Quote:
Originally Posted by Demonpenz
I don't buy that fud in the new york times, people are salty because now people found out about the band you were listening to before it is cool.
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Of course they're salty. Doesn't mean they're not right.
A buddy of mine worked for Amazon in customer service in 1997 or so. He got fired for a couple of bone-headed screwups - mainly making fun of a woman in internal emails for expecting free shipping to Japan and complaining when she couldn't get it. The cult is strong.
Anyway turns out a year or so later he'd have been worth $1 million on paper, just for answering the phones saying "Hi thank you for calling Amazon, how can I help you." He would only be able to sell 1/4 of his stock per year, and most of those were after the crash, so ultimately he'd have been able to cash out for $400k or so. Funniest part was his girlfriend at the time stayed on, dumped him, cashed out and bought a nice condo on Capitol Hill.
So yeah, he was bitter. He became one of the biggest dotcom bears on The Motley Fool in the late 90s (Rimpinths). He was ****ing hilarious. It was easy for someone not emotionally invested like to me see that his and the other bears' arguments were grounded in numbers and reason. While the starry eyed believers arguments always amount to "yeah but my stock is going up, so your point is invalid."
Two of my other friends were investing in shit like AOL and JDSU and sending us these cheesy articles about how old methods of valuing stock (P/E) don't matter in the internet age, and basically saying we could all IPO ourselves someday. Sounds a lot like some of the crazy stuff coming out now - like how blockchain, the ultimate design by committee - is gonna somehow make better decisions than a smart human leader with a solid vision. Imagine the Chiefs run by blockchain. They'd have released Alex Smith after the self-sack vs. NE, then fired Reid before halftime.
Anyway, turns out my dotcom bear friend was dead right on everything. Even Amazon which eventualy recovered but only because it hit a grand slam home run on everything it was trying to do. You could have always sold AMZN at the height of the bubble and bought back in later and saved a ton. Almost every other internet darling never recovered. The Nasdaq took what 17 years to recover? After the '29 crash the S&P took 25 years to recover.
But because of my friend, and reading about past historical bubbles and how they end, I KNEW when the NASDAQ dropped 1000 points for no reason in April 2000, that that was it. Bubbles almost always end on some insignificant thing that causes a panic - because ultimately the music has stopped.
I planned my career in computer programming (at the time) around that, and it worked out well. I got a job at a startup while they still had their funding. Then got a job at a giant healthcare company and weathered the storm of 2001-2002
I also knew when the shit hit the fan with Meredith Whitney's downgrade of Citibank - to get out of the market. And actually I had pulled my 401k out before that because I knew housing was in some kind of bubble and things would get bad. Although obviously I did not know that derivatives and MBSes were driving it. I just knew something was out of whack.
And I see all the same signs here. I also got really lucky and got back into the market almost at the bottom,
which is documented here. But then I got stupid and frittered a lot of my gains away with ETFs. Biggest lesson learned there - don't try to time the market and I probably don't know anything - except maybe I can spot a bubble.
Although - I will grant you that none of the crypto people so far have resorted to "well yeah but my BTC keeps going up to ppppptttthhh!". So again, we may not be anywhere near peak bubble. Which was my point earlier - early dotcom bears thought that was at peak bubble, then it went up 10x when my uncles put a big chunk of their life savings into Munder Net Net. Actually a really good sign of a bubble close to popping is when the bears capitulate. So if Mr. Doge Coin ever writes an article that he was wrong - might be a good time to take some a cash breather for a bit.
I guess the only thing I'd bet my entire net worth on is that at some point the crypto bubble is going to crash, and it's going to be bad. But that could take 5 years and it could 10x (or more?) from here. Tulipmania lasted generations. But you have to figure things moved slower back then.