In a book I just read called Doomed to Repeat by Bill Fawcett, I found a very good definition of a bubble. He refers to Tulipmania that occurred in Holland in the late 1600's. (See Wikipedia for further information.) However, the recent bubbles we had of the dot com bubble and US housing bubbles were no different.
"Tulipmania and its collapse set eh pattern for every speculative bubble to come. Once people see only the money they can make by investing in something and pay no attention to the real value of the item or stock, the bubble begins to inflate. Those who sell early make money, others follow making more, and seeing the easy and quick profits, more buyers push the price up unrealistically. When the bubble gets too big, everyone, not just the investors, pays for their foolishness."
On my other blog I am today writing about ONEX Corp (TSX-OCX, OTC-ONEXF)... continue...
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