Reflections from the Mirror of Folly: The Adventures of Lord Londonderry in the Stock Markets of Paris, Amsterdam, and London in the bubbles of 1719-1720


Larry Neal
  • Speaker
College of Business, University of Illinois at Urbana-Champaign

Event Information

Type
Research Seminar
Programme
Date
Wed. 10 Mar. 2010
Contact
Time
12:00-13:30 hours
E-mail
Location
Mandeville Building T3-42
Number


Abstract

The experiences of Lord Londonderry, born Thomas Pitt, Jr., in 1688, during the bubble year of 1720 took him in succession through the Mississippi bubble in Paris, the South Sea bubble in London, a brief boom in Dutch West Indies stock in Amsterdam.  He even initiated a bubble company of his own, the Bahamas Society in mid-1720.  Although his speculations were undone time after time, in each case he managed to hedge his risks with a variety of stratagems available to him in the early capital markets of Europe.  His resiliency in response to each setback provides us insights into the risk management possible in the three major securities markets of the time, with each operating under distinct political and legal regimes.  In contrast to the moralizing of the Groote Tafereel der Dwarsheid “Great Mirror of Folly” moreover, Londonderry’s adventures demonstrate the value of animal spirits when they are combined with bourgeois virtues and perseverance.
 
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The Business History Seminar has been made possible by financial support from the Erasmus Research Institute of Management (ERIM) and the Vereniging Trustfonds Erasmus Universiteit Rotterdam.
 
Contact information:
 
Abe de Jong Ben Wubs
Email Email
 
Abe de Jong
Professor of Corporate Finance and Corporate Governance
  • Coordinator
Ben Wubs
Ben Wubs
Associate Professor at Erasmus School of History, Culture and Communication
  • Coordinator