Today's chart is a blast from the past — with the extreme rise and fall in the price of tulip bulbs in 17th century Netherlands.
Why it matters
Tulipmania is one of the most famous asset bubbles in history. At the height of the mania, some tulip bulbs were worth more than 100 times their weight in gold.
Pretty crazy. But also quite normal … And yet another example of the human tendency to create ridiculous asset price bubbles.
Tulip bulbs. Beenie Babies. Dogshit mortgages in 2008 … People have insataible appetites for investing in nonsense. And tulipmania also a cautionary tale on the dangers of asset price bubbles.
What's next?
NFTs? Meme Stocks? AI hype? I'm not here to give you financial advice. But human nature changes slower than technology, so expect the cycle of asset bubbles and busts to persist.
