What is the most powerful thing on earth? Is it money? Is it trade? Is it military might?
While all of those things are important, none of them are as important and timely, accurate, and precise access to critical information.
Time for a little history lesson.
In 1815, Napoleon Bonaparte was finally defeated in the battle of Waterloo. After nearly 20 years of successful military conquest known as the Napoleonic wars, a British and Prussian army, finally, dealt a swift and decisive victory of the french. This battle carried enormous political and economic implications throughout Europe.
Had Napoleon won the battle of Waterloo, England, who at the time was already under considerable duress, would be in danger of a total economic collapse. Not only would she had lost significant international influence and prestige, but English citizens would have their personal and financial stresses pushed to breaking points.
Defeat at the hands of the french surely would have resulted in the lack of ability for England to repay her great debts incurred from the war, thus, British government bonds were being traded in careful and anxious trepidation in wait of news of the outcome of the battle of Waterloo.
Enter Nathan Rothschild. A name you’re likely very familiar with. It was well known that the Rothschild’s were able to move considerable amounts of cargo around the battle lines via their private courier service, however, this also enabled them a unique position, where they could rapidly move and discern information which could be invaluable in dealings of international finance.
The news of Napoleons defeat at the battle of Waterloo arrived in London in early morning on June 20, 1815 and directly into the hands of the Rothschild’s. This was approximately a full 24 hours before the duke of wellingtons own personal courier arrived with the news.
Upon first light of that same morning, Nathan Rothschild hurriedly took up his place at the London stock exchange and every eye in the market place turned to him, in expectation of what would happen next. Nathan started down at the floor despondently, and with a somber and pained expression, began to sell off his bonds.
Whispers flooded the crowded room. “He’s selling?” “He’s selling!” “Napoleon must have been victorious, England has been defeated!” “Our bonds are worthless!” “SELL, SELL it all before its too late.”
The market took an immediate downturn and prices tumbled, and again, Nathan sold his bonds. Prices found new lows and again Nathan continued to sell, until at last the price had collapsed to its rock bottom and in one quick move, Nathan Rothschild reversed his position and purchased the entire market of English government bonds. In the course of a few short hours, the Rothschild’s had become the dominant holders of England’s entire debt at but a very little fraction of its actual worth.
What’s the take away here? As an investor, the majority of us, are the English citizens standing around in the stock market, waiting to see what the Nathan Rothschild’s of the world will do, so we can form opinions and react based on our conclusions. The smartest people in this world understand market psychology and human psychology and the power of information…and they have access to information that you and I won’t know until the biggest plays have already been made.
Consider this well, and remember to never let your emotions control how you trade.
wonderful read i have studied this for years and years, the owners of an entire empires debt fair play t o the bloke