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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 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 :)
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...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
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.
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.