Morris, Amazon and the internuts went to their insane heights for one simple reason. I don't think this has been pointed out before:
Whenever there are 20 times more stupid people (everyone with an AOL account became a daytrader in late 1998) than smart people playing with a stock, those "smart" people are going to get killed. Also, those "smart" people tend to have more money than the stupid people- amazingly enough I'd bet the ratio is 20x more money.
So the smart people bet against Amazon, and the stupid people piled in and not knowing any better, assumed it would go up because they had a cool website.
So the 20x people extracted the money from the "smart" people who had shorted it. And up it went. It was simply a transfer of wealth.
However, the "smart" people have now realized that the laws of numbers cannot be won regarding net stocks through shorting when a mania starts.. Yet paradoxically, AND THIS IS THE IMPORTANT PART, the "stupid" people can no longer make the stocks go through the roof because there are no "smart" people left to take the other side of the trade and short it.
Many "smart" people have simply left this stock altogether. They have realized the carnival game is rigged, and there is really no point in playing anymore.
But the "stupid" longs still think these stocks are going to the moon, so they wont sell, which leaves us exactly where we are today- NO VOLATILITY and NO PROFITS FOR ANYONE, only a slow and drawn out collapse back down to fundamentals. (in scamazon's case, < $10 p/s)
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