Investment Trusts were first introduced in the U.S. around 1926, in the form of trading corporations, with the sole purpose of investing pooled capital into stocks. And like many new investment vehicles, it didn’t take long for them to become wildly popular with investors.

By 1929, roughly 640 trusts existed with about $4 billion in assets. In ’29 alone, trusts accounted for one-third of the $6 billion in new offerings — about $1 billion of that was estimated just in August and September alone.

Yet, those numbers don’t really describe what was going on. One of the worst examples of investment trust excess was highlighted by John Kenneth Galbraith who cited the wild speculation of Investment trusts as a contributing factor to the Crash of 1929.

Goldman Sachs launched the Goldman Sachs Trading Corporation in 1928, with the funds from the offering going toward speculation in stocks. Goldman Sachs kept controlling interest, selling the rest of the shares to the public. Then the Goldman Sachs Trading Corporation repeated the process with the launch of the Shenandoah Corporation. The Shenandoah Corporation tried it again with the creation of the Blue Ridge Corporation (the scheme gave investors the option to buy Blue Ridge shares via cash or trade blue-chip stocks — at inflated prices — for Blue Ridge shares).

Each new trust helped push stock prices higher. And as the speculation rose, the shares of the child, inflated the shares of the parent…and the bubble ensued.

Is it that different than SPACS today? The special acquisition vehicles, also referred to as blank check companies are the rage today. It’s easy to spot a bubble in investing for me. At 69, I’ve been around long enough to see my shares of bubbles. In fact, I’ve been at the heart of the most notorious one in one hundred years, the Internet bubble. I founded one of the first Internet companies and brought it public in 1997.  Bubbles are great.  You tell me where the next one will be, and I’m all in. The problem of course is all bubbles end the same. It’s hard to get off the train when everyone is making so much money but inevitably the train crashes. If you don’t get off before the crash, well you know the rest.

I can guarantee you there is a giant bubble around renewable and self-driving autonomy now. There are probably others. SPACS are an investment vehicle ripe for bubble investing. Blank check companies that investors know little about what they are investing in or their prospects.  They are perfect for pie in the sky valuation.  If you want to know the FACTS about SPACS, read this great piece by legendary investor, Jeremy Grantham.