Ever heard of the 17th century Dutch tulip bubble?Ever heard of the 17th century Dutch tulip bubble? Tulips had been introduced to Holland from Turkey in the late 1500’s. The Dutch people loved them, and within a few decades, their love turned to obsession. Throwing aside all reason, people began “investing” in tulips like there was no tomorrow. At the height of the market, tulip bulbs sold for as much as six years of an average worker’s annual income. Tulips were trading for the same price as 12-acres of land, and in some cases, for the price of a small estate. Yes, we’re talking about one tulip.
Of course, it all came tumbling down, and the price of tulips eventually returned to the price of a common onion. Thousands of “investors” lost their homes, their fortunes, and their self-respect.
So what does this have to do with investing?
Everything.
As a lifelong serial entrepreneur and investor, I have been on a decades-long quest for the perfect investment—or the perfect business—though I wasn’t always aware of it.
- I invested in oil and gas. ROI: -100%. Lost hours: hundreds.
- I invested in a wireless internet company. ROI: -100%. Lost hours: a thousand.
- I invested in and built a nurse staffing company. ROI = 0%. Lost hours: countless.
- I invested passively with a genius who came up with a scheme to multiply profits through currency exchange. He exchanged his mansion for a 153-year term in the Federal Pen. (He still won’t tell anyone where he hid his 2,000 investors’ $18 million.)
- I invested in speculative penny stocks with two companies that were about to blow up. They blew up alright, but not in the way I planned.
