Does this feel like the Internet Bubble?

[SaulR80683]

I am quite scared, to be honest. I am not old enough to remember the internet bubble. But I know you got out of that bubble just at the right time. Which was very impressive. Could you please share some of your experiences back then. In 1999, what made you think differently than today.

Hi Everyone,

I think that if you talk to a number people who actually were investing at the time of the Internet Bubble, you won’t find even one who feels it was similar to the current situation. Not one! Because it wasn’t.

Back then, companies were IPO’ing with just an idea, with no revenue yet, and being valued at huge amounts.

I remember a famous analyst of the time, at the level of Mary Meeker (I don’t remember if it was actually her), saying something like: “Sure this company is at 200 times revenue, but it’s undervalued because “comparables” are selling at 400 times revenue!”

I remember Jeff Bezos, in an interview, saying something like “I’m flattered in investors’ faith in Amazon, but at 200 times revenue our stock is overvalued. We are just a bookstore, after all.” (Which at the time he said that, was what it was).

During the bubble everyone’s Aunt Tilly, the check-out person at the supermarket, and the cabdriver who picked you up, were talking about investing in Yahoo, and AOL, and the latest company of the week (you get the idea)! Right now, your Aunt Tilly, the check out person, and your Uber driver have most likely never even heard of Cloudflare, or Crowdstrike, or Datadog, or Zscaler, or Twilio, or Okta, and aren’t investing in them.

And these are real companies that are leaders in their fields, maybe even dominant in some cases, with multiple hundreds of millions of dollars of revenue at least, and growing very fast, in fact at rates of growth that I, personally, have never seen before in such mature companies in my long investing career. And their revenue is recurring, locked in in a way. In addition, most have high gross margins, and most are even profitable, and almost all have positive free cash flow, which means the business is actually putting money in the bank, literally, and NOT running up huge deficits and living on the next stock offering for cash to continue running the business, which was what was happening during the bubble. It was a crazy time.

No, this doesn’t feel ANYTHING like the year 2000 Internet Bubble!

Saul

[qwsong]

there were some sectors crazy like internet bubble: New energy/EV, most SPACs, WSBs. But not Saul stocks. Recent pull back is welcome in my opinion.

[Griffin100]

Saul,

Do you remember bathstore.com ?

https://www.alamy.com/stock-photo-a-bathstorecom-showroom-in…

That might have been peak insanity, where even the hint of an internet strategy was worth a shot. Did bathstore.com even have an internet strategy? Did it matter?

[GolfCaddy4PLynch]

Yes, I was around in 1999 and the mania then was still unlike anything I have ever witnessed since. Only the housing boom 2006 in Florida may have been similar.

In 1998 and 1999 I worked in web design in New York’s Silicon Alley, five blocks from the infamous Razorfish. A company that went public that designed websites. Just like Razorfish, we also designed websites. We were a bunch of kids that had rented an amazing downtown loft space and a typical client was the following:

1. Had just raised 10M
2. Wanted a website built in 6 weeks
3. Was planning for their IPO

No, I am not joking.

Cab drivers were day traders. Writing a business plan had replaced writing the great American novel. Tiny design agencies were getting rolled up to go public. We knew at the time exactly how out of wack everything was and people could not stop talking about it at bars and on the street. Dot Com Mania was everywhere.

Here is what Ivestopia has for stats.
By 1999, 39% of all venture capital investments were going to Internet companies. That year, most of the 457 initial public offerings (IPOs) were related to Internet companies, followed by 91 in the first quarter of 2000 alone.
https://www.investopedia.com/terms/d/dotcom-bubble.asp

That’s 548 Dot Com stock IPOS in 15 months. Most had zero revenue. While today the enthusiasm for SPACs may seem similar, there are now 306, it doesn’t come close. Yes, many SPACS will never find a target. But the ones that do, buy real businesses, that have revenue. They are not concept companies. And SPACS or other speculative investments are off-limit for discussion here, which should help newbies.

The companies we follow on this board, are nothing like a Dot Com stock.

And keep in mind that not all of those Dot Com stocks were a bust. Good businesses, that had revenue and had a good plan did emerge including:

• Amazon
• Ebay
• Priceline
• Broadcast.com (Which Mark Cuban sold to Yahoo. Okay, some just got lucky.)

The basic principles of investing that are espoused on this board would have also worked then as they do now. Invest incrementally into great companies, that have a sold business, with great management, and are in a high growth area. Take some money off the table when things look like they are too good to be true, and be patient.

The hardest part is finding the signal in of all the noise. But that is why we all contribute to this forum to crowdsource knowledge and increase all of our chances of success.

Good luck.

[SaulR80683]

Yes, I was around in 1999 and the mania then was still unlike anything I have ever witnessed since. Only the housing boom 2006 in Florida may have been similar.

In 1998 and 1999 I worked in web design in New York’s Silicon Alley, five blocks from the infamous Razorfish. A company that went public that designed websites. Just like Razorfish, we also designed websites. We were a bunch of kids that had rented an amazing downtown loft space and a typical client was the following:

1. Had just raised 10M
2. Wanted a website built in 6 weeks
3. Was planning for their IPO

No, I am not joking.

Cab drivers were day traders. Writing a business plan had replaced writing the great American novel. Tiny design agencies were getting rolled up to go public. We knew at the time exactly how out of wack everything was and people could not stop talking about it at bars and on the street. Dot Com Mania was everywhere.

Thanks to GolfCaddy! He captured the feeling of the time even better than I did!

Saul

[Citibeach44]

“During the bubble everyone’s Aunt Tilly, the check-out person at the supermarket, and the cabdriver who picked you up, were talking about investing in Yahoo, and AOL, and the latest company of the week (you get the idea)! Right now, your Aunt Tilly, the check out person, and your Uber driver have most likely never even heard of Cloudflare, or Crowdstrike, or Datadog, or Zscaler, or Twilio, or Okta, and aren’t investing in them.”

I was in Silicon Valley at that time. It was insane, a gold rush. Tables of 4 going down to Carmel and dining at Casanova’s and spending 20k on wine alone. 24 year olds buying 6 million dollar homes in Pebble Beach and tearing them down to build a bigger home. I watched from the sidelines in disbelief. Contractors flipping homes in 3 months and doubling their money. Then January 2000 came and it all went crashing down.

Today no bubble? Not to that extent, but I’d say a mini bubble. SPACs coming to market in a fury of activity and promise. Blank check companies without even a company yet in place to even discuss revenue.

The Reddit Gang and GME feels bubbly to me.

The run up early this year in the same names that gained 300% last year was a chase by the people that missed out. Had to correct and healthy that it is.

Everyone piled into the same names, just look at everyone’s portfolio updates.

I’ve heard so much mention of Cathie Wood and Ark Funds. I was in her funds two years ago and no one talked about them, now people around me talk daily about her fund moves. Maybe not Aunt Tilly or an Uber driver, but I now hear people that had no idea what the cloud was, they are now in all
the cloud names. Buying up the same names you and I are in, jumping into SPACs, all expecting to do at least 100% in 2021.

Remember when we discussed doing 25% in a year as being a great return? These younger investors now expect that per month.

So your right Saul, not quite like 2000, but I have seen the warning signs of greed, unrealistic expectations and too many piled into the same names, the same sectors. I had a bit of that same feeling in January that I had in Silicon Valley in 1999/2020. So we are now correcting, a direct symptom of these issues and I’ve welcomed it with open arms. Adding to CRWD at these levels isn’t like buying Pets.com back in 2020. You are correct in that. I did start to buy AMZN though at the end of 2020 and still own those shares. So it is more like that I’m hoping.

This correction was very much needed so we can rebuild from lower levels and then move higher without the silly speculation we have started to see. I want Aunt Tilly to be scared out of her wits and to go back to being invested in bonds. I was the kid traders on Reddit to lose their shirts and go back to playing video games and figuring out what they want to do with the rest of their lives besides dreaming of get fish quick schemes.

2000 bubble? No. Some sort of newer, maybe more streamlined sector bubble? Yea maybe and that’s ok, because on the other side of all these corrections is a great opportunity to buy great companies at lower prices. That’s the one thing they all have in common.

TMB

[captainccs]

I am quite scared, to be honest. I am not old enough to remember the internet bubble. But I know you got out of that bubble just at the right time. Which was very impressive. Could you please share some of your experiences back then. In 1999, what made you think differently than today.

I lost a lot of money in the 2000 bubble. It was much more complex than sky high P/E ratios (“discounted to eternity” my broker called it). A lot of the dot coms were vaporware but other businesses failed despite being well run, specially the optic fiber providers. The productivity of optic fiber grew so fast (Moore’s Law on steroids), driving down prices so much that they could not amortize their capital investments. They went bankrupt, deep pockets bought the assets for pennies on the dollar and we using the infrastructure today. Optic fiber also brought down the companies providing the optical technology. Satellite providers were much too early, GlobalStar, Iridium, and one more I don’t remember went broke. On the finance side some economists were saying that earnings were not necessary, all that you needed was cash flow from any source. David Skok seems to be saying the same thing but he is not. He is warning that the future value of customers must justify their cost of acquisition.

Maybe the best explanation I have heard comes from Cathie Wood who says that in 2000 the technology was not ripe for prime time and that 20 years later we are benefitting from the work of those pioneers. If I may toot my own horn, we developed an online help system for Mac but it was only years later that online help became a reality. We were at least 10 or 15 years ahead of the times. This is from 1987:

Help Documentation System Review

By Denny Schlesinger, President, Help Software, Inc.

The Importance of Documentation

http://preserve.mactech.com/articles/mactech/Vol.03/03.11/He…

We didn’t get to IPO. I was trying to find a buyer after Apple refused to licence our product. We created online documentation for Excel v 4.0 and sold a few copies. We took part in at least four MacWorld Expos in Boston and San Francisco. It was great fun but not good business.

A graphic demonstration of the difference between 2000 and 2021. 2000 was a real bubble while 2021 is just a very overheated market.

https://invest.kleinnet.com/bmw1/stats35/^IXIC.html

Denny Schlesinger

[epnh]

Cab drivers were day traders.

Back then there was a TV commercial for one of the new breed of discount online brokers (might have been ETrade) that shows a middle-class suburban house with a Bell Jetranger helicopter parked on the front lawn. Inside was a father yelling at his teenage son to stop trading stocks and go take out the trash and do his homework, and by the way, “Get your helicopter off of the front lawn!”. Fade to the announcer saying how easy it was to get rich day-trading using ETrade (or whichever one it was).

Eric [got sucked in to the day-trading craze back then, even learned to fly a helicopter but never could buy one :-(]

[draj]

The run up early this year in the same names that gained 300% last year was a chase by the people that missed out. Had to correct and healthy that it is.

Trying,

I think this quote is the key insight. It says that the Jan-Feb run up was built on unreasonable expectations by folks with little knowledge of the businesses they were buying. Ergo, unsustainable price increases followed by sharp correction. That has the characteristics of a (mini) bubble but in this case it doesn’t change the basic investment rationale nor the underlying fundamentals. Perhaps it will scare some who shouldn’t be speculating in this market.

cheers

draj

ps I remember the late 90s. Money was available for anything to do with the internet. Lots of startups attempting to develop on line applications everyone would use. Mostly these were unproven ideas which didn’t work too well or not at all. Vaporware they were called. It largely came to naught.

[LifeOfDreamer]

And keep in mind that not all of those Dot Com stocks were a bust. Good businesses, that had revenue and had a good plan did emerge including:

• Amazon
• Ebay
• Priceline

---

Cisco CSCO - hit $500b mkt cap, and continued to dominate networking thru today, yet never came close to that mkt cap again. They have done about $50b in revenues/year for a long time. Mkt cap creeping back up near $200b these days, but they have diversified a lot since 2000, of course.

Juniper JNPR - had revenues and would eventually hit near $4b/yr in revenues. Were about $60b mkt cap or so at one point…about $7.5b mkt cap today.

Microsoft MSFT - took 15 years to retrace their 2000 highs. Good company that we all have heard of.

Sometimes multiple compression happens to good companies, too, if valuations get too out of hand.

Dreamer

[luciuse]

I was around at the time as well, and yes companies renamed themselves into “xxxxx.com” and their share price exploded. The internet was new, and a lot of people thought the internet would somehow replace the existing economy, with huge profits to be made. Similar to the cryptocurrency craze that is detached from reality. So these kind of excesses were easy to spot and avoid.

However, I was invested in Cisco and other names with a solid business, dominant in their market - but bid up to valuations they could never grow into. And that is a risk I’m acutely aware of for our favourite cloud stocks as well. Yes, some of them are growing at 100% p.a. and I understand the benefits of SaaS, subscription model, etc. But fact also is that no company can keep growing 100% forever, and I’m not sure that absolute ceiling is always accurately priced in.
Of course it’s never that straight-forward - Zoom for instance may successfully expand into Zoom phone and what have you, each time opening a new revenue stream. But chances are this won’t end in world domination, and the huge price swings after each quarter, when expectations get re-calibrated show how fragile the valuation is.

I think one of the cornerstones of Saul’s investing success is that he ruthlessly watches for signs of a slow-down or deterioration. As long as these companies maintain their high growth rates, I don’t fear a price collapse - but once growth rates start to slow, they can get punished brutally and it’s probably crucial to act quickly in those cases.

[IRdoc]

Cisco CSCO - hit $500b mkt cap, and continued to dominate networking thru today, yet never came close to that mkt cap again. They have done about $50b in revenues/year for a long time. Mkt cap creeping back up near $200b these days, but they have diversified a lot since 2000, of course.

Cisco is a favorite example of a growth stock that is so overvalued that it can’t appreciate any more, but they also stopped growing not long after the turn of the century. They were only growing 10% by 2002 and have basically stopped growing before 2010. Of course, in 1999/2000 they were probably overvalued but if they had continued to grow 40-50% like they were in 1999 it may have been a completely different story.

Should they have ever been valued at 40x sales on 50% growth with 50% gross margins? Without nearly the same level of recurring revenue as most similar companies today? Probably not. But going from 50% to 10% growth within a couple years would put a serious dent in the valuations of current SaaS companies as well, bubble or not.

[mark19601962]

I am not talking about SAAS stocks which are great businesses, but there are some strong similarities.

Right now, the following is happening.

1. home builders are quitting their jobs to trade stocks.
2. 15 year olds are quitting video games to trade options.
3. All that college students ever talk about are stocks.

History does not repeat itself, but it rhymes.

[CrazyCzech]

Late 90s were nuts - a bunch of .com promise land stocks that didn’t even have a solid business plan were driving the market. I remember my b school schoolmates making 30% a day buying stocks premarket that were upgraded that morning and selling them at huge profits later in the day.

But it wasn’t just those loony stocks. There were some very solid companies like Microsoft that were in the same position as many of our companies today. They were relatively new, growing very fast (30-40s instead of 50-80s for our companies today), dominating their respective fields with gross profit margins in the 80s to 90s and stock trading in the high 20s P/S (vs 30-50 for our companies). Mind you, interest rates were in the 5-6% range. At those rates, P/S should be higher.

There was one big difference, though, between Microsoft back then and our companies today. Their business was not recurring with the same level of predictability as our companies. Back then, people would buy one install of MS Windows or Office and it lasted them for many years to come. All of Microsoft’s revenue came from new users and new PC and server sales that needed Microsoft operating system plus SOME software upgrades to new version of their software that had generally pretty long cycles. When the market tanked, sales of all kinds of tech cratered. Less .com startups meant less servers and PCs with Microsoft software. Passing of the magic year 2000 (y2k, remember?) reduced need for new Windows servers that were purchased to fix the Y2K bug of the old mainframe systems. Microsoft’s growth rates went down dramatically, their stock price did as well. They went from growing revenues 40% a year to 10% and the valuation reflected that. It was this deceleration that hurt the stock the most.

I remember a decade ago, everybody wrote off Microsoft as a growth stock until they adopted the SAAS model and cloud which transformed them from a software manufacturer to a one stop solution for everything computing. Bye bye Dell servers and Cisco routers (those companies were hot back then too) and MS software, hello cheap desktop with MS everything in the cloud. This transformation has been the main driver of Microsoft’s revenue since. They are much higher quality revenues AND they, for now are growing faster.

Unless you think that digital transformation is about to stall and our companies stop bringing in new customers and generating incremental revenue from new products, valuation should reflect high growth, high margin and high revenue quality of the companies we own.

Here’s a historical chart of MSFT stock price, growth rates, gross margins and P/S ratios. If you think I’m missing something and/or my analogies are wrong, please say so. I’d love to listen and learn.

https://app.koyfin.com/share/4550aa1b6e

[tecmo]

I was around during the bubble - and this feels similar.

Back then, companies were IPO’ing with just an idea, with no revenue yet, and being valued at huge amounts.

Yes there were some companies that issued IPOs very early in their business, today it is typically done privately but the results are similar - a lot capital being deployed to very early stage businesses which is driving up valuations. The spill over is hitting public markets as well.

I remember a famous analyst of the time, at the level of Mary Meeker (I don’t remember if it was actually her), saying something like: “Sure this company is at 200 times revenue, but it’s undervalued because “comparables” are selling at 400 times revenue!”

Check out Cathie Wood.

During the bubble everyone’s Aunt Tilly, the check-out person at the supermarket, and the cabdriver who picked you up, were talking about investing in Yahoo, and AOL, and the latest company of the week (you get the idea)! Right now, your Aunt Tilly, the check out person, and your Uber driver have most likely never even heard of Cloudflare, or Crowdstrike, or Datadog, or Zscaler, or Twilio, or Okta, and aren’t investing in them.

A friend on FB recently was commenting about their investment in CCIV - a SPAC which at the time didn’t have any real business other than potential future investments (sounds a lot like CIMG back in the day). This person has no investment experience and is taking advice from others on FB. She also asked which crypto was the best to buy…

Look - a lot of great businesses were developed in the late 90s - however look at the investment charts to see how the price of these reacted when valuations reset.

tecmo
…

[draj]

I think one of the cornerstones of Saul’s investing success is that he ruthlessly watches for signs of a slow-down or deterioration. As long as these companies maintain their high growth rates, I don’t fear a price collapse - but once growth rates start to slow, they can get punished brutally and it’s probably crucial to act quickly in those cases.

luciuse,
IMHO the word probably should be deleted for greater precision. Acting quickly is imperative. But the lynchpin is in recognizing signs of a slowdown. I find it challenging, nay , nearly impossible, to look at an optimistic statement in an earnings call r transcript and discern the underlying hint of a slowdown until after it has been identified by someone else… Even when I detect a false note I anchor on the positive past and look for the silver lining. This it seems to me is not a good trait for one who aspires to be a nimble investor. One needs a bit more jaundice in ones view. Skepticism is underrated.

For example in the case of FSLY, AYX and earlier TWLO enthusiastic optimism when properly parsed revealed underlying trends likely to adversely affect prices. Something akin to this appears to be present in the last couple of ZM transcripts. This doesn’t necessarily imply willful deception on anyone’s part but the clues are there nonetheless. And of course interpretation thereof is subject to disagreement.

I suppose when I get to the point of having had 30 years experience in this game like one or another of those who post here I’ll be able to do a bit better.

cheers

draj

[MAS4R]

“Check out Cathie Wood.”

Why? There is nothing in what Wood has been saying that rhymes with your comment.

In fact, Wood is very sensitive to valuations. When I asked them why no DDOG, they said it is a great company but too expensive. ARK owns very little of NET, FSLY, and the like, sold out of CRWD months ago. Wood sold a lot of TSLA, then repurchased, then sold a lot, now is buying back. Ditto for SQ. Ditto for MELI (except for the buying back part). Wood also sold a lot of PINS. She does sell portions of even her highest conviction stocks when she thinks valuations are getting hot.

She also recommended that individual investors keep some cash on hand BEFORE this growth stock crash began.

It is true that Wood wondered if lower real economy growth may justify higher valuations for the stock market as a whole going forward but she never put that as a certainty or as a matter of today. Moreover, Wood has kept pounding that big time money managers “simply won’t allow” another 2000 to happen to THEM. And hence you see the sell-offs that you see in SaaS, quality or not.

When Wood was touting her biotech investments, ARKG was not yet a Reddit stock and the biotechs in question traded at a fraction of what biotechs traded in 1999. Even in Feb 2021, biotechs are trading nowhere at the level they used to back then.

The P/S ratios of Wood’s ETFs are normally half of those of my SaaS ETFs and her ARKQ is dirt cheap. In fact, before Reddit develop a “like” for ARKK it was only a little more expensive than QQQ or XLK.

So don’t join the talking heads attack on Wood if you are not actually familiar with ARK Invest. It is unfortunate that ARKK and ARKG became reddit stocks; not Wood’s fault. I had to relocate more money in my 401k to LRNZ and I bought XNTK to unplug myself from the more speculative holdings in there because of the sudden notoriety.

I also do know that many money managers are drawing convenient parallels to 1999, heck a service from a well-known TMF competitor has been playing the 1999 repeat theme for a while now. The problem is, things won’t repeat conveniently. And said service does not believe that “this is it.” They have a “smart stop loss” provided by one of their affiliate services under one of Wood’s ETFs and they did not honor it after sending emails “trust your loss stops!”. The stop loss should have kicked on Thursday and the price is under it right now yet their service shows “buy” with a stop loss still higher than the current price! Those folks believe that “the huge final gains” before a dramatic crash are still ahead of us. Or maybe they have no idea what to tell subscribers (I paid 50$ on a discount because I like to know how people think; I don’t follow their recs) and trying to figure it out themselves?

So while drawing parallels is fun and all, going to cash has been proven very dangerous. The valuations of the companies discussed on this board are not 2000 level, let alone Japan late 1980s level. If we enter that kind of territory, it will be worth considering options.

SPACs and all sorts of green energy speculations may bring all of growth down, but eventually a line will emerge between leaders with actual products and companies without. The only company discussed here I worry about due to excessive market cap is SNOW which is why it is a small position for me.

[tecmo]

So while drawing parallels is fun and all, going to cash has been proven very dangerous. The valuations of the companies discussed on this board are not 2000 level, let alone Japan late 1980s level. If we enter that kind of territory, it will be worth considering options.

There are other options than “going to cash”. Also; just because “going to cash” has proven to be the wrong decision so far; doesn’t mean it isn’t the right decision going forward. There will always be another recession - which will be a hit on both revenue and valuations - when that happens is anyone’s guess.

Back in the late 90s; many of us (me included!) recongnized the speculative bubble we were in; but we talked ourselves into our investments. We are investing in the ‘picks and shovels’ of the internet - not those crazy dotcoms. Cisco is never going to go bankrupt and will trade at PEs (not PS!) of 100+ because it is going to dominate the internet - and the internet is a once in a 100 year transformation. You can’t compare it to pets.com… etc…

We were all wrong. When valuations reset there are very few places to hide.

This chart really says a lot
https://www.google.com/search?q=CSCO&oq=CSCO&aqs=edg…

I wouldn’t be surprised if Bitcoin (or some of the Saul type stocks) follow a similar pattern. Great companies for sure - but are they great investments?

tecmo
…

[MovedOn]

This is market correction plus sector rotation into value trap stocks.
I think the correction is mostly done at this point. I looked at no revenue SPACs like NIKOLA and Hyliion. Their stock prices are downed 75% from their peak. Pocket bubbles were already bursted.

Sector rotation is still on going but should be done soon in a anohter 15% price change.
Groupon with perennially declining revenue is doulbed in 2 months.
Airline ETF JETS is just 15% below pre-COVID level. Airline is almost zero growth industry so pre-COVID stock price is their normal value.

However, this market corretion is severe and due to my life circumstances: I need to take care of frailing mother and I have just few more years time to invest. I’ve decided to substantially reduce the size of the growth stock portfolio to a size I am comfortable with no matter how much it drops. Now I am mostly selling cash secured put.(30% to 60% ROI) Sorry, no more monthly portfolio updates for now.

I also realized that in the name of maximum ROI, I’ve chased after companies with fast growing revenue but neglected the stability of their busines model. It’s crazy for 2 of the stocks (EXPI, UPST)in my portfolio downed 50% in 2 weeks. My gain since Dec 1, 2020 is almost erased because of this. The peak was up 40% since Dec 1, 2020. Now it’s just up 7%. Yes, I was over confident and bought low quality stocks. They did fine in bull market but their weakness is exposed in market correction. I suspect both EXPI, UPST are super sensitive to interest rate risk therefore the 50% drop. I admit there are something I don’t understand about companies and I should be very careful. (Lesson is avoid financial stocks because they are full of landmines: morgage, lending business etc)

Also, I think 2020 was a one time special year where COVID and acceleration of digitization benefited many tech companies. Many may slow down significantly in coming years. e.g. video games, ecommerce etc… How slow? Maybe 30% per year. Having a high expectation of getting 100% return every year was what burned me out.

Also people were confined at home and lost their job. So more newbie investors were bidding up stock prices last year. What do newbie do? They bought whatever goes up. So this pushed the valuation of growth stocks to insane level for many stocks. Interest rate hike is just a catalyst for profit taking. Most growth stocks are back down to more realistic level by now.

Portfolio:
YTD: -7.71%
Since Dec 1, 2020: 7.42% (This number is not bad!)
Since growth stocks Inception (Dec,2019) 57.81% (Not bad either. 2020 I was in 200 stocks half of the year and in 30 stocks 4 months of year and just 1 month in concnetrated hyper growth stocks. )

Net worth change since growth stocks Inception(Dec,2019)
Percentage change: 54.76%
(I appreciate the result since I quit my job on Nov, 2019. Had I been in dividned stocks, I would have 0% return or negative return in the last year!)

[rtichy]

Well, I think the real question is what was the business performance of AMZN between 1 Mar 1999 and 4 Sept 2001?

Because while a stock chart will show you that “valuations reset”, I don’t know that Amazon was selling less merchandise each quarter during that period. Maybe it was. Maybe I’ll go check that out at the SEC site.

BUT, if you were invested in Amazon and it was unprofitable in 1999, you’d have to be tracking something other than the stock price to stomach the drop from $70 to $7.