The Dutch Tulip Crisis is one of the most well known economic & historical events and is taught at countless business schools across the world. Known as Tulip Mania, the Dutch Tulip Crisis is a story of a wildly speculative bubble that offers a plethora of valuable lessons to be learned through the ages.
In 17th century Netherlands a virus infected the local tulip crops which caused the flowers to produce colorful patterns when in full bloom, as opposed to the solid colors tulips are typically known for. This caused the price of tulip bulbs to skyrocket, causing tulip bulbs to be used as currency. Following this stark upward trend, a sudden collapse ensued, creating what is regarded as the first speculative bubble in history.
Here are seven valuable lessons we can learn from Tulip mania.
The Dutch Tulip Crisis continues to be taught across universities for a reason — its lessons are timeless. All forms of investing include a measure of risk, and tulip bulbs were no exception.
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