Dot.coms washout

The washout of dot.coms was inevitable. Virtual companies with no earnings burning through startup capital and selling for $100 to $200 a share was patently absurd. Some told me this was the new economy and that the old rules of making a profit didn't apply.

What we were actually seeing was a bubble inflated by day traders wanting to get in on the ground floor of the next Microsoft (don't get me started again on Microsoft). The bubble had to burst as venture capitalists had to tire of handing over millions of dollars only to get a request from the dot.com startups for more millions 6 months later. Of course, if I was so sure this was going to happen, why didn't I short all these over hyped stocks you might be tempted to ask. At $200 a pop, it's kind of a steep play while waiting for the markets to start to face reality.

So as pets.com, etoys.com and even amazon.com come back to reality, some sanity is beginning to return to the markets. A NASDAQ that peaked above 5000 has now settled in at just above 3000 and sanity again prevails on Wall Street.

11/17/00
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