It is believed to have been introduced to Europe in 1554, when an ambassador of the Holy Roman Emperor sent tulip bulbs and seeds to Vienna from the Ottoman Empire.
In 1637, the Dutch Republic erupted into a speculative fever over an unlikely item...the tulip.
Tulip Mania has become a legend synonymous with market euphoria and bubbles. But is this tale all it's cracked up to be?
Who's up for a story?
👇👇👇
It is believed to have been introduced to Europe in 1554, when an ambassador of the Holy Roman Emperor sent tulip bulbs and seeds to Vienna from the Ottoman Empire.
They soon became a coveted status symbol for the wealthy.
The Semper Augustus, with its colorful, flame-like streaks, was the most desired of them all.
Many financial innovations popped up during this time - the first stock exchange, for example.
But it was another financial innovation that would propel tulips into historical lore: the futures contract.
These contracts were freely-traded.
So in addition to the physical market for tulip bulbs, a thriving paper market was established.
Traders would meet in special taverns. In these taverns, no bulbs ever changed hands, just the paper contracts.
Speculative buying (buying on the expectation of further price increases) took hold.
The frenzy was on.
As with all financial bubbles, tulip mania became a self-fulfilling prophecy.
Rising prices beckoned new speculative traders into the market, which further drove up prices.
Prices continued to skyrocket through early 1637.
But as is common in speculative bubbles, the burst came suddenly.
When no buyers arrived at one trading session, the price of tulips fell precipitously.
Many refused to pay, arguing the paper contracts were unenforceable, leading to further panic selling and further price declines.
Tulip mania was officially over.
But many of his claims, including the devastating impact of the bubble on the Dutch economy, have been questioned or disproven.
In fact, she found only ~40 cases of people paying more than 300 guilders for a tulip bulb.https://t.co/INx2uwwozm
The Dutch Republic was not broken by the incident and very few people were truly impacted by it.
A fascinating historical incident, yes.
As sensational as the legend, no.
So as bitcoin continues its rise and the inevitable calls of "tulip mania" commence their lazy refrain, keep calm and carry on!
In the words of @PrestonPysh, "There go those tulips again..." https://t.co/gNWnDl1fBG
And turn on post notifications so you never miss a thread! https://t.co/JyqunaYxDe
1/ An Allegory of Finance
— Sahil Bloom (@SahilBloom) July 18, 2020
I have been posting a lot of educational (and humorous!) threads on finance, money, and economics.
My mission is simple: to demystify these concepts and make them accessible to everyone.
All of the threads can be found below. Enjoy and please share!
More from Sahil Bloom
From a young age, we are taught to view the world as black and white.
But many of life’s most important truths appear contradictory on the surface.
THREAD: 15 powerful paradoxes (on growth, business, careers, and life):
Sprezzatura (“Studied Carelessness”)
You have to put in more effort to make something appear effortless.
Effortless, elegant performances are often the result of a large volume of effortful, gritty practice.
Simple is not simple.
Slow Down to Speed Up
Want to speed up? Try slowing down.
Slowing down gives you the time to be deliberate with your actions.
You can focus, gather energy, and deploy your resources more efficiently.
It allows you to focus on leverage and ROI.
Move slow to move fast.
Learn More to Know Less
The wisdom paradox - the more you learn, the more you are exposed to the immense unknown.
This should be empowering, not frightening.
“The more I learn, the more I realize how much I don't know.” - Albert Einstein
Embrace lifelong learning.
Shrink to Grow
Growth is never linear.
In order to grow, sometimes you need to shrink.
Shedding deadweight may feel like a step back, but it is a necessity for long-term growth.
This principle applies to your career, startup, or life.
One step back for two steps forward.
But many of life’s most important truths appear contradictory on the surface.
THREAD: 15 powerful paradoxes (on growth, business, careers, and life):
Sprezzatura (“Studied Carelessness”)
You have to put in more effort to make something appear effortless.
Effortless, elegant performances are often the result of a large volume of effortful, gritty practice.
Simple is not simple.
Slow Down to Speed Up
Want to speed up? Try slowing down.
Slowing down gives you the time to be deliberate with your actions.
You can focus, gather energy, and deploy your resources more efficiently.
It allows you to focus on leverage and ROI.
Move slow to move fast.
Learn More to Know Less
The wisdom paradox - the more you learn, the more you are exposed to the immense unknown.
This should be empowering, not frightening.
“The more I learn, the more I realize how much I don't know.” - Albert Einstein
Embrace lifelong learning.
Lifelong learning is a competitive advantage.
— Sahil Bloom (@SahilBloom) June 6, 2021
But contrary to what you\u2019ve been told, lifelong learners are built, not born.
THREAD: 20 lifelong learning habits you can start developing today.
Shrink to Grow
Growth is never linear.
In order to grow, sometimes you need to shrink.
Shedding deadweight may feel like a step back, but it is a necessity for long-term growth.
This principle applies to your career, startup, or life.
One step back for two steps forward.
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1. Let's start option selling learning.
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Assume spot is at 27500
Sell 27100 PE & 27900 CE
say premium for both 50-50
If bank nifty will move in narrow range u will get profit from both.
Beautiful explanation on positional option selling by @Mitesh_Engr
Sir on how to sell low premium strangles yourself without paying anyone. This is a free mini course in
Few are selling 20-25 Rs positional option selling course.
— Mitesh Patel (@Mitesh_Engr) November 3, 2019
Nothing big deal in that.
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Now from that low and high keep 1-1.5% distance from strike.
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1/n
1st Live example of managing a strangle by Mitesh Sir. @Mitesh_Engr
• Sold Strangles 20% cap used
• Added 20% cap more when in profit
• Booked profitable leg and rolled up
• Kept rolling up profitable leg
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— Mitesh Patel (@Mitesh_Engr) April 12, 2019
Used 20% capital@44 each
2nd example by @Mitesh_Engr Sir on converting a directional trade into strangles. Option Sellers can use this for consistent profit.
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Already giving more than 2% return in a week. Now I will prefer to sell 32500 call at 74 to make it strangle in equal ratio.
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To all. This is free learning for you. How to play option to make consistent return.
Stay tuned and learn it here free of cost. https://t.co/7J7LC86oW0
