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In the week of the Chelsea Flower Show, I read of the extraordinarily rare Alice Artindale Delphinium bred by William Artindale in 1936. So rare that it is believed only 12 exist. It was rediscovered about 15 years ago by Graham and Nina Austin who run a specialist delphinium nursery in Hertfordshire. Apparently, propagation is notoriously difficult as it effectively stops growing if cuttings are taken, hence its rarity.

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This rarity reminded me of the Dutch Tulip Mania during the 1630s,  when certain unusual flame-coloured tulips became status symbols. Often described as one of the first recorded financial bubbles, the Dutch went mad for these things, an early case of FOMO.  It was said that one variety, the Semper Augustus, went for crazy multiples in price, enough even to buy a mansion. So it follows what we have seen many times since in investment markets, people began trading tulip contracts aggressively with futures style contracts giving speculators the right to buy bulbs at a later date at a fixed price in the hope they would continue to appreciate in value. As per usual, leverage was often used. Inevitably, as with all these things, whilst some early investors would undoubtedly have done well, those left holding the bulbs were financially ruined when buyers stopped appearing at auctions around 1637 and the bubble burst.

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The Tulip Mania became a lasting symbol of irrational exuberance , yet one in which lessons seemed not to have been learned, as later demonstrated in events such as the South Sea Bubble in 1720, the Wall Street Crash of 1929 and the Dot-Com bubble of 2000.

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“Nothing so undermines your financial judgement as the sight of your neighbour getting rich.” J.P. Morgan

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Comments from James Scott-Hopkins, Founder of EXE Capital Management.

The views are those of the author only.

The above does not constitute a recommendation to buy specific funds or assets. The value of investments can fall as well as rise. Past performance is no guarantee of future returns.‍

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