The story of Tulip Mania is one best recounted by a Dutchman. I can do a pretty good Dutch accent but can’t write one. Use your imagination – the story is better. Drink a Grolsch.
Tulip bulbs are a bit special in that in the Northern Hemisphere they do not flower for seven to twelve years – beauty takes time. The flowers bloom for about a week in April or May. Bulbs appear between June and September. Physical sales – trade in physical flowers or bulbs are thus restricted to about half of the year. There’s more to it than that but it sets the scene.
In the 1600s, some clever and no doubt greedy chaps started selling futures – contracts to supply at a later date – and the speculation began. And prices went, in the words of The Duke in Layer Cake, a bit turbo. If you believe the story, the price of a single bulb at the height of the boom could feed your family, pay your mortgage, and put petrol in the Porsche for a year or more.
Of course, or in due course, the bubble busted. Orders were cancelled, fortunes were lost, etc, etc. And the Dutch economy entered a depression that lasted for several years. No doubt a few fortunes were made at the same time, but the market for tulips was never the same again. Because a tulip, a thing of beauty, is just that. Something very beautiful that you don’t really need.
Whilst the chaps at Liv-ex and all manner of others with a vested interest will suggest that the fine market has “corrected”, I’m not entirely convinced. We’re almost there, I think, and there are some canny purchases to be made for the brave and the rich but – and this is what it’s all about – wine is a bit like a tulip. It’s something very beautiful that you don’t really need. As a commodity it has the flaw of the tragic hero, and that flaw is simple: no one really needs it (not that there aren’t plenty of chaps – myself included – who can tell you otherwise).
I wrote this (above) weeks ago, before the Brexit Bounce which is, in my opinion, just that: a bounce. Courtesy of the weakness of sterling – and nothing else – UK merchants have been making hay in the export market, and even the worst payers on the other side of the planet have actually been settling their accounts on time. But – and time will tell – the brief afternoon of sunshine that the wine trade has enjoyed since the end of June might just be like the sunshine of the past few days. Englishmen that we are, we kid ourselves that a couple of sunny days make a summer.
Back to those Tulips. They are undeniably things of beauty. And they grow out of the ground to boot. Like grapes, they are evidence of God’s providence. Their quirky blossoming habits are maybe part of the test, part of the riddle. You can buy ten bulbs for a fiver or a bunch of the flowers for not much more. And they are very, very pretty. And, if you can find the greater fool, you might make a few quid out of them.