Item — HN Reader

The internet absolutely went bust. That’s what the dotcom crash was.

Same with a lot of physical infrastructure. The UK has a robust railroad network today, but it was built during a bubble that was so insane people would take loans from banks to invest in railroad stocks.

2 comments

> The internet absolutely went bust

How does it matter to you? If you had invested in Internet broadly, you would have been WAY better off in the long term. Meaning: your strategy had been to keep investments tied to Internet first companies, you would have done better than pretty much any other person.

Things go up and down but broadly internet went up.

Unless the investment was into worthless paper from those companies, tied to pension funds and similar.

The strategy should be to put money into AI broadly and not necessarily tie to a certain company -- something pension companies already know.

So evidence that internet was a bubble is wrong, it in fact shows that pensions did the right thing by putting money in the internet.

Since you couldn't "put money in the internet", you had to choose some actual companies. Your results varied by which company you chose, and when you invested. (This is always the case, obviously) Sun Microsystems? Let's say you bought the dip at the end of May 2000, at $150. It's ending price when it was bought by Oracle in 2010 was $9.50. [1] Suppose you bought Cisco at the same time for $37.30. You would have waited 18 years, until Aug 2018 for it to reach the same height. Now it's at $127, which over 26 years is an annualized return of 5%. It would have only taken 14 years to break even with Microsoft.

Now, if you had put your money in those stocks 12 months later, you would do okay (except for Sun). So, no, those pensions did not do the right thing by buying at the peak of a bubble. At least, not for people like me who don't like 15 years of negative returns.

[1] https://companiesmarketcap.com/sun-microsystems/stock-price-...

[2] https://companiesmarketcap.com/cisco/stock-price-history/

> Since you couldn't "put money in the internet", you had to choose some actual companies

Why not NASDAQ?

Do I need to dig out newspaper articles from around 2003 - 2008?

How do you suppose those would prove your point?

Now we just take loans to purchase the train tickets.