ZDNet: News: Dot-coms die ... and e-vultures hover

From: John Conover <john@email.johncon.com>
Subject: ZDNet: News: Dot-coms die ... and e-vultures hover
Date: Tue, 14 Nov 2000 11:21:57 -0800

Yea, the dot-coms have become the dot-bombs. But in bubble markets,
it is not that unusual. In oil at the turn of the century,
telephones in the 20's, radios in the 30's, TVs in the 50s,
semiconductors in the 60s, software in the 70s, games in the 80s,
etc., only about one in ten survived 5 years, and ever turned a
profit; and those made meticulous investors wealthy.

Interestingly, it is almost a zero-sum game, (what one investor
makes, another loses; investing in one-of-everything is a strategy
that will neither win, nor lose.)

And, the history of most of the bubble markets over the century?

They evolved from a panoply, (many players,) to an oligopoly, (a
very few players,) none of which makes very much money; just like
theory says they should.


BTW, the investors that made money in bubbles did not invest in ideas
or concepts. They invested in companies with the most market share as
the bubble developed. The families that did that over the past century
increased their net wealth by about a million X, (far better than they
could have done in property, metals, bonds, or the general stock
market,) including the Depression. (Theoretically, one should invest
in each of the companies involved in a market bubble, and the fraction
of the portfolio invested in each company is proportional to the market
share the company has; in reality, one needs to invest in only the top
ten, or so-the marginal value of investing in more than ten is not worth
the effort.)


John Conover, john@email.johncon.com, http://www.johncon.com/

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