Confusion of Confusions

What actually happened

Joseph de la Vega, a Sephardic merchant-poet in Amsterdam, wrote Confusion de Confusiones about the trade in Dutch East India Company shares: the ducaton derivatives, the bull and bear cliques, the rumor mills, the exquisite psychology of holding a losing position.

His rules read like modern behavioral finance: never advise anyone to buy or sell; take every profit with regret you didn't take more; whoever wishes to become rich in this game must have both money and patience. The 2014 behavioral-finance literature cites him as the field's accidental founder.

He wrote it, he said, partly to warn his own community, months before the crash of 1688 proved his point.

The play to remember

Markets haven't changed because people haven't. Every 'new' behavioral bias was already on the Amsterdam exchange in 1688.