In Dalal Street’s gold rush, some winners are selling the shovels

Subscribe to enjoy similar stories. New Delhi: His name never crops up in modern investment literature, and yet in a more clear-eyed world, Samuel Brannan would have been anointed the patron saint of market acumen. Or at least would have chapters dedicated to him in business school textbooks.

Brannan was a prominent businessman and Mormon preacher whose name is inextricably linked with one of the defining episodes of the 19th century—the great California gold rush. Legend has it that one crisp morning early in 1848, some customers walked into a store operated by Brennan in Sacramento, California. After making their purchases, they stunned Brennan and the store employees by paying for the goods in gold! Upon enquiries, Brannan learnt that the customers worked for a landowner and they had stumbled upon gold deposits at a small settlement about 36 miles northeast of Sacramento.

Ever the sceptic, the 28-year-old Brannan decided to go to the spot himself and verify the claims. Once there, he found the news to be true and learned that “there was more gold than all the people in California could take out in 50 years." Brannan was, quite literally, standing on a huge gold mine. But what he did next ranks among the most counterintuitive moves in modern financial history.

Instead of plunging into the nascent gold rush himself, he hurriedly set up a store selling picks, shovels, pans and other supplies. To stoke the frenzy, he famously paraded through San Francisco streets waving a vial of gold, shouting, “Gold! Gold! Gold! Gold from the American river!" Very soon, a tide of hopefuls began streaming towards California in search of fortune. By the middle of the year, around three-quarters of the male population had left San