Investment share option future trade ETF commodities stock online market Chart Realtime: Stock market bubble – The Great Depression

A Stock market bubble is a concept in economics, first made famous with the collapse of the Mississippi Scheme and South Sea Bubble in France and England, respectively. As far as the more recent past, the Stock bubble of the 1920’s before the Great Depression, and the bubble of the 1990’s that came with the internet explosion, are the more famous examples. These bubbles occur when a stock rises above its actual value, which is determined by relationships to other stocks.

There is a theory in economics called Positive Feedback, which posits that any increasing price will make more investors want to invest, but not all of them. This, in turn, provides a positive feedback, driving prices up even more.