The Nature of Asset Bubbles and How to Avoid Them
Class #2: The Nature of Asset Bubbles and How to Avoid Them (1.0 CE)
The second class in the Quarterly Financial History course explains the commonly observed phases of asset bubbles using several historical examples. The class begins by recounting the Mississippi Bubble, which formed in France from 1717-1720, and ends with an analysis of cryptocurrencies in the 2020s.
The class also explains the differences between two distinct types of bubbles. Type 1 bubbles involve speculation in specific types of assets, such as tech stocks. Type 2 bubbles can be thought of as “credit bubbles” in the sense that they involve large-scale participation of financial institutions and institutional lenders. The Global Financial Crisis (GFC) was a classic Type 2 bubble, while the cryptocurrency mania has many elements of a Type 1 bubble. These are explored in greater detail in the session.
The class concludes with a discussion of the common red flags that appear during the inflation phase of an asset bubble.
Key Learning Objectives
- How to Differentiate between Type 1 and Type 2 asset bubbles
- Understanding the six phases of asset bubbles
- Identifying common red flags that signal the onset of an asset bubble
This webinar is expected to be eligible for one hour of CE/CPE credit.
Mark J. Higgins, CFA, CFP®
Mark is a former institutional investment consultant and financial historian. His classes draw from his upcoming book, Becoming An Enlightened Investor. Prior to founding The Enlightened Investor, LLC, Mark served as a senior investment consultant for more than 12 years. In this role, he advised the trustees of large pension plans, foundations, endowments, and insurance reserves with aggregate assets of more than $60 billion. He discovered that understanding financial history proved much more valuable than tracking the latest economic data. He also discovered that there was no single book that recounted the full financial history of the United States. Becoming an Enlightened Investor seeks to fill this void. The insights are intended to help investors contextualize current events and thereby improve their investment decisions. The book will be published and distributed by the Greenleaf Book Group and will be available for purchase online and in bookstores in the Fall of 2023
More than 50 hours of CFP® CE credit and more than 100 hours of Investments & Wealth Institute® credit on replays available 24/7 to paying members ($120 annually) of Advisors4Advisors.com. CPAs are eligible to receive CPE for attending live webinars only. To learn how to receive continuing professional education credit viewing webinar replays, please see our detailed instructions.
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Thank you for a very engaging presentation today. The program followed up nicely with the prior webinars that Mark has done, and all of the evidence presented is very persuasive in proving Mark's point(s) about asset bubbles throughout history. Anyone who is a market buff or wishes to learn more about market history and how it relates to today's market will benefit from watching this program as well as Mark's prior presentations on the topic of bubbles.
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This webinar was excellent. As someone who lived through the dot-com bubble, it as extremely enlightening to think back about what was happening and how the ultimate impact. It will make me more aware going forward to be cognizant of things that can cause another one.
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Excellent! great to see how history repeats
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