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The Y2K Hoax I read an interesting article today about how statistics and numbers are manipulated and exaggerated to promote certain political or social agendas. One example was the child-abduction craze of the early 80's. It all started when John Walsh (of America's Most Wanted fame) testified before Congress that "over 50,000" children a year were the victims of abduction by strangers. Next thing you know, parents were taking their small children to the mall on leashes and eyeing every stranger with suspicion. Truth of the matter is that no more than 200 - 300 children are the victims of stranger abduction yearly. Many others simply run away from home or are taken by a non-custodial parent. The point being that many people, alarmed by the thought of a football stadium filled with children vanishing annually, simply went into child-abduction panic without bothering to question the premise and dig for the truth below the media hype. Now the computer industry has to deal with its own big, ugly hoax - it's called "the year 2000 problem". Exactly when and how this load of hooey started careening down the information-superhighway is not clear, but much of the blame for raising this non-issue to the scale of a full-blown hoax can be placed squarely on the shoulders of two men: a pudgy, and until now, little-known Canadian "consultant" named Peter De Jager, and a former analyst with the Gartner group named Kevin Schick. First, we have Mr. De Jager giving Y2K seminars to anyone who will listen. Not coincidentally, many of these seminars are sponsored by Data-Dimensions.a Y2K consulting firm. Mr. De Jager boasts that he is a credible "expert" on the subject because he also sat in front of Congressional committee to give a 30 second speech about his year 2000 computer doomsday hallucination. Next, we get Mr. Schick throwing around THE BIG NUMBER. THE BIG NUMBER (600 BILLION DOLLARS.and maybe as high as 1.5 TRILLION DOLLARS) is designed to create the illusion of a panic (The deadline can not be missed! There is only a little time left! Costs will only continue higher!) The hefty dollar figure is designed to impress upon lay people (hopefully, people with very little understanding of computers, but with control over big budgets) the "vast magnitude" of this make-believe crisis (which is not a crisis to begin with, not particularly relevant to modern hardware and software, and actually fairly trivial to resolve). Most importantly, it is designed to get them to spend money for Y2K "services" and "solutions" offered for sale by a company that, not coincidentally, offered him a cushy VP job (Viasoft). From this has grown a mini-industry in Y2K conferences, Y2K "services" of questionable value, and - of course - lots and lots of stock speculation. Unfortunately, the scientific evidence does not back up claims of the true believers, but like any religious zealot, they're not interested in gathering empirical evidence to support their hypotheses. They'll point to the skeptic and scream, "You're in denial!!!" They'll point to multi-million dollar Y2K contracts and memos written by defense department flunkies. They'll then make dire predictions of financial institutions collapsing, planes falling out of the sky, elevators stopping, and cars not starting as their computers go bezerk at exactly 12:01 am on January 1st, 2000. As with any scam, science and reason have been left in a Dumpster. In much the same way that con artists who deal in quack-medicine, perpetual-motion machines, and miracle diet pills use "science-speak" to paint a fa‡ade of credibility and mislead their victims - the Y2K crooks use their own impressive-sounding pseudoscientific lexicon: "find, fix, test", "manual vs. automated conversion", "millions of lines of code per second" and various other phrases which may sound like real computer science to the layman but are actually meaningless gibberish. Like religious zealots, they make pronouncements that the problem is "real" and "huge", and angrily accuse skeptics (heretics) of a "lack of awareness". One of the clever tricks of the scamsters is to treat theY2K problem as a foregone conclusion. They'll fret endlessly about litigation costs stemming from Y2K problems and recommendations to short the stocks of banks and large computer companies (because *obviously* they'll suffer severe economic repercussions from Y2K problems). This old ruse is simply a device to misdirect attention away from the real issue: a critical analysis of the Y2K crisis hypothesis. Millennial apocalypse hoaxes and panics are nothing new. This one just happens to be a particularly embarrassing. With the Y2K story now filtering into the mass media (Newsweek stories, sound bytes on the evening news, etc.), I believe we are approaching the frothy peak of the hoax, and perhaps a spectacular opportunity for the investor to profit from the inevitable failure of Y2K companies to live up to their absurd valuations. The following stocks have been driven to unrealistic valuations due to Y2K speculation and are ripe for short-selling. However; short-selling entails considerable risk. Story stocks - no matter how high they climb - are heavily manipulated and can climb much higher before crashing to Earth (DNA and PRST being two great examples). ACLY - Accelr8 DDIM - Data Dimensions IMRS - Info. Management Resources VIAS - Viasoft ZITL - Zitel There are quite a few others, including some traded on the Canadian exchanges; however, the above list are particularly vulnerable because they are heavily dependent on the holy-grail promise of Y2K profits. A careful analysis of their income statements and balance sheets should give the intelligent investor a very clear about where the real Y2K profits are - in the pockets of stock promoters. | ||||||||||||
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