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Home > Capital Markets Thinkers > Joseph de la Vega

Capital Markets Thinkers

Joseph de la Vega

Author of Confusion of Confusions, the oldest book on the stock exchange business


Born in Espejo, Spain.
Publication of the play Pardes Shoshannim.
Publication of Triumphos del Aguyla y Eclypses de la Luna.
Publication of La Rosa, Panegyrico Sacro, Hécho en la Insigne Academia de los Sitibundos.
Publication of Rumbos Peligrosos por Donde Navega con Titulo de Novelas la Cosobrante Nave de la Temeridad.
Publication of Discursos Academicos, Morales, Retoricos, y Sagrados Que Recitó en la Florida Academia de los Floridos.
Publication of Confusion of Confusions.
Publication of Retrato de la Prudencia, y Simulacro del Valor, al Augusto Monarca Guilielmo Tercero, Rey do la Gran Bretaña.
Died in Amsterdam.

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Life and Career

Joseph de la Vega (also known as Joseph Penso) was a businessman, writer, and philanthropist who lived in 17th century Amsterdam in a community of Portuguese Jews whose ancestors had fled the Spanish Inquisition. He wrote his first play, Pardes Shoshannim, when only 18 and went on to become a respected merchant, and a Spanish poet. He became famous for his masterpiece, Confusion of Confusions, the oldest book ever written about stock exchanges. He was elected to several posts in the Jewish, and in the financial communities, including the honorary offices of President of the Academia de los Sitibundos, and Secretary of the Academia de los Floridos. He maintained an extensive correspondence with a number of sovereigns, and other prominent contemporaries.

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Key Thinking

  • De la Vega’s best-known work, Confusion of Confusions, consists of a series of dialogues between a philosopher, a merchant, and a shareholder, describing the workings of the Amsterdam Stock Exchange, the world’s first stock exchange.

  • It provides a context and understanding of the market participants, the intricacies of speculation and trading, and the financial instruments used at the time, while displaying an affection for the market and its greedy speculators.

  • He presents four rules of speculation that are still relevant today: never advise anyone to buy or sell shares; accept both your profits and losses; profits from share dealing never last; you need both money and patience.

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In Perspective

  • Confusion of Confusions was one of the first analytical attempts to describe the different kinds of financial operations taking place at the time. It explores the impact of crowd behavior, and trading trickery on the financial markets.

  • Describes the diverse tactics and schemes used by investors playing the Amsterdam market, even though there were only two stocks being traded—the Dutch East India Company and the Dutch West India Company—businesses that depended on risk-laden expeditions around the world.

  • He shows that, even then, there were bulls, bears, panics, bubbles, short selling, margin trading, and most of the other features of modern exchanges.

  • Discusses trading operations that were complex, involving both options and forward trades; such trading was used both to hedge, and to speculate.

  • Shows how many facets of investing are timeless, as he recognizes the value of information and analysis, and how speculators tend to be either optimists or pessimists; de la Vega’s advice is to maintain a balance between the two.

  • Explains how government regulation banned short selling, but that this was ignored as short sellers were often needed to make markets.

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“What really matters is an awareness of how greed and fear can drive rational people to behave in strange ways when they gather in the marketplace.”

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Further reading on Joseph de la Vega


  • Mackay, Charles, and Joseph de la Vega. Extraordinary Popular Delusions and the Madness of Crowds and Confusión de Confusiones. New York: Wiley, 1996. The two classics combined in one volume, with a translation of De la Vega’s first-hand account of the market manipulations of the Amsterdam Stock Exchange.

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