Appropriately enough, on a day when absolutely everything crumbles, the WSJ gives us throw-back to Nasdaq boom.
It's a sad day for financial markets... and 25 years ago so was the beginning of the end of the Nasdaq "bubble" too (#785459, #819170).
What's so wild at looking back at some of the stocks back then is that among those that didn't die (quite a lot of them!), the survivors took some 15-20 years to recover. For years and years, investors had to a) eat the loss, or b) sit on it, hoping it would work out. That's insane; and gives some pause to the current BTC madness.
Today, some investors are worried the same cycle might be playing out when it comes to artificial intelligence. Even if that is the case—a big if—there is an important lesson for investors from the dot-com collapse: Ultimately, the early internet hype proved correct.
Cute that the author says "AI boom." What about the rest of the market?!
Leading AI companies are valued in the tens or hundreds of billions of dollars, some of them with little prospect of generating meaningful sales. And investors are racing to give the companies still more money at ever-higher prices to build even bigger clusters of AI chips to fill out new, cavernous data centers.
...aaaaand of course there's a "tulip" mention. (I guess I should count my blessings that BTC isn't listed...)
In other words, the dot-com bubble had elements of what some investors call “good bubbles” that fuel rapid adoption of revolutionary technology. That is opposed to “bad bubbles” in which people speculate on assets that don’t make the economy more productive—things like tulip bulbs, Beanie Babies or houses in the Arizona desert.
This paragraph is at least a little insightful: over long enough a time frame, what markets captured in ~2000-2001 were the revolutionary impact of internet on humanity. And that was, in large parts, correct:
While people race to cash in, ideas are tried and infrastructure is built. Many fail who nevertheless lay important groundwork. The fiber-optic lines of 2000 were the equivalent of the electrical grids of the early 1900s, the railroad tracks of the 1800s, the canals of the late 1700s, says Perez. Busts followed those booms, yet the networks fertilized new markets.
non-paywalled:
https://archive.md/lnH2E