"I will tell you how to become rich. Close the doors.......
........Be fearful when others are greedy. Be greedy when others are fearful."
Warren Buffett
World-Famous Bubbles
- Tulip Mania (1630s): Widely considered the first recorded speculative bubble, where tulip bulb prices in the Dutch Republic soared and then collapsed.
- The South Sea Bubble (1720): A speculative stock bubble in Britain involving the South Sea Company. Isaac Newton lost a fortune in the crash. This occurred alongside France's "Mississippi Bubble".
- The Wall Street Crash of 1929: The result of excessive stock speculation in the 1920s, which led to the Great Depression.
- Japan's Asset Price Bubble (1980s): Fueled by loose monetary policy, stock and land prices tripled before the bubble burst in 1990, leading to a prolonged period of economic stagnation.
- The Dot-Com Bubble (late 1990s-early 2000s): Characterized by speculation in Internet-based companies, driving the NASDAQ index to extreme highs before a significant crash. Most companies without viable business models failed, though some, like Amazon, survived.
- The U.S. Housing Bubble (mid-2000s): Fueled by subprime mortgages and lax lending standards, this bubble's burst in 2006-2007 led to the global financial crisis and Great Recession of 2008.
"Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments."
J. Paul Getty
CAPE Ratio
The CAPE Price Earnings Ratio, also known as the Shiller P/E ratio, assesses the stock market's pricing by adjusting past earnings for inflation over a decade. Popularized by Yale's Robert Shiller, it gives investors insight into whether markets are undervalued or overvalued based on historical earnings data.
Below is a CAPE PE chart from January 1871 to January 2026. 2 of the most devastating stock market bubbles in history are 1929 and 2000. January 2026 is the second highest CAPE PE in its 155 year history.