Five Centuries of Bubbles and Bursts

by CNN Money

www.cnnmoney.com

1634-38: Tulips

The earliest well-documented financial bubble was for a bell-shaped flower. Some Dutch families mortgaged their life savings for these bulbs, some of which could cost as much as a home.

1720: South Sea Co.

It was called a sure thing by British bankers who successfully hawked South Sea's shares as a play on New World trade. But profits never materialized, investors bailed, and South Seas' officials went to jail.

1848: Gold Rush I

After the discovery of gold in northern California, a nationwide frenzy erupted. The mass migration of speculators drove California's population up from 15,000 to more than 300,000 by 1854.

1860-73: Railroads

Railroad construction zoomed after the Civil War. Railroad stocks would make up as much as 40% of the total market capitalization of the NYSE. A financial panic in 1873 led to dozens of lines going bankrupt.

1890s: Bicycles

At one point more than 300 firms raced to corner the bike market. Then came the car, and by 1905 only 12 U.S. manufacturers remained.

1920s: Radios

The advent of radio technology fostered a dotcom-style boom in the roaring '20s. The biggest example: Radio Corp. of America. RCA's shares soared from $1 to $573 between 1921 and 1929. The stock then fell more than 95%.

1959: Electronics

At the dawn of the Space Age, stocks with "tron" in their name - like Astron and Transitron - zoomed to the moon. But in 1962, they came crashing back down to earth.

1974-80: Gold Rush II

As inflation soared - and as U.S. households were allowed to invest in gold for the first time since the Great Depression - prices skyrocketed from around $100 an ounce in 1974 to $850 by 1980. They would then collapse for the next quarter-century.

1980-84: PCs

Even before the rise of Windows or the Mac, personal-computer companies were the stars of the day. But PC stocks fell more than 50% in 1984, making investors gun-shy on tech for more than a decade.

1985-90: Japanese asset bubble

The land of the Rising Sun suffered twin bubbles - in real estate and equities. Between 1985 and 1989, Japanese stocks quadrupled in value. But they crashed in 1990, and prices haven't fully recovered.

1997-2000: Internet stocks

Not since the Depression was there so much speculation on Wall Street - this time in promising but in many cases profitless companies with ".com" in their names. After the party came crashing to an end in 2000, tech stocks lost four-fifths of their value

2003-07: Real estate

A conservative investment (the home) became the object of rampant speculation. The collapse of the housing bubble took the stock market down with it.

2008-present: Gold Rush III

Investors turned to gold when they thought the global economy was in trouble. But even as it became clear the world wasn't going to end, gold kept rising - and now trades above $1,100 an ounce.