I don't remember so much yammering about the dot com bubble before it burst.
It seems to me if it's on the tip of everyone's tongue, it's nothing to be afraid of. There are probably worse things out there that could trigger a debt crisis or something.
I do. Seriously. People were saying things were crazy with all these companies like Pets.com that had extreme valuations and negative earnings. But people were also very excited. Companies were adopting dot com interfaces (i.e. web sites for buying etc.) as fast as they could and constantly touting their dot com personas. But it was really all tech too - chip companies, networking companies, etc., NASDAQ was going crazy! All these start-ups and fly by nights - money was just being thrown at anything that went public that year, and companies were rushing to do so. Traditional large non-tech companies, especially value companies, had depressed valuations at the same time. There were really funny ads at the time like ETrade’s 2002 Super Bowl Ad “he’s got money coming out the wazoo!”
I also wondered whether the markets were climbing a wall of worry because we also had Y2K hanging over our head and folks were very concerned.
But the Fed really broke up the party because they raised interest rates in late 1999 due to inflationary pressures just as oil prices had also significantly increased. So it was a double whammy and the negative earnings companies weren’t sustainable in that environment. It just all fell apart like a tall stack of cards.
I retired mid 1999. I had divested of a large chunk of my company stock to reinvest and diversify, but I was worried about the unprecedented extreme equity valuations, and in one of my very lucky breaks I decided instead to average into the markets over two years instead of the traditional one. By 2001 I switched from monthly to quarterly so that the averaging in stretched out to three years, finally completed in Q4 of 2002.
Another lucky break, in 1999 I also sold all the individual tech stocks in taxable accounts that we had picked up in the sell-offs in 1997 and 1998 because they had run up so very much, many too early during that year, but who cares! I only held on to some of my remaining shares in CSCO.
This was actually to fund our initial larger travel budget in retirement. I exercised all remaining stock options and ESOPs. DH sold a small piece of investment land. We really cleaned house investment wise, streamlining for our new retirement phase. Again, dumb luck.
FWIW the dot com bubble burst in March 2000, and overall continued dropping until Oct 2002. It wasn’t just the dot coms - it was the drawn out 2000 election, the 2001 911 attacks, several massive corporate fraud scandals in 2001 and 2002, including Enron, WorldCom and some health companies. It just kept coming and coming.
