True Reviewer

The financial crisis dejour – throughout time, market segments have experienced a crowd mentality.  The more popular a market gets, the more people want to jump in, and the higher the prices are driven.

This social experience has occured throughout history and the cycles can be analyzed consistently.  Professor Watson teaches serial entrepreneurs and the role of the market economy. Regardless of whether we want to analyze recent real estate markets which have Pop, these fluctuations are not unique.  They have routinely occurred throughout history.

One of the most reported upon historical markets that burst was Amsterdam’s Tuplip sector.  We can analyzie the Tulipmania of the tulip market that burst in 1637 as a popularly known historical account of a industry that overheated.

Tulips were originally introduced from Turkey in the early 16th century.  As new “varieties” of tulips were sold, competition intensified and their value soared.  One legitimately rare variety was the Semper Augustus which reached prices in excess of 1,000 florins per single bulb in 1623.  This price was more than six times the average annual income.

This industry mania continued – and 10 years later the price had risen another ten times.  At the market height, the price of a single Semper Augustus tulip bulb reached 10,000 florins – the value of what it cost to purchase a house in the middle of Amsterdam at the time.

With time the market peaked and there was no-one remaining who still wanted to buy these bulbs at such high prices.  Within months, the market price crashed and many of people were left in financial ruin.

Throughout history – we have witnessed similar bubbles develop.  As the crowd mentality continues to get more excited, those contrary views become less and less popular to be heard.  Are any of the recent market bubbles any different?  In modern times of politically correct speech, are the contrarian voices that speak up for character, ethics, and integrity any different?  Throughout time, these contrarian voices have been demeaned and ignored.  But the market for products and the market for ideas has a way of eventually correcting itself from the heat of the crowd mentality – and those politically correct views tend to have their bubbles burst as the required correction occurs. Today’s market is no different.