Financial story（two）

Electronic enthusiasm

In the early 1960s, with the advent of technology and the electronic age, Wall Street embraced the digital frenzy. Almost every stock listed at the time had an electronic name attached to it, regardless of whether the company's business was related to the electronics industry. People also don't care what kind of products companies make, as long as they sound "electronic" they will be snapped up and hyped.

The Music Association of America, which sold phonographs and records to door-to-door buyers, changed its name to Electronic Melody in order to go public. Its shares were priced at $2 a share, rising to $14 a week later.

A small company that made shoelaces for 40 years changed its name from Shoelaces to Electronic Silicon Chip Kinetic Catalysis, but the company still made shoelaces, and its stock price skyrocketed.

While the public can't resist the temptation to get rich quick, even pastry companies like Mama's Dessert are jumping in to rename themselves in the hope that they will strike it rich.

Electronic fever came to an end in 1962. The buying frenzy turned into a selling frenzy, share prices plummeted, and many of the super-rich were reduced to beggars.

The Legend of Junzi Orchid

History has always been strikingly similar.

The story of tulip bulbs was repeated in China in the 1980s.

Since China's reform and opening up, a variety of products have sprung up in the market to enrich people's lives, including family flowers, clivia is the most attractive one. Originally from Africa, the plant was introduced to China and became a symbol of high status, nobility and taste in rich families.

In the 1980s, the northern city of Changchun adopted clivia as its city flower, and more than half of the city's families began to grow it. Since clivia takes several years to grow, supply can't keep up, so demand goes up in vain and prices start to rise. The news spread like wildfire to other cities across the country. Many individual speculators began to raise money and snatched up the clivia in the market. Soon, the price of clivia rose to dizzying heights. At first, clivia usually sold for 100 yuan per plant, then the price increased 2,000 times to 200,000 yuan per plant.

This speculative fever is bound to have the same fate. Clivia is still clivia, only its price has fallen more than 99%, wiping out millions of speculators.

The Japanese bubble burst

The biggest speculative frenzy of the late 20th century was that of Japan.

In the decades after the second World War, Japanese people worked hard to achieve economic take-off and national wealth. In the mid-1980s, many Japanese people found that they could make money quickly by trading stocks and real estate. From 1955 to 1990, Japanese real estate prices rose more than 75 times and stock prices 100 times.

There was a wave of speculative enthusiasm, with little belief that Japan's limited land prices would fall, or that share prices would fall. Trading stocks became a necessity in Japanese public life. Nomura, Japan's biggest brokerage, is worth more than all of America's securities firms combined. Japan's golf courses are worth $500bn, twice as much as all the companies listed on the Australian Stock Exchange put together. Based on property prices, Japan could sell just The city of Tokyo and make enough money to buy up all of America. The sale of the palace would raise enough money to buy all of California.

Finally, realizing the dangers of the "bubble economy," the government slammed on the brakes, adjusting interest rates and tightening credit in hopes of reining in property prices and bringing the stock market to a soft landing.

But the situation is out of control. Instead of a soft landing, Japan's stock market crashed. From near 40,000 at the end of 1989, the Nikkei fell to near 14,300 in August 1992 and never recovered -- it closed at 9,215 on November 29, 2002. Meanwhile, property prices have fallen by 70 per cent.

Dotcom boom

History does not simply repeat itself, but often has striking similarities.

In the late 1990s, the Internet boom hit the world. Under the slogan "High-tech, new technology", everyone believes that "this time really is different!" Internet companies such as Amazon and Yahoo have seen their share prices increase tenfold in a year, with no one calculating p/es or caring whether the companies will turn a profit. As with the electronics mania of the 1960s, the name change and the addition of.com immediately attracted large sums of money from venture capitalists and a rush for shares from the public.

Us a small company called "audio and video network", the business is spread on the Internet all kinds of radio and television programs, continuing losses was established since the mid - 90's, during the dotcom boom the name to "broadcast. Com", shares worth one hundred times, immediately rose from $18 to $74 per share, and then further to $300 a share.

The Chinese stock market on the other side of the ocean also follows the trend of the world, hundreds of companies have announced the network, renamed, put on the cloak of high-tech, busy hanging sheep selling dog meat, staged absurd tragicomedy.

In order to prove once again that the financial market has the law of gravity, the U.S. Nasdaq stock index, which represents the world's high-tech market, dropped from 5,048 points in March 2000 to more than 1,000 points in October this year, a decline of 78.4 percent in 30 months.

The hopes and passions of countless investments, speculators, greed and dreams have turned into bitter memories and nothing.

Why do people always forget things? Why don't people learn the hard lessons of the past? Between tulips and the Internet, is it the wind? Is the discussion? Or is it the human heart of greed and fear?

Economic historians say the human "financial memory" is short. You can be sure that the history of human bubbles will continue to be written.

"The history of the world economy is a drama based on illusions and lies," Soros said. The way to make wealth is to recognize the illusion, invest in it, and then get out of the game before the illusion is recognized by the public!"