Costa Bolsa

Some people asked me if I can write a little parable which explains the workings of the stock market to complete strangers who have never bought or sold any shares or derivatives in their lives. The short story below, entitled Costa Bolsa, is my attempt at meeting this challenge. I am by no mean the first person in the world to write similar tales, but I hope it is still educational to those who want to know more about the financial world.

The Mississipi Bubble

John Law (1671-1729) was a famous Scottish economist who originated economic ideas such as the real bills doctrine. Outside of the academic world, he was an equally impressive man. He was a brilliant gambler with a great calculating ability, which allowed him to win cards games across Europe for a living. In addition to that, he also killed a man in a duel, and enjoyed what one biographer called “extraordinary success with the opposite sex”. However, his most well-known achievement was his effect on the French economy when he was effectively the central banker of the country (Murphy, 1997).

Bidding Craze

Barry Diller is one of the most famous personalities in American media. The Time magazine called him the Miracle Mogul because he had phenomenal achievements in various media companies such as Paramount Pictures and Fox Television. In addition to this, he also mentored a significant number of executives who later became successful businessmen themselves, and as the media dubbed, they were collectively known as the “Killer Dillers”.

The Wine Formula

Orley Clark Ashenfelter is a professor of economics at Princeton University. Even though his academic interests are in labour economics, econometrics, and law and economics, he is also an amateur wine lover who spends a lot of time studying it and even published a research paper on wine prices. Later it occurred to him that this “amateurish” study of his would soon become his most famous discovery which upset the entire wine community for over a decade. (Ayres, 2006)

The Silva Method

José Silva (1914-1999) is one of the pioneers in the field of self-help psychology. Although he was an electronic repairman by training, he had an insatiable appetite for the study of psychology like hypnosis. Initially, he hoped to use his skill to increase the IQ of his children, but he decided to go even further in the development of psychic abilities after he became convinced that one of his daughters was a clairvoyant. (Stone, 1991)