It was late winter at the dawn of a new century. Years of bluster and promise had delivered the Information Age to our fingertips. We had survived the menace of “00” on computer calendars. And then it happened. The bubble burst.
A short 15 years later, the Nasdaq is back. The virtual stock market index that has a real home in Times Square has returned to the neighborhood of its Internet bubble high. But it’s a much different neighborhood than it was a decade and a half ago.
Apple is a giant. First it was the iPod, then the iPhone, next the iPad. Apple is the largest publicly traded company with billions of dollars of cash in the bank. Amazon.com has buried several retail brands since 2000. Netflix has invented an entirely new media business model. Google has transcended business to become a verb.
It’s a dangerous thing for investors to think, “it’s different this time.” But it’s also natural considering how the investing environment and business climate has evolved. Fifteen years ago, no self-respecting technology executive would think of paying shareholders regular dividends. Extra cash, if there was any, was plowed back into the company. In 2000, technology profits were scarce and tenuous. Today, the profits are real and growing for many firms. The Nasdaq gained 1,000 points in the first three months of 2000. It’s taken five times as long this time around.
In the week ahead, as the Nasdaq threatens to eclipse its record high, investors should celebrate the journey as much as the destination.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.