Remember the 1990s, when it was a “new paradigm” for technology stocks? So do I. In those days, tech stocks were supposed to deserve their massive valuations because, well–because they were tech stocks.
(In my prior life as a tech-stock analyst, I made many reasonable-seeming arguments about why tech stocks were not, in fact, as outrageously priced as they seemed. Several of these arguments sounded good at the time. In hindsight, unfortunately, they were moronic.) (For more, please read “Why Wall Street Always Blows It.”)
Well, we’re back to the old paradigm now, and tech stocks have returned to their pre-1990s-bubble levels. And now the global economic collapse is clobbering them even more.
For the not-so-fun of it, Rachel King and I took a look at the long-term performance of 25 of the household tech and media stocks of the 1990s that still have the good fortune to be around. Not one is above its 2000 peak. Not one is above its 2007 peak, either. In fact, the best-performing of these stocks, Netflix (NFLX), which had the benefit of going public after the Bubble 1.0 frenzy, is down 28% from its peak. And that, sadly, is performance to die for these days.
And the worst-performing stocks? You don’t want to know. But you will soon enough.
Welcome to Ohhhh, My Aching Tech Stocks, our painful trip down memory lane.* Advance the slides using the ‘Next’ button in upper right corner of each slide. (And note that these are all-time charts–they don’t just start in the 1990s. Note also that they logarithmic charts, which show percentage changes, not linear charts, which treat each $1 move equally).
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* In case you’re wondering… Yes, I still own a fistful of these things–Yahoo, Amazon, eBay, AOL, Microsoft, etc. I bought them in the good old days, and never sold a share. Now I keep them around for the nostalgia. And as warning signs.