"The "New Economy" was nothing but a sham. Shame on me for not seeing it that was and actually believing that valuation doesn't matter."
I don't agree. We _are_ in a new type of economy, or at least one more accelerated than in the past. Faster decision-making, delivery of key items by UPS and FedEx on an expedited basis, cell phones everywhere, online comparison shopping, and so on.
(Look at the just the current crop of business advertising: the IBM ads on Linux servers (and how there is "no magic fairy dust," no "business binoculars," etc., just solid engineering), the "Let Brown work for you" (UPS), the guy ordering pallets of titanium from Taiwan with the click of a mouse button, etc.)
Granted, some of the hype was and still is exaggerated. A lot of the dot coms folded.
(I've mentioned UPS twice, for a good reason. They are in many ways the defining "new economy" company. Who needs pets.com or even amazon.com when buyer and seller can link fluidly over the Net, then a UPS truck picks up the package and delivers it to the buyer three days later? Even the USPS is getting in on this. The reals "clicks and mortar" is the fleet of trucks and cargo jets.)
The hype about VA Linux challenging Microsoft was just that, hype.
I thought the IPO for Netscape was overly-hyped, and I tried in the summer of 1995 (or maybe it was '96, but I think it was '95) to sell them short. Alas, no short sales for six months after an IPO. So I looked around for a company making what Netscape was hyping (business middleware). I bought Oracle instead of selling Netscape short. It's still 3-4 times what I bought it for then, which is OK by me.
Examples abound of where money could be made by buying solid companies making solid products to build the "new economy."
"Who is to blame for creating this myth? Certainly not Intel exclusively, though you could argue that Intel got caught up in the "New Economy" mentality like everyone else. I'd argue that Carl also got caught up in it."
Carl was quite gleeful of Intel and Cisco when they were near their highs. Go back and look at his almost worshipful comments about Intel management.
Now that both have come down off of their highs--though, like Oracle, still well above 1995-97 levels--he is derisive about management.
And those very stock options that Barrett is now exercising were almost certainly granted around this time, around the mid-90s, judging from the strike price. As I said in a recent post, options have expiration dates, a "use it or lose it" situation. And given the way ISOs are taxed, and the recent situation where some people got wiped out by being taxed at the spread at the time of exercise even though when they sold the stock was much lower in price, it makes sense for execs to "exercise and sell." Any accountant or tax advisor would say this is the only sane course given the way the tax laws work.
I said this a few days ago, but Carl, Dan3, Kapkan, and the other Droids just don't want to acknowledge this point.
"Funny thing is that those who missed the chance to make out like bandits are the ones who are complaining about said bandits. That to me is a very precarious moral position to take."
If Carl wants to change the way options are given, he can vote his shares accordingly. (He won't change the very options he's complaining about, of course, as they were already granted. But perhaps he can change the way options will be exercised in 2007 and 2010 and so on. Hey Carl, knock yourself out!
--Tim May |
