Sep. 29--Tulip mania, the Nifty Fifty, dot-com stocks, even Beanie Babies.

Recent problems in the financial markets are just the latest in a series of speculative bubbles that have created chaos in the civilized world since a single tulip bulb allegedly traded for as much as 12 acres of land in 17th-century Holland.

In the early 1970s, for example, investors paid stratospheric prices for "safe" growth stocks like Avon, McDonald's and Xerox, only to see them plummet and take as much as a decade to recover.

The bubbles this time occurred in the housing, commodity and credit markets, said Christopher J. Grant.

The U.S. government is working amid controversy to staunch the bloodletting, and stocks are swelling or swooning on every bit of news.

"The world is meaningfully different than it was two weeks ago," Grant, managing partner and portfolio manager at Grant, Koehler & Levin Ltd. in Mequon, said last week.

Essentially, the bubbles occurred because those markets got overextended.

For example, investment bankers were using heavy amounts of debt provided by speculative investors to finance their deals. When the hot money disappeared, the party ended, Grant said.

"From a financial standpoint, a major part of the investment banking industry got wiped out in just about one week," Grant said.

The result of the recent bubbles is that New York, decimated by the fallout, will look more like Switzerland, with its handful of giant banks, he said. Also, we'll see increased regulation and, because risk is more expensive, interest rates for borrowers will stay higher, he said.

Recent events have underlined the importance of always having cash on hand.

Investors with no cash might want to sell some stocks to buy higher-quality names, Grant said.

Bargains abound in big-company stocks, particularly in the technology area, he said.

Some of the technology stocks Grant owns in many portfolios include Cisco Systems Inc. (CSCO, $23.82), EMC Corp. (EMC, $12.72), International Business Machines Corp. (IBM, $119.42), Intel Corp. (INTC, $19.20), Microsoft Corp. (MSFT, $27.40) and Oracle Corp. (ORCL, $20.62).

"They're all dominant players in their respective niches in enormously profitable industries, and their valuations are extremely attractive," Grant said.

He's always been a big buyer of financial stocks but says he wouldn't buy most of them in the current environment.

Two exceptions are Bank of America Corp. (BAC, $36.70) and JP Morgan Chase & Co. (JPM, $48.24).