Must-read for the day, in the Washington Post; a humorous(?) essay by Ben Stein, the actor ("Win Ben Stein's Money"), on Net stocks. By the way, his father was a well-respected economist.
search.washingtonpost.com
An excerpt:
"My former roommate, Arthur, pushed me over the cliff when he said, "Yes, the prices are crazy. Yes, the country is crazy to pay those prices. But we're not the national psychiatrist sent to analyze their moods. It's not our job to set America straight. Our job is to provide for our families." And, he added, "Why not join in just so you won't feel jealous of everybody else making money on the stocks? "
I did. One day, I saw a piece about a company called CMGI. It used to make mail-order advertising circulars. Now it invests in Internet companies. CMGI's stock had started 1998 at 12. When I bought it in December, it was at 80. In that one day, it went to 99. ONE WEEK LATER IT WAS AT ABOUT 270. (Note to Mom: I have no idea what dividend it pays.)
I bought a little AOL. It did about the same. I bought a smidgen of Yahoo. It did even better. I looked in the columns of the pundits. They all said those stocks were garbage. The stocks just went higher.
Then they swooned, and I got nervous. I sold some of my small holdings. Two days later, they were higher than ever.
Some bubble. You can't prick it with a steam shovel. Now my Net stocks are down a little bit from their highs. So what? Some are still about 100 percent above what I paid for them mere weeks ago. Maybe the prices are ridiculous and not real. In fact, I know they are.
I have already sold some, and that'll pay a few mortgage bills--and that's real. Maybe the stocks are dog doo-doo, but the money in my account after I sold--well, as the Roman emperor Vespasian once said, "Pecunia non olet." The money has no smell."
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