Late ’90s: Beanie Babies
Instead, Warner took a job at a toy maker. While there, he got an idea for his own company, Ty, which would eventually make him a billionaire. His concept was to sell plush toys, called Beanie Babies, as collectibles in the early 1990s. They quickly became hot items as millions of people bid up the prices.
As for Ty, he was smart to diviersify his wealth into investments like hotels and golf courses. But collectors were not so lucky, as the prices of Beanie Babies eventually collapsed. Warner’s career hasn’t gone entirely unmarred, however. He was recently in the news after pleading guilty to tax evasion.
The lesson: Beware bubbles.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.