Even amid rebound, tech-stock index still at half its peak
10 years after the tech bubble
By Aldo Svaldi
Investment adviser Kenneth James still remembers clients who called in 2000 asking him to get them in on the "lottery-style" gains their neighbors and friends boasted about.
"My strongest recollection was the nagging thought of 'Why am I not participating in this?' " said James, with Greenwood Investment Management in Centennial.
Then, he worried about losing clients. A full decade later, he is glad he didn't drink the Kool-Aid.
The Nasdaq composite index peaked
at 5,048.62 on March 10, 2000, taking several
In 2000, 32 public companies in
As of Friday, there were 30
Two companies account for the lion's share of that gap.
In 2000, Qwest Communications, laying fiber-optic strands across the country, crested above a remarkable $100 billion in market value. Qwest is now worth about $8.2 billion. Another broadband play, Level 3 Communications, once valued at nearly $50 billion, is worth $2.6 billion.
At least they survived. Half of the 32 companies in 2000 on the $1 billion-plus list, which should have reflected some expectation of durability, aren't around anymore as independent companies.
Most went bankrupt, got delisted or fell to valuations so low that stronger players took them out.
Investors in 2000 thought Rhythms Netconnections was worth $4 billion. By the summer of 2001, the DSL provider was in a bankruptcy liquidation.
Other highly touted flameouts of that era include New Era of Networks, ICG Communications, McData, Tanning Technologies and FirstWorld Communications.
About the only
Investors would have fared much better buying out-of-favor natural-resource stocks such as Newmont Mining, which has increased fivefold in market value over the past decade.
Stock markets are volatile because
human nature is volatile, but people do learn, said John
Claxton, a vice president of investments at RBC Wealth
"Nobody asks for stock tips anymore," he said. "It is rare we worry about the next hot stock."
Aldo Svaldi: 303-954-1410 or firstname.lastname@example.org