Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

In November 1999, right before the dot-com bubble burst, Francis and Harold Mountain were all

over the newspapers. Four months after their divorce, the couple

had shown themselves entirely unable to agree on how to split up their Beanie Baby

collection. The Las Vegas judge ordered them to bring the entire collection into the courtroom,

spread them out on the floor and go back and forth choosing Beanie Babies

until the collection was split.

Francis told the press, I don't agree with the judge's decision, it's ridiculous and embarrassing.

Nonetheless, she did crawl around the floor picking out Beanie Babies, her first choice being

mapled a bear.

At the time, the pile of stuffed

animals was worth a few thousand dollars, but prices were already in free fall. The Beanie

Baby's bubble is a particularly entertaining one and it highlights all of the hallmarks

of a mania, mass delusion, speculation, out-of-control expectations, the herd mentality.

Right now, it might appear that we're in another collectibles boom.

In February this year, a Michael Jordan basketball card sold for $738,000 at auction.

The exact same card had traded for more than half a million dollars

less just a few weeks earlier.

A Cloned Centaur guitar effects pedal is being sold for half a million dollars.

At Monterey Car Week, a McLaren F1 just sold for over $20 million, and a pair of Kanye West's trainers

that he wore to the 2008 Grammys became history's most expensive sneakers after selling

for $1.8 million, which for all I know might be a good price, I'm not really in the market

...