Monday, November 27, 2006

Tech: Who survived the tech wreck?

The internet bubble started bursting about 2000. Here's an article about some of the players, and what happened to them.

In a bubble economy, value is largely built on speculation. A commodity is overpriced (for its returns or intrinsic worth), but keeps selling and inflating in value. So if you wanted to safeguard your fortune, it would make sense to hedge, by diluting your holdings and parking some funds elsewhere. Because the price of the stock/commodity is rising all the time, the temptation is to keep your investment, but there's definite warning bells if the returns are paltry compared to the net "worth" of the company.

The article suggests most of the ruined entreprenurial players picked themselves up and built again on new ideas. However, I imagine there's a lot of more mundane outcomes, ranging from early retirement to waiting on tables.

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