by Omnitir » Tue 03 Oct 2006, 11:14:27
$this->bbcode_second_pass_quote('DantesPeak', ' ')I had a prior carreer on Wall Street. In 2000, there were actually many voices on Wall Street that said the internet stock bubble would lead to great investment losses. Those views were called minority or fringe views, and were frequently scourned "as the sky is falling" lunies in the popular media. Those silly lunies turned out to be absolutely correct.
Even though I personally tried to tell many to adjust their investments, and preserve their money, common opinion prevailed and I was ignored.
The Dotcom crash could serve as a prudent metaphor for the PO movement. Prior to the crash there was the camp that saw it coming, while the majority rejected arguments that the party is almost over. Some in this sky is falling crowd took their predictions a bit too far, warning of a collapse so severe that the technology sector may take decades to recover. Even though these predictions where of a small minority of those predicting a stock crash, their voices were perhaps the loudest. Most investors would dismiss any notion of an end to the internet bubble (those that heard the message that is) simply because they associated the over the top sky is falling loonies with any suggestion of a downturn in the sector – regardless of actual market indicators suggesting the party could indeed be coming to an end.
And so many investors suffered considerable losses, largely because they turned away from prudent advice, perhaps because of the over the top alarmist warnings (but then, perhaps it was simply greed…). And yet here we are a little over half a decade later, and indeed the over the top warnings were way off mark. Sure the boom and bust cycle that some predicted played out like clockwork, but the crash was indeed strictly a capital markets phenomenon. There was no crash evident in the actual B2C and B2B revenue data (that is, the activity the stocks were based on). The actual revenues in the B2B sector grew smoothly from $56 billion in 1999 to $486 billion in 2002 and has now passed $1 trillion. And obviously there is no evidence of boom and bust cycles in the actual price-performance of these technologies (Moore’s Law steadily continues).
So while the majority of those that warned of a stock crash were rational, a small minority (soon to grow once the bubble had clearly burst) warned of industry wide ramifications. Some even went as far as claiming the Dotcom crash would result in the collapse of Moore’s Law (!). It could be argued that these same warnings are at least partially responsible for so many investors loosing out in the crash. If the warnings had just been more rational, maybe Wall Street may be taken the warnings more seriously and been more prepared?
This analogy, though perhaps flawed, should be obvious as to it’s relationship with PO. It’s the over the top alarmist view points, warning that the sky is falling and we are all doomed, that causes the majority of people out there to bunk PO into the loony bin. Admittedly some people seem to need to be shocked into awareness, but IMO far more people simply turn off to an important message simply because it looks like so many of the other ridiculous doomsday stuff out there.
And just like the Dotcom crash, perhaps the truth is the outcome of PO won’t be as devastating in the long term as many warn?
"Mother Nature is a psychopathic bitch, and she is out to get you. You have to adapt, change or die." - Tihamer Toth-Fejel, nanotech researcher/engineer.