<prompt> Human: IntroductionAll,First, Im posting this from a throwaway account because I want what I write to be judged on the quality of my analysis.Second, Ive thought for quite sometime now that it would be interesting to put together a series of posts analyzing lessons that can be learned from historical bubbles in history. This post represents day 1 of this series.Schedule of PostsHere is my plan for this series:Day Topic------1 Tulip Mania2 South Sea Company3 Silver Bust and Uranium Folly4 Is Bitcoin Next?5 Concluding ThoughtsIs This a Personal Finance Topic?When writing this series of posts, I tried to determine whether they belonged in rpersonalfinance, rinvesting, or somewhere else. Ultimately, my key take away from these posts is to remind you of the importance of investing in a diversified portfolio of assets and the dangers of engaging in speculation. This message seems to me to be at the heart of this subs beliefs on investing and thus ultimately I believe that it is a personal finance topic.What Is A Bubble?To adapt a phrase from Justice Stewart, I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description bubble, and perhaps I could never succeed in intelligibly doing so. But I know it when I see it.Ultimately, it is very difficult to identify a bubble and making even relatively basic strides earned Dr. Robert Shiller a nobel prizeHowever, at the risk of oversimplifying, I believe bubbles have a few key characteristics: They experience a dramatic, often very quick, rise in price. They often involve some degree of opactiy andor market manipulation. They are accompanied by wide-spread speculative investment, often fueled by excess capital andor debt. The market price of the underlying asset differs greatly from the assets fundamental value.Tulip ManiaTulip Mania is perhaps the first widely recorded and analyzed bubble. In the early 1600s, Tulips rapidly gained popularity in the Netherlands as a status symbol due to the vibrant colors of Tulips, especially as compared to many of other available flowers at the time.At the peak of the bubble, a single Tulip sold for approximately 10 times the annual income of an average worker roughly 580,000 in 2017 dollars.Additionally, the first derivative contracts were created as part of this bubble - individuals traded the right to buy future tulips.The bubble collapsed when interest in Tulips diminished - ships found nobody willing to pay market price for their valuable cargo. Speculators found nobody willing to buy their futures contracts for a greater price. And, as with all bubbles, many of those left holding the bag were financially ruined.Bubble Checklist - Tulip Mania They experience a dramatic, often very quick, rise in price.Yes - the value increased by 20x-100x the original price exact multiple depends on which source you examine over a few months. They often involve some degree of opacity or market manipulation.Unclear - there appear to be no specific instances of market manipulation, but certainly the futures market was unregulated and subject to manipulationrumors. Additionally, by modern standards the market was certainly opaque and rife with insider trading. They are accompanied by wide-spread speculative investment, often fueled by excess capital andor debt.Absolutely - futures contracts required minimalno upfront payment and allowed speculation based on future prices with essentially no current outlay of cash. The market price of the underlying asset differs greatly from the assets fundamental value.Yes - just as quickly as prices rose, they also declined drop rate of 99.999 upon market collapse. The idea that a decorative flower could be worth a decade of wages clearly indicates a divergence between the stated market price during the bubble and the intrinsic value of the asset.Visual Aid - Standardized Tulip PricesGraph of Tulip ManiaData Source - note that since I plan to show multiple bubbles, I re-standardized the data provided to be in multiples of the original price i.e. a value of 100 represents a price 100x higher than the originally observed price. Further, while Appendix 1 helps provide pricing data, not all values are completely clear and in such cases I used my best judgement.  <response>: Just skip to Day 4. That seems to be the point of all this. 