and preserve.

This made them a luxury good reserved for the rich and affluent of the upper class living in mansions with big gardens.

2/ The tulip market was not organized nor regulated, as other trades, which made it easy for professional growers to enter it.
Due to the international trade expansion, the growers starting cultivating rare varieties, to achieve higher prices.

3/ The biggest change occurred when florists used tulip bulbs as speculative assets.

The market expansion led to forward bulb-purchase contracts, thus enabling trading during the entire year, and not just during the summer months when tulips bloom.

4/ Easy loans and credit for forward contract purchases led many to enter the market since not much capital was required.

People from the lower economic class (maids, servants, craftsmen) could not resist the temptation for some quick profits and entered the speculative market.