Dotcom fever has made the leap from the financial pages of broadsheet
newspapers to the tabloids—so trouble must be brewing. Suddenly, the Net
is big money. Companies that have never earned a penny are “worth” millions. If
you had been shrewd enough to invest in technology shares back in January 1999,
you would have doubled your money—if you matched the dizzying climb of the
Nasdaq index (www.nasdaq.com), that is.
Netropolitan doesn’t know if the Net bubble is about to burst, but there
are several cautionary tales about speculation on new technologies. Railway
mania is an early example. In 1848, The Illustrated London News was
warning of “fairy-like tales . . . of men going to bed worth nothing but a
letter of allotment and getting up in the morning possessing thousands”. At the
height of speculation, avarice quickly replaces reason. “The desire of gain has
become so strong that a railway to the Moon would have found speculators,” the
paper wrote. For more, hit the politics link
at www.mtholyoke.edu/courses/rschwart/ind_rev/iln/iln.html.
Fast forward to the next craze in 1907: the fraudulent wireless telegraph
bubble which was the subject of a splendid exposé in Success
Magazine by Frank Fayant (http://www.ipass.net/~whitetho/fool1907.htm).
The come-ons have an uncannily modern feel.
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For a tongue-in-cheek take on today’s technology bubble, visit
www.itulip.com—the website of The Internet Stock Mania Company: “We make
worthless junk for you to buy over the Internet ’cause it’s cool,” they say. The
site has a sobering comparison between today’s tech stocks and those in 1968.
And if you didn’t buy into lastminute.com and are feeling smug because you don’t
have any tech shares, bear in mind that Net stocks are now part of the
investment mainstream. So where’s your pension invested?
