QUESTION #1: MARCH 27, 2020
There were many events and changes in the market that led to the creation of the Dot Com Bubble, which do you think played the biggest role? And why do you think investors were so willing to throw their money into internet stocks?
I think that everyone was just following the trend, the Get Big Fast from the other perspective. If Amazon and Yahoo were so successful, what was to stop another company from being equally as successful? In terms of the biggest role, the precedent set by Amazon and Yahoo was definitely the biggest contributor.
ReplyDeleteThat's a very interesting point I didn't think about how a precedent was set for investors to be even more willing to throw their money at these new companies. Do you think we'll see investors act in such a way again?
DeleteI totally agree that Amazon and Yahoo's success showed smaller companies that they could also achieve success. It was inspiring to hear that they companies started from something small and became huge on the Internet.
DeleteInvestors did the same thing with the housing market in the early 2000s (and that crashed in 2008). The market was falling before coronavirus, but I'm not a stocks person so IDK if it was the same situation as the earlier crashes.
Deleteto hannah- I think it's possible to see investors act in the same way. I don't know when it would happen, but if a certain market appeared to be very lucrative for investors, I don't know what would stop other investors from jumping in
DeleteI completely agree. I had almost the same idea in mind that it was the example set by Amazon that started the success of the Dot-com era. People wanted to mimic the Get Big Fast strategy and hope for equal success from the internet.
DeleteHannah - I do think investors might react in such a way again. When new things come from new technologies, I absolutely believe people will invest with slight carelessness because of their hope and naivety.
DeleteI think when the next unimaginable thing comes to fruition like the Internet did, the same thing will happen. It's generational, like the book was talking about, people forget an then history repeats itself.
DeleteI think that the phrase Get Big Fast played a big role. As everyone saw other companies seeing tons of profits in a short amount of time people thought they could do it as well. It was the fact that everyone was making these companies and becoming rich. Investors were so willing because they were hoping to strike gold in the belief that even if there were losses along the way one company could fix it for them.
ReplyDeleteI think that you are right, greed played a big role no doubt and I think there were few who could really see the direction that the bubble was heading in.
DeleteI think the "greed" mentality was a hold over from the 80s when "greed was good". I think once that was out in the open, subsequent decades just became a free for all.
DeleteMaybe this sounds bad, but I don't blame them for being greedy! If a market seems to give you a really good chance at making a lot of money, why wouldn't you jump in?
DeleteI think the biggest role in the creation of the dot com bubble were the successes of early dot com companies. They were massively successful and had a relatively low barrier of entry compared to some other fields. This led to an massive influx of subpar dot com companies hoping to make it big which strained the market. I believe that investors were willing to throw money at internet stocks are, once again, because of the massive successes of internet companies and they believed that investing in any internet company could make them rich.
ReplyDeleteI agree. As the book said, VCs were able to get money back just from uber-successful IPOs, which most Internet companies produced due to pure hype for new technology.
DeleteI think the rise of Amazon sort of encouraged the growth of all the different companies in the Dot Com Bubble. It showed businesses that if they followed Amazon's Get Big Fast method, they would be just as successful. I think investors were willing to throw their money in because so many companies were rapidly gaining revenue on the Internet and they wanted to invest early and get rich quickly.
ReplyDeleteI agree, I did not even think about Amazon. Amazon was definitely a major business that pressured other companies and people to keep going and create more products, further advancing technology and the industry.
DeleteI think that the Get Big Fast strategy that Amazon used played the biggest role. I think that this motto motivated people to get a lot done in a very short amount of time. I think they were motivated by the success of these big companies and investors were motivated to get rich off of another big company like Amazon.
ReplyDeleteI think Amazon's success was the biggest motivator for the dot com era. Amazon and Yahoo's "Get Big Fast" served as a basis for other companies at the time and the outpour of online businesses that tried to copy their success created the bubble that investors were so willing to invest in. They saw what companies like Amazon had previously done, and now investors hoped they could make some money by riding the internet wave.
ReplyDeleteI agree that big companies set a precedent, and investors were essentially trying to piggy-back off of this wave in the hopes that they would also be able to strike it rich.
DeleteI think the success of certain companies like amazon played a really big role in the creation of the bubble. I think a lot of people saw what amazon did and looked at it as an example of something they could do to get rich, so a lot of people with high hopes created a lot of websites. And then I think investors saw what happened with companies like amazon, and thought if they were able to invest in the right company, they could get some pretty great rewards. And the reward was big enough to make up for a few mistakes, so they were willing to invest in a lot of stocks, in hopes that one would succeed.
ReplyDeleteAmazon did start a precedent for future companies to try and recreate but with their own twist. It was really a unique idea that would forever change the industry.
DeleteI think the Get Big Fast era was a huge part. People were trying to compete with other companies, because they knew the longer they waited, the more money they would lose and the more time that others had to create something game changing. Investors, sellers, and consumers all fed off of each other to keep the industry going and growing.
ReplyDeleteI think the initial success of Amazon was one of the largest pushes for the bubble to occur, because it made people realize how much the Internet could replace physical stores and businesses. Bezos inspired many people to make companies to do similar things, such as Pets.com and eToys. Amazon's market cap was also constantly increasing leading to and during the bubble, making so many people realize the potential of the dot-coms. They were willing to fund any company that they though could obtain a decent market share over physical companies.
ReplyDeleteI agree with this. I think people started to take advantage of online retail because of its convenience and popularity.
DeleteI completely agree that Amazon's success was probably one of the biggest contributors to the dot com bubble. It showed what the internet could do and the power it held and everyone wanted part of it.
DeleteI think people just did what they felt was new. Internet stocks were getting to be popular, if a neighbor or friend was doing it, you probably were too. I think Amazon really played the biggest role in the market for the Dot Com Bubble because of the Get Big Fast.
ReplyDeletei think the (peer?) pressure that investors were facing is definitely a big factor, good point!
DeleteEarly FOMO! And I heartily agree - I went to work at an internet company because all my friends were doing it, learned that I hated it, and went back to traditional business. Didn't make a ton of money but also didn't lose a ton!
DeleteI agree, pack mentality played a big role in everyone investing
Deletei found it really interesting when the book said that one of the big factors was the boomers coming into trading because they were getting ready for retirement, i hadn't thought of generational shifts before so i think that was one of the bigger things. i also think that boomers weren't exactly sure what the internet was capable of, i mean no one did but it was mostly gen X leading the charge, so they just invested anyway
ReplyDeleteAs someone at the tail end of the boomer generation, trust me, we only look at funding our retirement when retirement is really close!
DeleteInvestors were mainly trying to catch up with the Internet company trend. In large, successful companies, smaller investments panned out to be worth billions in the long run. Investors wanted a piece of this wealth, and had to get on board with the "get big fast" mantra by getting in while they could. I think that Amazon, Yahoo, and eBay were the biggest contributors to this.
ReplyDeleteI think that were many factors for the Dot Com Bubble. Companies like Amazon were forcing retailers to go online and opening a new opportunity to connect the real world with virtual tools. This Get Big Fast method was being used by many companies to continue expansion in this new space. Investors were willing to throw their money around because it was like buying a lottery ticket, but your chances to win were much higher. The initial spending of money seemed like a loss, but eventually would grow larger.
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