There are few consequential events of bubble. Some could become the best lesson for investors to learn. These include the dot-com bubble in the 1990s, the housing bubble between 2007-2008 as well as the Holland bubble around 1634 to 1637. This article would highlight key case in the bubble historically and in the modern day.
The first notable event of the bubble was Tulip Mania in the 1600s. The occurrence of Tulip Mania could unexpectedly bring down the economy. It began when a botanist brought tulip bulbs from Constantinople. The botanist aimed at doing scientific research about the tulip bulbs. Unexpectedly, neighbors stole the bulbs and sold them. The wealthy collector of luxury goods recognized it. It led to the increased demand on bulb prices. Tulip mania hyped overnight. They bought and sold contacts, but no actual delivery.
Then the bubble burst happened when the seller arranged a big purchase without showing the product. Tulip Mania has caused panic throughout Europe. The price of tulip bulbs later dropped extremely. The second event is Dot-Com Bubble. The Dot-com bubble case in the 1990s is quite famous till today. It happened due to the rise in equity markets due to the internet and technology-based companies.
The Internet was the new frenzy that time, investors poured money because they believed that it was highly profitable and potential. However, bubble at this time was from the cheap money and easy capital. Many start ups had a difficult time in generating profit and creating products. Panic appeared leading to 10% loss in the stock market. Then the third is the U.S. Housing Bubble. Actually it was the result of the Dot-com bubble. When the market crashed the value of real estates rose.
