etf

Confusion of Confusions: An adaptation of the classic masterpiece by Joseph Penso (de la Vega) on the 17th century Amsterdam Stock Exchange

etf

A few weeks ago, I wrote about the origin of stock trading in Amsterdam, so it is only appropriate that I follow up with a blog on the very first book (and still one of the very best) written on investing. Framed as a dialogue between a philosopher, merchant, and a shareholder, it paints a vivid portrait of the inner workings of the Amsterdam stock exchange. The title (which is a play of words based on the beginning of the biblical book of Ecclesiastes) refers to the enigma of rules and customs that governed interactions among participants at the exchange. One could not ask for a better guide through the labyrinth than Penso, who, in his own words, comes to “entertain one, warn another, and pillory many.”


As Sephardic Jewish refugees from the Spanish Inquisition, Penso’s family settled in Amsterdam where he became a respected merchant, author, playwright, and poet. The reader can immediately perceive how the author places himself into each of the three characters of the dialogue. First published in 1688, this book abounds with historical, literary, mythological, and biblical references consistently used in the wittiest way imaginable. In my humble opinion, Penso can be thought of as the Oscar Wilde of his day.


As the shareholder, Penso describes the types of securities that were traded, including the somewhat esoteric options contracts. He shows us all the tricks of the trade such as front-running large orders and spoofing the market with fake news to achieve a more favorable trading price. And of course, as we have seen with all of these antique books on investing, there is nothing new under the sun. It’s just that the way he tells it is "insanely great," as the late Steve Jobs would say.