Slashdot Mirror
Another Dot-com Boom?
Ryan Hemelaar writes "CNN Money is reporting that the internet might be at a stage of another dot-com boom, with the top tech stocks now gaining ground again after the dot-com crash. From the article: "Now, 10 years after two key events in the history of the Internet -- the successful IPO of Netscape, which many cite as the beginning of Wall Street's love affair with 'Net stocks, and the founding of Yahoo! -- we're in the midst of a new, let's say mini dot-com boom.""
There's no end in sight!
Not to mention Google's IPO today, which has been valued quite highly.
Google is a great company with some really good services, but where does their core revenue come from, other than ads and maybe sales of their few SE boxes?
Makes you wonder, once again. Remember - it does not matter if you have the greatest idea on Earth, if your revenue is not from tangible assets (for relative measures of tangible ofcourse), the market will put you down eventually.
This is what I'm scared of - if things like that do happen, we'll once again go into an IT industry crash.
It's this kind of speculation which drove the first dot-com boom... and eventually burst the bubble.
OLPC Australia
It will be interesting to see how Wall Street reacts the second time around with these tech stocks. I would hope people can look back now and wonder what they were doing, consistently buying these stocks with P/E ratios of 300 and higher. With the tech bubble of the 90's still fresh in investors' minds, I would speculate that this time it won't get quite so out of hand. The name of the game on Wall Street is earnings, and in my opinion, one of the biggest problems we had with the last tech bubble is that so many of these companies had no earnings to speak of. To make matters worse, I don't know that a lot of these companies (pets.com) had a good idea of how they would ever have earnings. Hopefully the big investors such as pension funds, insurance companies, and mutual fund managers will think twice about backing some of the more obscure companies. Perhaps I should do an understandfinance.com IPO :)
Finance tutorials and more! Understandfinance
...whether it's mini or not in my mind. Hype is what helped cause the legendary dot-bomb, and I'd rather keep my job.
All credit given to successful internet companies, I don't see it as a boom of any sort, I think of it more like big forecasts for what has actually worked this time around. Google may not continue to rise endlessly in the stock market, but internet companies are doing better in part because the internet is becoming so ubiquitous that you really can't avoid having some tie-in to your website in many industries. I'm glad to see companies coming back from the dot-bomb, but I can't call it a boom or a mini-boom.
How about a more stable term like 'successful market'? That sounds a little bit safer than over-hyping things again.
Perfecting Discordia
www.stevenvansickle.com
The gangsters in the movie are nervously sitting around in the hotel bar waiting for the hurricane to hit. Rocco, who's a tough guy but can't stand the tension, orders one of his underlings to talk. The most cheerful thing the thug can come up with on the spur of the moment: "I think in a coupla years, maybe, they're gonna bring back Prohibition."
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Look at that PE. Do the fools never learn?
Blasphemy! How dare you suggest that Google might not be worth nearly EIGHTY BILLION DOLLARS. That's its current market capitalization.
How does that compare to other companies?
Oracle: 64.78 billion
3M: 58.56 billion
American Express: 68.43 billion
Disney: 57.82 billion
General Motors: 19.48 billion
Red Hat: 2.2 billion
Anyone that suggests that a brand new company like Google shouldn't be worth 4x more than General Motors just isn't thinking correctly.
I'm a big tall mofo.
Too true.
Generally, it's one boom per industry, then people settle down and start working at it. Just because stocks are finally rebounding doesn't mean the gold rush is back.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Google should remember to grab as much copper wiring from the walls as possible!
The internet is a new playing field. It is going to go through a few cycles like this before everything evens out and we get to a stable place. Also, since the bust, there's been a lot of increases in not only technology, but also availability of the internet. There's lots of new stuff to try out. There's going to be a lot of companies that want to try out new things, take a risk, because it could end up meaning big income. Going global on the internet is more possible than with other types of business. I think there's a lot of money to be made, just like the first time around. The good ones will survive, just like the first time around.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
GM has a major outbound flows. I was reading how of every car they ship $1600 goes to just Pensions. Their stability is declining. Income from tangibles is all well and dandy, but Google's has next to no materials overhead which tips the scale. Still it's not the income, it's the long term stability. Keeping Google afloat is cheap. If a goose eats $100 bill then it better lay golden eggs and this goose is laying some nice golden eggs. Once last word to the to wise, playing the stocks is like surfing. You ride the wave till it falls. Long term anything in the stock market is a fools game.
Sorry about the writing. Robot fingers, you know? Cliff Steele in DOOM PATROL #23
Booms are good. Insane run-ups like the dot-com boom in 1998-2000 are not. I graduated right into it, and ended up working in IT for decidedly non-dotcom companies the entire time. My reasoning: I was learning, so I might as well start with an established company. Turns out that was the right decision, even though it really bothered me watching people I knew changing jobs every 6 months for 30-40% pay increases!
If you want another example of a bad boom, just look at the housing market lately. I read a statistic the other day that said interest-only mortgages have reached 40% of all loans made in some housing markets. Just wait until interest rates go back up and the interest-only period ends. People will be paying way too much on houses that aren't worth nearly what they bought them for. I see this going on in my area, and I just wonder when the market is going to tank.
Market bubbles seem to occure every 3 generations. The big ones that come to mind are Dot-com, 1929, the railroads, the colonies, ... Dutch tulips... seems every 3 generation(s) that has their savings wiped out and dreams dashed wise up to the chants of "this changes everything", "this market is different", "these properties will only gain value", "these prices will last forever". I think it will be another 50 to 75 years before there is a new buzzword technology and enough new suckers who can't remember the previous crash.
You better believe Buddha knew how to calculate a P/E ratio. Zen investment is what it's all about.
William of Ockham had no beard. The most likely explanation is that it was chewed off by squirrels every morning.