Financial manias, or market bubbles, have been a regular part of economic history. From the Dutch Tulip craze in the 1600s to more recent events like the dot-com bubble and the 2008 financial crisis, these patterns keep repeating. Despite past lessons, people still fall for these moments of market madness.
By studying these past bubbles, we can spot common patterns. This helps us understand why they’re hard to stop and how we can better protect ourselves from their worst effects.
I recently briefly explained to a friend how these manias work and how people typically behave during them. You can read that here.
However, exclusive to Mastermind members, I have created this three-part detailed series to dive deeper into how financial manias operate, why they keep happening, and share some ideas on how to deal with them. Understanding the mental, social, and economic factors behind these events can help us resist their appeal and make smarter investment choices.
Let’s begin the series with this first part on how a financial mania typically unfolds, and the most important lessons you can draw from it.
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