More recently, we had the dotcom bubble of the late 1990s. This was when investors put a great deal of money into internet-based companies, which led to a rapid rise in US technology stock prices. In the five years between 1995-2000, the Nasdaq index rose from under 1000 to more than 5000. And then a year or so later, POP – the bubble burst. Many so-called dotcoms went out of business as the Nasdaq dropped by 77% and billions of dollars were wiped out.
One of the remarkable things about the dotcom boom was that there was so much confidence in the market and “irrational exuberance,” as one analyst puts it, that companies which had not yet made any profit, not even any revenue in many cases, or even a finished product in some instances, where still much in demand on the shares market.
Currently all eyes are on crypto-currencies and their future, with all the hype surrounding them and the many dramatic price shifts they face (view our article on crypto).
“There’s only one sure way [to spot an economic bubble],” suggests global chief economist, Joseph Davis, of the advisory group Vanguard, “and that’s after the bubble has burst.”
The NYSE and NASDAQ: How They Work (investopedia.com)
The truth about Tulip Mania - BBC News
Economics of Speculative Bubbles | tutor2u
From Tulips To Bitcoin: Why Investment Markets Are Forever Blowing Bubbles – Forbes Advisor UK
Asset Bubbles Through History: The 5 Biggest (investopedia.com)