📅 Day 62 — The Archeology of Bubbles

If you walk through the ruins of Pompeii, you don’t just see stones — you see stories: a loaf of bread frozen mid-bake, graffiti scratched into walls, a dog’s pawprint in wet cement. Archaeology is the study of layers, each telling you how people once lived, hoped, and fell.

Markets leave ruins too. We call them bubbles. Dot-com stocks, tulip bulbs, housing in 2008, NFTs in 2021. Each bubble looks insane in hindsight — but in the moment, it feels like fresh paint, vibrant and inevitable. The task isn’t to laugh at past bubbles. It’s to excavate them for clues about our own.

Digging Into the Layers

Every bubble leaves behind three main layers:

1. The Foundation (Narrative Gravity 🌌)
   Bubbles don’t start with numbers. They start with stories. “The internet will change everything.” “Housing never goes down.” “This JPEG is worth $3 million.” These narratives bend rationality like gravity bends light. (source)
2. The Pottery Shards (Echo Trades 🔊)
   Once the story spreads, traders start copying one another. At first, it’s discovery. Then it’s mimicry. Soon it’s just echoes bouncing off canyon walls. By the time you recognize the sound as hollow, it’s too late.
3. The Ash Layer (The Crash)
   When bubbles burst, they calcify into lore. Everyone swears they’ll “never fall for it again” — until the next shiny story seduces them.

Excavation as a Discipline

The trick is to study bubbles like ruins, not like weather. Weather passes. Ruins teach. Instead of asking, “How could they be so dumb?” ask, “What signals did they miss?”

For example:

• The dot-com bubble showed us how easy it is to overprice growth with no path to profit.
• The 2008 housing bubble showed us the danger of Shadow Portfolios 🕶️ — risks nobody realized they held until the quake hit.
• The crypto winter (or as I prefer, the cold shower) taught us conviction can survive, but liquidity mirages cannot.

Building a Modern Archaeology

What would it look like if we trained investors as archaeologists? Imagine courses where analysts dig through past data like artifacts, not for trivia, but for structural lessons. The way a shard of Roman pottery tells you about trade routes, a chart from 1999 tells you about liquidity, leverage, and mass psychology.

Because here’s the hard truth: bubbles will happen again. They’re not bugs; they’re features of human imagination colliding with money. The goal isn’t to avoid them forever. It’s to know when you’re standing in fresh wet cement — and decide if you want to leave your footprint.