Tulip Bulbs for Your 401K?
NO? Then perhaps Alpacas, or fine red Herrings, are for you!
Has your broker recommended Tulip Bulbs for your 401k? If not, just wait! He will recommend them as a long term investment. It's just a matter of time!
In 1841/1842, Charles Mackay chronicled the tulip bulb cycles for us. He wrote about the incredible wealth being accumulated from prudent investments in tulip bulbs. All of the best people invested in tulip bulbs in the old days!
"The tulip,--so named, it is said, from a Turkish word, signifying a turban,-- was introduced into western Europe about the middle of the sixteenth century. Conrad Gesner, who claims the merit of having brought it into repute,--little dreaming of the extraordinary commotion it was to make in the world,--says that he first saw it in the year 1559, in a garden at Augsburg, belonging to the learned Counsellor Herwart, a man very famous in his day for his collection of rare exotics. The bulbs were sent to this gentleman by a friend at Constantinople, where the flower had long been a favourite. In the course of ten or eleven years after this period, tulips were much sought after by the wealthy, especially in Holland and Germany. Rich people at Amsterdam sent for the bulbs direct to Constantinople, and paid the most extravagant prices for them. The first roots planted in England were brought from Vienna in 1600. Until the year 1634 the tulip annually increased in reputation, until it was deemed a proof of bad taste in any man of fortune to be without a collection of them. Many learned men, including Pompeius de Angelis and the celebrated Lipsius of Leyden, the author of the treatise "De Constantia," were passionately fond of tulips. The rage for possessing them soon caught the middle classes of society, and merchants and shopkeepers, even of moderate means, began to vie with each other in the rarity of these flowers and the preposterous prices they paid for them. A trader at Harlaem was known to pay one-half of his fortune for a single root--not with the design of selling it again at a profit, but to keep in his own conservatory for the admiration of his acquaintance."
"The demand for tulips of a rare species increased so much in the year 1636, that regular marts for their sale were established on the Stock Exchange of Amsterdam, in Rotterdam, Harlaem, Leyden, Alkmar, Hoorn, and other towns. Symptoms of gambling now became, for the first time, apparent. The stockjobbers, ever on the alert for a new speculation, dealt largely in tulips, making use of all the means they so well knew how to employ, to cause fluctuations in prices. At first, as in all these gambling mania, confidence was at its height, and everybody gained. The tulip-jobbers speculated in the rise and fall of the tulip stocks, and made large profits by buying when prices fell, and selling out when they rose. Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney-sweeps and old clotheswomen, dabbled in tulips. People of all grades converted their property into cash, and invested it in flowers. Houses and lands were offered for sale at ruinously low prices, or assigned in payment of bargains made at the tulip-mart. Foreigners became smitten with the same frenzy, and money poured into Holland from all directions. The prices of the necessaries of life rose again by degrees; houses and lands, horses and carriages, and luxuries of every sort, rose in value with them, and for some months Holland seemed the very antechamber of Plutus. The operations of the trade became so extensive and so intricate, that it was found necessary to draw up a code of laws for the guidance of the dealers. Notaries and clerks were also appointed, who devoted themselves exclusively to the interests of the trade. The designation of public notary was hardly known in some towns, that of tulip notary usurping its place. In the smaller towns, where there was no exchange, the principal tavern was usually selected as the "showplace," where high and low traded in tulips, and confirmed their bargains over sumptuous entertainments. These dinners were sometimes attended by two or three hundred persons, and large vases of tulips, in full bloom, were placed at regular intervals upon the tables and sideboards, for their gratification during the repast."
"In England, in our day, strange as it may appear, a tulip will produce more money than an oak. If one could be found, rara in tetris, and black as the black swan alluded to by Juvenal, its price would equal that of a dozen acres of standing corn. In Scotland, towards the close of the seventeenth century, the highest price for tulips, according to the authority of a writer in the supplement to the third edition of the "Encyclopedia Britannica," was ten guineas. Their value appears to have diminished from that time till the year 1769, when the two most valuable species in England were the Don Quevedo and the Valentinier, the former of which was worth two guineas and the latter two guineas and a half. These prices appear to have been the minimum. In the year 1800, a common price was fifteen guineas for a single bulb. In 1835, so foolish were the fanciers that a bulb of the species called the Miss Fanny Kemble was sold by public auction in London for seventy-five pounds. Still more astonishing was the price of a tulip in the possession of a gardener in the King's Road, Chelsea"
Charles Mackay documented the tulip bulb price cycle as follows:
Bargains hunters take note! Tulip bulbs are very undervalued, and may be a major opportunity at this time.
Another overlooked investment for your 401k are Alpacas Yes, Alpacas are already being touted as the latest investment that's full of Gold Poop Alpaca byproducts, such as black gold (alpaca poop!). Have you got room in your 401k for Alpaca Poop?
A commission for the Broker, and Alpaca Poop for you! Hey, if this works for you, Ground Control to Major Tom!
Should this strategy fail, you can always eat the tulip bulbs, and barbecue the alpacas.
"People who had been absent from Holland, and whose chance it was to return when this folly was at its maximum, were sometimes led into awkward dilemmas by their ignorance. There is an amusing instance of the kind related in Blainville's Travels. A wealthy merchant, who prided himself not a little on his rare tulips, received upon one occasion a very valuable consignment of merchandise from the Levant. Intelligence of its arrival was brought him by a sailor, who presented himself for that purpose at the counting-house, among bales of goods of every description. The merchant, to reward him for his news, munificently made him a present of a fine red herring for his breakfast. The sailor had, it appears, a great partiality for onions, and seeing a bulb very like an onion lying upon the counter of this liberal trader, and thinking it, no doubt, very much out of its place among silks and velvets, he slyly seized an opportunity and slipped it into his pocket, as a relish for his herring. He got clear off with his prize, and proceeded to the quay to eat his breakfast. Hardly was his back turned when the merchant missed his valuable Semper Augustus, worth three thousand florins, or about 280 pounds sterling. The whole establishment was instantly in an uproar; search was everywhere made for the precious root, but it was not to be found. Great was the merchant's distress of mind. The search was renewed, but again without success. At last some one thought of the sailor."
"The unhappy merchant sprang into the street at the bare suggestion. His alarmed household followed him. The sailor, simple soul! had not thought of concealment. He was found quietly sitting on a coil of ropes, masticating the last morsel of his "onion." Little did he dream that he had been eating a breakfast whose cost might have regaled a whole ship's crew for a twelvemonth; or, as the plundered merchant himself expressed it, "might have sumptuously feasted the Prince of Orange and the whole court of the Stadtholder." Anthony caused pearls to be dissolved in wine to drink the health of Cleopatra; Sir Richard Whittington was as foolishly magnificent in an entertainment to King Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to the health of Queen Elizabeth, when she opened the Royal Exchange: but the breakfast of this roguish Dutchman was as splendid as either. He had an advantage, too, over his wasteful predecessors: their gems did not improve the taste or the wholesomeness of their wine, while his tulip was quite delicious with his red herring. The most unfortunate part of the business for him was, that he remained in prison for some months, on a charge of felony, preferred against him by the merchant."
Proper Diversification of your portfolio will ensure that you will eat something!
Important update! Mad Alpaca Disease (MAD) might be infecting all herds, and your alpacas may have to be destroyed.
Oh, well! Tulip soup anyone? Don't Panic! You will need the Alpaca Poop to grow more tulip bulbs. There is some evidence to show tulip bulbs are great with fine red herrings!
We have just discovered another investment for your 401k. Fine Red Herrings!
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"Wide diversification is only required when investors do not understand what they are Doing." - Warren Buffett