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DELIBERATELY LUNATIC BUSINESS TIPS
Bob Hoye June 12th, 2003
During financial manias, most advice is
sincerely motivated and, sadly, much of it turns to folly. In New York,
the phenomenon is explained by "The market never accommodates the
desires of the crowd.". This is quite polished compared to the same
observation made by old time promoters in the notorious Vancouver Stock
Exchange "The mooches are not allowed to make money.".
One of the great mooches in history was a
country oaf and longtime buffoon. Timothy Dexter married above his station
in life and in Pre-Revolutionary Massachusetts became the focus of
established society's scorn. Successful businessmen gave him deliberately
bad advice and in each case extraordinary luck turned a disaster to his
advantage.
The following short excerpt is a
financially entertaining piece in a book by Jay Robert Nash, Zanies,
The World's Greatest Eccentrics, published by New Century Publishers
in 1982.
Timothy Dexter - Merchant (1747-1806)
Born in Malden, Massachusetts on January
22, 1747, Dexter worked as an itinerant farmer, beginning at age eight
and, as a teenager, travelled to Boston where he became an apprentice
leather dresser. At age twenty, with his life's savings in his pocket, all
of nine dollars, Dexter walked forty miles to the thriving town of
Newburyport, where Elizabeth Frothingham, a wealthy widow of thirty-one,
took him into her home and subsequently into her bed as her husband.
Dexter fancied himself a shrewd
businessman and, using his wife's money, he bought up small quantities of
stocks at low ebb and sold them quickly as their values rose, not out of
shrewdness, however. He merely aped the wealthy stock investors of the
time. He did, however, manage to increase his wife's fortunes and his own
to the point where he began speculating in all manner of wild ventures.
Competitors laughed at the semi-illiterate
Dexter and his posturing ways, and thought to belittle him by giving him
lunatic business tips. By incredible luck, these tips turned into great
fortunes for Dexter. One merchant whispered in Dexter's ear that the West
Indies, where colonization was booming, was sorely in need of warming
pans, mittens and Bibles.
Having no concept of the torrid weather in
the West Indies, Dexter bought up more than 40,000 warming pans, and an
equal number of mittens and Bibles, shipping these to the West Indies. He
then waited for fortune to smile on him. It grinned widely and through its
teeth poured a shower of gold for the inept businessman.
When Dexter's shipments arrived in the
West Indies, there was a great religious movement beginning and his Bibles
were purchased at 100 percent profit. Russian trading ships visiting the
West Indies ports had their agents immediately buy up the mittens to the
last pair. The warming pans were at first a problem.
They sat idly in a warehouse until some
inventive planter discovered that, once the lids were removed, these pans
made ideal skimmers with which molasses could be ladled into vats; each
and every pan was sold for the highest price. These incredible sales
brought Dexter an estimated $150,000, making him enormously wealthy before
the beginning of the American Revolution.
Later, merchants in his town purposely
sought to ruin Dexter by urging him to invest every dime he possessed in
shipping coal to Newcastle, England. The unschooled Dexter, not knowing
that Newcastle was the center of England's coal-mining industry, hired
scores of sailing ships and filled their holds with soft Virginia coal,
shipping the cargoes to England.
Instead of becoming an international
laughing stock, Dexter's amazing luck held; a massive strike in Newcastle
had left the mines empty and there was a shortage of coal in the area.
When Dexter's ships arrived, his coal was purchased at enormous profits,
making him twice as rich as he had been.
Timothy Dexter went on making investments,
some of them practical, such as establishing the first manufacturing
center for the making of clay pipes. He bought stock in vital toll bridges
and purchased great tracts of land.
So wealthy did Dexter become that he began
to think of himself as a country squire, then a member of royalty. He
dubbed himself "Lord" Timothy Dexter and, emulating such men as John
Hancock and Thomas Jefferson, began donating money to charities and
churches, to earn himself the compliments of the community. Publicly,
Dexter became a much-admired man, the business community of Newburyport
especially marvelling at his astounding ventures. Privately, Dexter's life
became a ruin.
The zenith of Dexter's eccentricities was
reached when he decided to pen and publish his memoirs, a book entitled
"A Pickle for the Knowing Ones, or Plain Truths in a Homespun Dress"
which he paid to have published in 1802. The book, now a valuable
collector's item was, from beginning to end, one long, incoherent
sentence, without a single punctuation mark. The spelling was atrocious,
Dexter writing out his words phonetically. The "Lord" attempted to relate
all the worldly wisdom he had learned in his illustrious life.
This book was undoubtedly the most
incomprehensible, ungrammatical tome in the history of publishing. Yet
Dexter was proud of the work and ordered the printing of thousands of
copies which were widely distributed. Few read the book and those who did
ridiculed Dexter as a rich buffoon, a self-indulgent idiot who naively
destroyed the English language in an expensive fit of egomania. The lack
of punctuation in the memoirs was repeatedly pointed out to Dexter as the
crowning point of his moronic gestures.
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