Ten years ago, investors knew that technology would change the world, and they were right. But you can be 100% right about the future and end up with zero to show for it if you overpay in the first place.
On March 10, 2000, the Nasdaq Composite index closed at a record of 5048.62, up 24% since the beginning of the year, after an 86% gain in 1999. And many were calling for the Nasdaq to hit 6000 within a year or two.
It closed yesterday at 2340.68.
What went wrong? Looking back with 20-20 hindsight, you might think that millions of investors had gone insane. Americans in every walk of life — barbers, taxi drivers, waiters, air-traffic controllers — were convinced that they could get rich quick by trading Internet stocks.
Technology shares were going up more in a few weeks than traditional stocks normally gain in a decade: PMC-Sierra Inc. had tripled since the end of 1999, while Juniper Networks Inc. and Inktomi Corp. had more than doubled. Yahoo Inc.’s stock traded at about 2,000 times the company’s earnings per share. Amazon.com — which, like 15% of the companies on Nasdaq, had no earnings — traded at roughly 48 times its book value.
It is tempting, but wrong, to write off the tech mania as mass insanity by the ignorant and ill-informed. In March 2000, a survey of chief financial officers by Duke University found that 82% of these sophisticated insiders felt that their stock was underpriced, 15% thought it correctly priced and only 3% overpriced.
Most of the consensus favorites among tech stocks turned out to be investing disasters. But in an odd way, the Internet bubble has left all of us better off, as its benefits have percolated throughout the economy and produced huge productivity gains across all sectors. The same can’t be said for all bubbles; many homeowners aren’t better off just because the real-estate frenzy put millions of people into homes they couldn’t afford.
Technology was transforming business so fast that ‘nobody knew how to value things,’ says Elroy Dimson, a finance professor at London Business School and co-author of the definitive history of global stock returns, ‘Triumph of the Optimists.’ Adds Prof. Dimson: ‘There were lots of people who thought those were crazy times, but the consensus view was that cash flows would keep growing rapidly.’
Like most bubbles, the tech mania was rational and foolish at the same time. Investors foresaw a market opportunity that would be explosively profitable. Then, with no sure way to know who the ultimate winners would be, they bid up every company having anything to do with that opportunity.
The Internet did change business forever, just as investors had predicted. And a handful of technology companies did strike it rich. But by far the biggest beneficiaries of the Internet boom were the companies that adopted the new technology rather than those that provided it. When I asked Aronson+Johnson+Ortiz LP, a Philadelphia money manager, for a list of the 100 top-performing stocks over the past decade, the roster was dominated by energy, health-care, materials, industrial and even financial companies. Only eight tech stocks made the list.
That is mainly because their share prices got so inflated in the first place. As businesses, tech companies did very well. Technology was the most profitable sector in the Standard & Poor’s 500-stock index in 2009, contributing $93 billion of earnings, estimates Strategas Research Partners. Since the beginning of 2000, tech companies have generated $608 billion in cumulative profits. They have piled up $349 billion in cash, or 35% of the total at nonfinancial corporations. And over the past 10 years, Amazon has doubled even as the S&P 500 went nowhere.
But back in March 2000, the 10 largest tech stocks were valued at a total of $2.4 trillion, or 19% of the S&P 500’s market capitalization. Since everyone was sure that the Internet was a winning technology, but no one could know exactly who the winners would be, investors paid through the nose for just about every Internet-related stock. Among those 10 biggest tech stocks: Lucent Technologies, Nortel Networks Corp., America Online and Sun Microsystems Inc., which all went on to lose most of their value.
It’s a Wall Street cliche that ‘investors hate uncertainty.’ The clearest lesson of March 10, 2000, is that uncertainty is the only thing investors should like.
当时，科技股短短几周内的涨幅甚至超过了传统股票十年的涨幅。网络架构半导体解决方案提供商PMC-Sierra Inc.的股票较1999年底的水平上涨了两倍，瞻博网络(Juniper Networks Inc.)和网络搜索软件制造商Inktomi Corp.股价也上涨了一倍有余。当时雅虎公司(Yahoo Inc.)的市盈率达到了2000倍左右；那时还没盈利的亚马逊公司(Amazon.com)的交投价格约为帐面价值的48倍，而纳斯达克指数成份股中有15%的公司都还没有开始赚钱。
伦敦商学院(London Business School)金融学教授埃罗伊•迪姆森(Elroy Dimson)说，科技极其迅速地改变了商业的面貌，以至于没人知道应该如何进行评估；有许多人认为那是个疯狂的时代，但是当时大家都认为现金流仍将快速增长。迪姆森与他人联合撰写了一本名为《乐观者的胜利》(Triumph of the Optimists)的全球股市回报历史研究书籍。
互联网确实永久性地改变了商业，这一点与投资者的预测毫无二致。而且很多科技企业也挣了大钱。但是，到目前为止，在互联网的繁荣中受益最大的是那些采用新技术、而非提供新技术的公司。当我请费城投资公司Aronson + Johnson + Ortiz LP列出过去10年表现最佳的100只股票时，名单里满是能源、医疗保健、材料、工业甚至金融公司，只有八家科技公司登上了这一榜单。
这主要是因为它们的股价一开始就膨胀得太厉害。就其业务本身而言，科技公司表现得非常好。资产管理机构Strategas Research Partners估计，在2009年，科技类股可能是标准普尔500指数中盈利最佳的板块，利润总计达到了930亿美元。2000年初以来，科技公司累积盈利6,080亿美元，创造了3,490亿美元现金，占非金融类企业现金规模的35%。在过去10年中，尽管标准普尔500指数毫无长进，亚马逊股价却实现了翻番。
然而，2000年3月时最大的10只科技股票总市值达到了2.4万亿美元，占标准普尔500指数市值的19%。虽然每个人都深信互联网是一项成功的技术，但没有人确切知道那些公司能够笑傲江湖，因此投资者花大钱投资了几乎每一家网络公司。在当年的10大科技股中，朗讯科技(Lucent Technologies Inc.)、北电网络(Nortel Networks Corp.)、美国在线(America Online)以及Sun电子计算机公司(Sun Microsystems Inc)如今已是价值全无。