A biblical manuscript, a rare collection of dialogues between stock brokers, and a journal that makes observations of the on-goings at Amsterdam Stock Exchange, considered among the world's first modern stock exchange. That could perhaps be a modest and succinct introduction of this book named the Confusion of Confusions.
This first treatise on the innate workings of a stock exchange has been put up for bid at a Sotheby's Auction. A crore, is what the auction organizers expect from it's bid.
'Confusion de Confusiones' (Confusion of Confusions), author Joseph Peso de la Vega's work is featured as the world's first and is expected to fetch at least $190,000, a reserve bid price. At that price the book is valued Rs 1.34 crores (Rs 71 per dollar). Agents connected to the auction say the book could fetch between $200,000 to 300,000 (Rs 1.42 to 2.13 crores).
Meanwhile, Vega's book is the costliest one on the lot. It is priced higher than even Shakespeare's Comedies, Histories, and Tragedies, an original copy of the second impression that goes to bid at a range of $100,000 to $150,000. The auction results are expected to be announced on 17 December.
Author Joseph De La Vega Image Courtesy: Wikimedia Commons
Sotheby's website says this book is a "legendarily rare first edition" of the first book on a stock exchange. "The 1688 first edition of Confusion de Confusiones probably survives in fewer than ten copies," the website says.
Vega himself is a celebrated figure in the world of exchanges and stock markets. The Federation of European Securities Exchanges in 2000 constituted an award in his honor, bestowing annual De La Vega Awards to European researchers for exemplary research on securities markets of Europe.
The Old Exchange of Amsterdam and Scene of Confusion. Painting by Job Berckheyde. Source: Wikimedia commons
The 416 year old Amsterdam Stock Exchange (founded 1602) merged with Paris and Brussels Stock exchanges on 22 Sept 2000. Built by the Dutch East India Company, it was considered to be the first exchange that began trading in securities as opposed to industrialisation. The consideration because French historian Fernand Braudel argued that negotiable state loan stocks including municipal stocks were prevalent as early as the 13th century.
Selby Kiffer, a specialist in books and manuscripts at Sotheby and in charge of the book's sale said Vega's writings were aimed at the Sephardic Community. Vega himself was a Sephardic Jew who had migrated from Spain to Amsterdam.
Published in 1688, Vega's writings are brilliant anecdotes and observations from the trade. The book written in Spanish provides explanations of the various mechanics of the exchange, majorly descriptions for puts, calls, pools, and manipulations. The book also offers investment advice.
Surprisingly the man who wrote the first manuscript on the world's oldest stock exchange was not a regular trader. In the book's preface, Vega says his outlook was to dispel confusion about the exchange. Kieffer in a media report is quoted as explaining that Vega's book offers an inside view of the trade.
"Vega was not principally a trader himself, but he did trade sometimes and spent time on the market... It was kind of meant to lift the veil and explain what was going on," adds Kieffer.
Image Courtesy: Sotheby's
Vega, Kiffer says, "describes the market as an honest operation and an honorable business, but he nevertheless warns readers that there are some people who will try to take advantage of you." The text is written as a series of dialogues among what Sotheby's describes as "stock characters," including a philosopher, a merchant, and a shareholder.
This gem of a manuscript replete with great accuracy and keen insights was little known until German economist Richard Ehrenberg published an influential essay in 1892, leading to translations into German and Dutch in 1919 and 1939. Vega's writings received popular attention after an abridged translation in English by Hermann Kellenbenz published by the Kress Library of Business and Economics was published in 1957..
The Kress Library is known to possess one of the half-dozen copies existing in the world. This, written by Arthur H Cole from the library of the Harvard University for the preface of an English translation of Vega's Confusion of Confusions.
An engraving depicting the Amsterdam Stock Exchange in 1612. Image Courtesy: Wikimedia Commons
For amateur traders enamored by advisories on Whatsapp, Vega's book offers pearls of wisdom. De la Vega makes the reader acquainted not only with the history of speculation but also various types of speculative transactions used at that time. Vega's four principles enshrined in the book apply to any amateur trader of the day.
- Never give anyone the advice to buy or sell shares, because, where perspicacity [shrewdness] is weakened, the most benevolent [kind] piece of advice can turn out badly.
- Take every gain without showing remorse about missed profits, because an eel may escape sooner than you think, It is wise to enjoy that which is possible without hoping for the continuance of a favorable conjuncture [state or combination of events] and the persistence of good luck.
- Profits on the exchange are the treasures of goblins. At one time they may be carbuncle stones, then coals, then diamonds, then flint-stones, then morning dew, then tears.
- Whoever wishes to win in this game must have patience and money, since the values are so little constant and the rumors so little founded on truth. 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 who, stunned by the thunder tries to flee. It is certain that he who does not give up hope will win, and will secure money adequate for the operations that he envisaged at the start. Owing to the vicissitudes, many people make themselves ridiculous because some speculators are guided by dreams, others by prophecies, these by illusions, those by moods, and innumerable men by chimeras."