The financial crisis dejour - historically, real estate markets have followed a crowd mentality.  The more heated a market becomes, the more individuals want to invest, and the higher the prices are pushed up.

This bubble has occured throughout history and the cycles can be analyzed consistently.  Professor Watson teaches entrepreneurs and the role of the market economy. Regardless of whether we want to think about recent credit markets which have Pop, these events are not unique.  They have routinely occurred throughout time.

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

Tulips were originally imported from Turkey in the early 16th century.  As new “varieties” of tulips were marketed, 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 exceeded more than six times the average annual wage.

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

Eventually the market peaked and there was no-one remaining who still wanted to purchase these tulips at such high prices.  Within months, the market price crashed and many of people were left in economic ruin.

Throughout time - we have observed similar bubbles develop.  As the crowd continues to get more hyped, those contrary views become less and less popular to be heard.  Are any of the recent market bubbles any different?  In modern environment of PC speech, are the contrarian voices that stand up for character, ethics, and integrity any different?  Throughout history, these contrarian voices have been denigrated and ignored.  But the market for products and the market for principles has a way of always 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.