For the last couple months, most everywhere on Talking Heads TV or its teenage equivalent, FinTwit, you can find wise old heads saying “there’s going to be a wipeout in growth stocks, because rates and inflation”. And citing the Great Career Defining Event of those tech investors now in their 50s & 60s, being, the Dot Com Crash.
For those of you who are yet to become pickled in your views on life (speaking as Old Folks ourselves), this is what has happened in tech stocks going back to the Recent Pleistocene Era.
Dot Com Bliss
1995-1999 - A new thing called the Internet came along and everyone said it was going to change everything so everyone bought the stocks because valuation didn’t matter only something called eyeballs mattered.
Dot Com Bomb
2000-2003 - It turned out that not all those companies were viable and a lot of the stocks went down and a lot of people lost a lot of money.
The Dark Ages
2004-2010 It turned out that some of the companies were viable and very quietly some people started to make an awful lot of money in tech but didn’t tell everyone how to do it, the cads.
2011-2019 Finally all that fiber paid for by the defaulted junk bonds issued in the Bliss years got linked up and lit and not connected solely to corroded lengths of aluminum wire euphemistically called the ‘last mile’ but instead maybe to some coax or shiny copper or, if you were exceptionally lucky, some glass. And lo and behold did the Internet start to work properly. And the eggheaded guy that kicked off the Bliss Years, now fully dissembled into an acronym rather than a name, kind of anyway, declared that “Software Is Eating The World”. Then under the said cryptonym a16z proceeded to make a whole lot more money than Jim Clark ever even dreamed of.
Work From Home
2020-2021 Internet stocks briefly fall 80% along with everything else. Then the stock market geniuses of J Powell, D Trump and N Pelosi headline Saturday Night Live with a cold open of, “We Got Your Back”, and, like magic, stonks only go up!
2021 Q4 - The Fed Kills Growth Stocks.
Protagonists of this view point out that we’re in for a decade or more of stagflation, that the sequel to How The West Was Won will be produced in Mandarin, and only then if we can all hide out under the staircase for long enough for the nuclear winter to pass, or maybe hope that the arsenal has been laid low for so long that a fizzle yield is all that’s on offer.
Growth stocks? they say. Hay-yull no. Avoid! There Could Be A Dot Com Crash All Over Again.
Well, grandpa, lookit. Here’s what the Dot Com Bomb looked like (you can open a full page version, here