Brunswick

Brunswick was a bowling-equipment manufacturer that became a Wall Street favorite during the sport’s postwar boom. Its rising stock price helped draw billions of dollars into bowling, but the ensuing overinvestment and collapse made the company part of the book’s example of how collective decisions in financial markets can go badly wrong.

Place in the Bowling Boom

Between 1957 and 1958, Brunswick’s shares doubled alongside those of AMF, another bowling-equipment manufacturer. Investors also poured money into smaller bowling companies, and businesses with bowling-related ideas found it easy to attract capital. As alleys spread across the country, the boom appeared to offer room for the whole industry to grow.

Wall Street amplified that expectation with forecasts that bowling’s popularity would continue to increase at its recent pace. The book describes the resulting enthusiasm as a frenzy for anything bowling-related: rising prices and optimistic projections reinforced one another, making investment seem justified by growth that had not yet materialized.

Bubble and Overinvestment

By 1960, the United States had 12,000 bowling alleys and 110,000 lanes. Investors had put $2 billion into the bowling business, a substantial sum at the time. The boom thus extended beyond Brunswick’s share price: market enthusiasm directed real capital toward expanding the industry.

The expansion proved excessive. Bowling companies raised more money than they could use wisely and overbuilt in anticipation of a future in which the sport would keep gaining popularity. By 1963, bowling stocks had fallen 80 percent from their highs, and they would take nearly a decade to recover their lost ground. Bowling itself never again reached the popularity it had enjoyed during the Eisenhower years; the country later had about half as many alleys as it had forty years earlier, despite having roughly 100 million more people.

Significance

Brunswick’s episode illustrates the gap between a stock price and the value of the businesses it represents. The market’s enthusiasm for bowling did not simply misjudge investors’ prospects: it helped direct excessive capital into companies and facilities built for demand that failed to appear. In this account, the bowling bubble is a small-scale example of collective decision-making losing the independence and sound judgment that can make a group useful. It also shows how a financial-market mistake can reach beyond investors, shaping investment and capacity in the wider economy.