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September 13, 2004

News & Opinion: As Summer Fades Away...

By: 800-CEO-READ @ 5:31 PM – Filed under: Management & Workplace Culture

Summertime is often an opportunity to catch up on books one has been meaning to read for some time. So I did this past summer as well. One such book, Tulipomania by Mike Dash, proved quite intriguing. The writing is perhaps a little bit dry, but the story is quite fascinating. Most of us have, of course, heard about the boom in tulip prices that happened in Holland during the 1630s, but there has been very little specific information written about it.
It is not your typical business book since it sits at the intersection of history, botany and economics. Still it provides a riveting historical context for what happened duirng the boom days of the Internet-craze. I found it particularly interesting that the tulip craze only truly took off when it become OK for tulip traders to pay for tulip bulbs with other tulip bulbs. It was this specific market-acceptance that paved the way for a mind-boggling escalation in prices since it was easy for one bulb to rise in value by 100% in a short period of time if all you had to do was pay for it with another bulb. This is of course reminiscent of the dotcom days when they only way you could really acquire an Internet company was with stock from another Internet company. It allowed for an explosion in asset values. Of course, in the end, someone is always left holding the bag at the end of the ride. In Tuilpomania this holding the bag event is specific and traced to a specific night at a pub