Tulip mania 3 of 3
A government commission declared that tulip contracts could be annulled at 3.5% to stabilize the price. The most priced bulb of them all the Semper Augustus finally recovered to pre mania levels, but the prices for plain breed bulbs never did and so does the financial state of the smaller speculators. The tulip mania is one of the failed speculation stories that is being remembered as decades pass by. However, when a market boom emerges everybody seems to ignore these facts that capitalist markets always extend and retracts. By the end of each cycle everybody then realizes the same behavioral pattern of the speculator. Vast wealth lost through risk, some gained and some goes insane, a common scene which can be avoided. But human emotions only look at the present time when opportunity presents itself at their doorsteps, forgets about hard learned collective lessons from the past that could have retained their risk taking appetite into sane levels. The Tulip mania is a perfect example of intrinsic value investing. Any investment medium has got to have a ceiling in contrast to its book or utility value. Anything above that is just another mania which cannot be justified by its extravagant price.
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