page_title: Joseph de la Vega
section_title: Confusion of Confusions (1688)
hierarchical_section_title: Joseph de la Vega / Confusion of Confusions (1688)
context_page_description: José or Joseph Penso de la Vega, best known as Josseph de la Vega, was a Spanish or Sephardi Jewish merchant in diamonds, financial expert, moral philosopher and poet, residing in 17th century Amsterdam. He became famous for his masterpiece Confusion of Confusions. Vega's work is the first study written about the Amsterdam Stock Exchange and its participants, the shareholders. In it he describes the whole gamut, running from options, futures contracts, margin buying, to bull and bear conspiracies, even some form of stock-index trading. The publication of Confusion de Confusiones helped lay the foundations for modern fields of technical analysis and behavioral finance.
context_section_description: The book is written in Spanish; its original title is Confusión de Confusiones. It was printed in Amsterdam, but published in Antwerp. Although not a descriptive account of the process of stock trading, Joseph presented the history of speculation in stocks and acquainted the reader with the sophisticated financial instruments used. The dialogue format allowed the reader to understand the respective perspectives of the various market participants and the intricacies of speculation and trading. There is evidence in Confusion de Confusiones of three major biases: herding, overconfidence and regret aversion.
  Joseph also came up with four basic rules of the share market that are still of the greatest relevance today:
  The first rule in speculation is: Never advise anyone to buy or sell shares. Where guessing correctly is a form of witchcraft, counsel cannot be put on airs.
  The second rule: Accept both your profits and regrets. It is best to seize what comes to hand when it comes, and not expect that your good fortune and the favorable circumstances will last.
  The third rule: Profit in the share market is goblin treasure: at one moment, it is carbuncles, the next it is coal; one moment diamonds, and the next pebbles. Sometimes, they are the tears that Aurora leaves on the sweet morning's grass, at other times, they are just tears.
  The fourth rule: He who wishes to become rich from this game must have both money and patience.
  Confusion de Confusiones remained little known until the German economist Richard Ehrenberg published an influential essay in the 1892 Jahrbücher für Nationalökonomie und Statistik, “Die Amsterdame Aktienspekulation un 17. Jarhhundert.”
  In his honour, the Federation of European Securities Exchanges (FESE) awards since 2000 the annual De La Vega Prize to "young European researchers who distinguish themselves by outstanding research on the securities markets in Europe".
caption: Courtyard of the Amsterdam Stock Exchange by Emanuel de Witte (1653)
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