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The crisis dejour - historically, market segments have followed a crowd mentality. The more heated a market becomes, the more individuals want to jump in, and the higher the prices are pushed up.

This bubble has occured throughout history and the cycles can be studied consistently. Professor Greg Watson teaches business strategy and the role in the market economy. Regardless of whether we want to think about recent credit markets which have Broke, these scenarios are not original. They have routinely occurred throughout time.

One of the most popular historical markets that popped was Amsterdam’s Tuplip market. We can study 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 prices soared. One honestly rare variety was the Semper Augustus which reached values in excess of 1,000 florins per single bulb in 1623. That price was more than six times the average annual income.

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

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

Throughout time - 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 today’s environment of PC speech, are the contrarian voices that stand up for character, ethics, and integrity any different? Throughout time, these contrarian voices have been denigrated and ignored. But the market for products and the market for ideas has a way of always correcting itself from the heat of the crowd mentality - and those extremist views tend to have their bubbles burst as the required correction occurs. Today’s market is no different.

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