Here is one view on graphite: “This commodity like lithium and rare earths captured the imagination of investors who were besotted by the technical possibilities of the product without really thinking through the business model for making money.” So says Peter Strachan of Perth-based StockAnalysis in his latest client note out this week.

Sure, we were all caught up in it − and that mighty derivative of graphite, graphene. But the share graphs show the story: since July, the air has gone out of that story, no doubt leaving many investors feeling the worse for wear. Some stocks have since shed 70% or more of their July valuations.

Of course, the general market erosion has played no small part in these declines (as it did post-2011 with the rare earth stocks) but there seems to be growing opinion that the graphite enthusiasm was well overdone considering the size of the market and the considerable number of wannabes trying to get a share of the relatively small pie.

Warwick Grigor of Far East Capital calls graphite a bubble and describes just how it happened (and how these bubbles always seems to happen): “Some spark creates a run in share prices, brokers pump out placements – because they can. Smart punters recognise it for what it is and take profits, while true believers confuse market plays with the real world and take too long to decide it was a bad investment. Eventually they sell in disgust and drive prices back to where they started from”

How true. And we never seem to end up with much to show for it. Three years after the rare earth bubble burst, we have only one producer (Lynas Corp) and that company is not looking too flash in terms of a share price. Of the uranium bubble of 2007, Grigor rightly reminds us that we ended up with just one producer, Paladin Energy (which has also had it share of problems). So far, we have one graphite producer (Valance Industries) but that involved reviving a former producing mine rather than starting a new one.

But it is also fair enough to point out that those of us on the sidelines seem always to get excited about these bubbles in their early stages: this writer did his part in reporting on the uranium, rare earth and graphite surges and probably was guilty of not being as skeptical as he should have (although one did begin to ring the alarm bell once the number of ASX-listed companies claiming to have uranium projects moved into the three figures.)

And as a commentator you can hardly ignore prices hitting the roof − uranium to $US136 a pound (spot now at $37/lb) and dysprosium going to more than $2000/kg (against $475/kg now).

But we never learn. In 1951 there was great interest all of a sudden in rare earths which, with the advent of the jet and atomic ages, suddenly had new uses (as in tough but light alloys for jet engines). The US miner of rare earths back then, Molybdenum Corp, saw its shares rise 656% in just over a year. Then in 2011 it happened again: Molycorp (as the same company is now called) saw its shares in May 2011 at $77.54. Now they’re worth 79c.

April 1954 saw what Time magazine called “a feverish new boom in penny uranium stocks”. Before the Korean War, the US had imported 90% of the uranium it needed (not much was needed though until the 1950s). But by 1954 it was looking as if the Americans were going to become the world’s leading uranium producer. In 1948 there were 15 small mines employing a total of 50 people; by the mid-50s, 800 mines were in business with a total payroll of over 4000 people.

Time recounts the story of one of the first junior uranium stocks, Uranium Oil and Trading Co. The promoter had 3 million shares to sell at US1c each. The magazine said the brokerage firms in Salt Lake City refused to touch them so the promoter, one Jay Walters, set up shop at a coffee counter; for every $20 worth of shares bought, there was a free cup of coffee. It seems to have worked: the 1c stock, when it began trading over-the-counter (not over the coffee counter), went to 8c. That accomplished, Walters went on to form another outfit, Aladdin Uranium; its 1c shares hit 5c as part of the uranium frenzy of the time.

Those who actually explored for uranium (or, as in 2007, said they would) did well, too (for a while). One coal company that switched tracks to yellowcake hunting saw its shares go from 2.5c to 55c in three months.

We never learn.