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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Zeev Hed who wrote (78519)3/11/2001 4:59:46 PM
From: LLCF  Read Replies (1) of 436258
 
< Don't blame the big investment houses (at least not too much), that big money heaven was created actually by the Clinton administration, and they truly did not mean it. The instituted a special "super capital gain" (in 1993, if memory serves, 50% of "normal LT Cap gains if invested for five years in a company having less than $50 M assets) , which had as a major result having "very big money" looking at how to take advantage of that (just as the special tax treatment of real estate, prior to Reagan changing the "at risk rule" created a bubble in real estate and the resulting S&L fiasco). >

Zeev,

In my opinion the investment houses role in the tech bubble cannot be underestimated. Without them recommending stocks and concepts at ridiculous prices many investors no doubt have turned away... let alone the fact that what got funding and went public were what could be sold, not what had promise to make money long term. The same dynamic of every bubble was present again... supposed 'authorities' tossing good judgement to the wind... note how only 'ideas du jour' got funding and went public.... biotech for instance had a short window of opportunity for funding IMO showing that the tax incentive itself was not THE driving factor. Another anecdote, the general public piled in big, they had no clue about tax breaks, the houses herded them into the shearing shed:

sunday-times.co.uk

DAK
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