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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Scott Bergquist who wrote (7424)	8/19/2001 10:28:52 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

<The "trillions gained" and "trillions lost" is misleading. Some firms would tell you themselves they didn't deserve multi-billion market caps. Was SCON really worth $120 a share?? BUYX at $30? CFLO at $100? What was really "lost"? > There were friction losses, but mostly it was simply a transfer of wealth [or money or whatever it's called] from those who bought at the top to those who sold at the top. That's not a loss. Since the bubble peak was so sharp, there had not been enough time for real losses to build into the economy. People were planning hugely expensive houses, getting ready to order personal jets etc, but for the most part were simply bemused by their Sudden Wealth Syndrome. They hadn't really tucked in. So the economic effects were minimized, thanks to Uncle Al's vigorous squashing of the mania before people really did damage. The rest was just a matter of numbers on paper. My wealth went huge for a while, then collapsed. But my way of life didn't change, so the numbers don't matter. I theoretically gained and lost, but in reality, nothing happened. If they had made the number $1million per share instead of $180 it still wouldn't have changed reality in the short time the spike existed. That's partly why we are getting away without a major problem. It didn't get baked into the economy. Inflation didn't take off. Productive activity wasn't distorted too badly. Although huge amounts were destroyed in creating useless dot.bombs, those huge amounts compared with the vast totality of the economy were trivial. Horribly unpleasant up close for those involved, but in reality not a big deal, especially on a global basis. Meanwhile, the vast value being created in cyberspace continues to accelerate. It has not slowed an iota. It was really a winnowing process. Bad DNA out, good DNA in! Mqurice