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Wilem van der Meer was born on March 20, 1602, the only child of Dirk and Agnes who would survive to adulthood. Dirk was a fifth-generation cabinet maker with a small shop attached to his home on the outskirts of Amsterdam. Dirk was a respected member of the Carpenter’s Guild, known for the quality of his cabinets and the specialized tools he and his ancestors had developed.*
Wilem demonstrated an early interest in artistic and detailed woodworking. At 13, his father secured him an apprenticeship with the Joiner’s Guild, a group focused on intricate woodwork like cabinetry and fine furniture. After five years as an apprentice and then journeyman, Wilem completed his “Masterpiece.” This original and significant work showcased the journeyman's best abilities, and upon the guild’s approval, Wilem was granted the title of master, allowing him to set up his own workshop.
Word of Wilem’s masterpiece kas (wardrobe) spread through Amsterdam, and it became known as the “van der Meer Kas.” He utilized eight different types of wood in the design of the doors, each panel intricately carved, including a nativity scene in the pediment (the top center decorative piece). The matriarch of the prominent Van der Muelen family, one of the original investors in the Dutch East India Company (the first publicly traded security) offered a significant sum to purchase the piece. Wilem refused, using the kas as an example and model of the work he and his father could produce. Together, they began creating custom cabinets and furniture for the wealthiest and most prominent families in Amsterdam.
In 1630, Dirk and Agnes succumbed to smallpox, leaving Wilem to carry on the family business.
He moved into the family home with his young family and continued his craft, now with a growing reputation.
Wilem first heard of tulips and tulip bulbs at a Joiner’s Guild meeting in late 1634. Some of his fellow craftsmen had purchased bulbs at auction and were already experiencing nice profits.
Over the next year, more people began buying and trading these rare bulbs. Wilem purchased his first bulbs in the spring of 1635, and by the end of the year, he estimated that their value had more than quadrupled. Enticed by visions of wealth, Wilem borrowed money against his business and tools to purchase more, focusing on rarer and more valuable varieties. He dreamed of profits that would allow him to build a home alongside his wealthy patrons in Amsterdam.
As prices for certain bulbs continued to rise exponentially, some single bulbs were selling for amounts equivalent to Wilem’s annual income. At the height of Tulip Mania, the market seemed unstoppable. But in late 1637, the tulip market crashed. Buyers suddenly realized that prices were unsustainable and stopped purchasing bulbs, leading to a rapid and catastrophic drop in prices.** As the market collapsed, Wilem and his fellow speculators were ruined. His debts, incurred through speculation, led to the loss of his family business, home, and prospects.
The Tulip Bubble was the first recorded financial bubble in a long line of speculative exuberance that has disrupted families. Wilem's story can serve as a cautionary tale on the dangers of speculation. The same speculative fever that drove Wilem to invest in tulips has appeared in other forms across the centuries.
This was experienced more recently the Dot-com Bubble of the late 1990s and early 2000s, when investors poured money into internet companies with little regard for profitability, driven by the belief that technology would revolutionize everything. When the bubble burst, it wiped out billions of dollars in wealth, leaving many with nothing.
The housing bubble resulted from a boom in prices fueled by easy credit, speculative investment, and complex financial instruments, leading to an unsustainable rise in property values. The bubble burst in 2007-2008, triggering the global financial crisis and the Great Recession.
The Tulip Mania may seem ridiculous today, but is it any more so than the Non-fungible Token (NFT) boom of just a few years ago? In March 2021, Twitter co-founder and then-CEO Jack Dorsey sold his first-ever tweet as an NFT. The tweet, which read "just setting up my twttr," was from March 2006. It sold at auction for $2.9 million. In April 2022, the purchaser decided to auction the NFT for charity hoping to get around $50 million. However, when the auction ended, the highest bid was $280.***
These examples, like Wilem’s experience, highlight the risks of investing based purely on speculation. While the allure of quick gains is tempting, it often leads to catastrophic losses when market realities set in. The key to successful investing lies in patience, research, and a focus on long-term value rather than short-term hype.
We are consistently evaluating new opportunities, but we insist on ensuring that our investment processes are grounded in disciplined principles based on your unique situation rather than speculative trends.
As always, please let me know if you would like to discuss rare tulip bulb bubbles or anything else on your mind.
Thank you,
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