In early January 2000, Zhao Hong and Xiao Wanting took their three children on a plane to SF City.

From '99 to the beginning of 2000, the Fed accelerated 6 times in a row. Finally, on January 10, 2000, the NASDAQ was getting closer and closer to 5,000 points, nearly doubling the price of the index in a year. Of course, at this time, most analysts in the market still believe that it is just a healthy adjustment, and this reflection is consistent with the subsequent peak of 6,000 points in A-shares. From a financial behavioral point of view, no one can predict the top, which in itself is a normal reflection. It is also worth noting that since 2000 there has been a significant divergence between large and small markets. That is, the Nasdaq index is rising, while the Dow Jones has fallen during the same period.

Interestingly, when the dot-com bubble was about to peak, Warren Buffett made a self-criticism in a newspaper for investors: "My only homework is capital allocation, and in 1999 I got a 'D' in this homework." Berkshire Hathaway's net profit plummeted to $1.56 billion in 1999 from $2.8 billion last year, largely due to the poor performance of its heavyweights: Dairy Queen, Geico Insurance, Coca-Cola, Disney and American Express. These stocks performed in 1999 as "disgusting", and they are falling in the 100% era when tech stocks are soaring. ”

What really led to the bursting of the Nasdaq bubble was the upcoming US court's decision on Microsoft's monopoly. Microsoft was the leading stock in the NASDAQ at that time, and Microsoft, as a computer operation software, was also the leader in that wave of Internet revolution. And now although people have expected this matter, but people have not paid attention to its blow to the entire network company, if there is no monopoly, the competitive advantage of the network company will be greatly reduced, which will also have a huge impact on many related enterprises, if a certain monopoly is removed, the network company will inevitably go down the altar, become an ordinary company, of course, the growth is still very good, but only relative to the traditional enterprise, relative to its own hundreds of times, Thousands of times P/E ratios, and even many loss-making Internet companies, it is unknown when they will be able to recoup their investments!

But it's still the beginning of the year 2000, and everyone is still immersed in the fairy tale of crazy high-growth high-tech companies. Everyone believes that there are countless imaginable possibilities for high-tech companies as long as you want to, and the most representative of them is the Internet company. With the release of the 1999 annual report, the growth of traditional companies is still sluggish, and even declining, while the growth rate of high-tech companies is still very high! According to some experts, after a few years, it will become extremely cheap! What they do not say is whether those companies will still exist after a few years? Is this intentional or deliberate? I don't know!

Not to mention ordinary people, even Xiao Wanting was a little hesitant, watching the market value of stocks slowly growing, listening to the topic discussions of many experts, even if she knew that country M was currently tightening liquidity, and the cost of capital was getting higher and higher!

But thanks to the fact that she has always believed in Zhao Hong a little blindly, especially after the last operation. also let her know that there is a huge difference between herself and Zhao Hong in some aspects, if there is no success of Zhao Hong, she is just an ordinary senior white-collar worker with a certain ability, at most she is lucky to become a shareholder of a small company, as for whether the shares can be obtained in the end is still a problem!

At this time, the price of SF city is also high and scary, especially the price of property, in recent years, the new millionaires, multimillionaires, and even billionaires have realized some of them after struggling, and some of them have realized all of them, many of them have begun to pursue enjoyment, along with the sharp rise in housing prices, especially in the Chinese villa community, once the Chinese have money, the favorite is to have their own house, and have their own house to have their own home! And many of them are purchased in full, which is the people who have just come from the mainland, and they are not used to taking out loans, and the loans they buy are those in Gangcheng or Wanwan. It turns out that loans are really not a good thing! because they ......

On the way home, the sea and the creek are also very eager, they haven't seen their grandparents for many days, after all, this is the relatives who have been growing up with them, and whoever raised them is indeed very reasonable.

And Xiao Wanting was also a little eager, got off the plane and left the airport, Zhao Hong hugged his little son, followed Xiao Wanting and their steps closely, the three of them walked quite tacitly, he had to admit that he didn't need to exercise a little, panting, so that they followed them into the taxi and they smiled very happily.

Along the way, they all looked a little eager to wear, only Zhao Hong had been leisurely looking at the scenery outside the window.

The winter in sf city may not be too cold, but what is very annoying is that there is often rain, this is the standard Mediterranean climate, thanks to the fact that he is from the cold T city, he wears relatively thick, and it is not the first time he has come to sf city, but that's it, he is still a little uncomfortable!

"Today, the merger and acquisition of AOL (M Country Online) and Time Warner, a well-known network service provider, has been finalized. On January 10, 2000, this merger was the second largest in the world......

Stock market news came out of the taxi radio, but Zhao Hong knew that this was a very unsuccessful acquisition, and one plus one was not always greater than two. After that, there is the famous orldCom performance fraud. The company also eventually became the third largest bankrupt company in the history of country M. Other major companies in financial fraud include NorthPoint Communication, Global Crosing, JDSU, XO Communications and Covad Communications. It was found that there are a large number of fiber optic companies (JDSU, etc.). The collapse of these companies has also dragged down network services companies like Cisco. Like the butterfly effect, good companies fall one after another.

Why is this so? Actually, it is very simple, because the direction of public opinion is always manipulated by some people, because the state also represents their interests. In fact, the stock market bubble burst began at the end of 1999, and the boom in online stocks overshadowed much of the stagnation of the real economy and even regressed to the point where many people did not notice it in the early 2000s.

In fact, there are always many people who have begun to discover this law and quietly retreat in advance, Zhao Song Group is just one of the inconspicuous ones, but who will say more?

The bursting of the bubble this time is not only a disaster, but also a huge opportunity, just to seize the opportunity, of course, the first thing is to survive. According to the most popular advertising slogan in later generations, it is "wash is healthier"!

The bubble crash will last for two and a half years, and the Nasdaq will fall 78% from 5,046 to 1,114. In 1999, there were 457 IPOs in the United States, most of which were related to Internet technology stocks, and 117 of them doubled their shares on the day they went public.

People who have experienced the NASDAQ bubble. There are a few things that stand out in my memory:

1) The hype of country M is not lost to the domestic at all. Amazon in 1999 was able to almost double every month. Although it became a truly great company, the market was not afraid of this unprofitable company at all. In fact, at that time, the market valued Amazon as an acquisition value, and the company in the secondary market was seen from the perspective of the primary market.

2) As with any bubble bursting process, good companies face mud and sand. The most famous ones are a certain wave, a certain network and a certain fox, and the stock price has fallen below $1. Someone once bought a certain network at that time, and the stock price rose 40 times in a few months, digging a second pot of gold. And Amazon, the super leader of the mobile Internet, Priceline's stock price will fall by more than 90% in the future, and then rise 100-1000 times (yes, Priceline's stock price once fell to $1, and then rose 1000 times!). This is very similar to the global bear market in the future, every wave of the bear market is an opportunity for everyone to make a fortune, the key is to be patient enough.

3) When the stock market goes to a bubble, even the best companies will fall. It's the same as when the stock market bubbles up, even the worst companies can rise. Looking back, a certain wave in China was the largest portal at that time, and it was able to fall below 1 yuan. What a great company Amazon is, and the market's expectation is that this company is about to go out of business.

What will the world look like after the bubble? Will the once hopeful companies disappoint ten years later? Zhao Hong once saw some interesting statistics in an article: in 1999, there were 119 companies with dot com in their names, and in 2012 there were only 18. The market has shifted from the Internet to the mobile Internet, the dividend ratio has risen sharply, Nasdaq growth stocks have become dividend value stocks, and most importantly, the price-to-earnings ratio has fallen sharply from 78 times to 23 times.

In summary, tighter liquidity and under-expected results were the drivers behind the bursting of the Nasdaq bubble. In fact, it is also the driving force behind the bursting of any bubble, and no one can predict the top, just as no one predicts which cloud will rain tomorrow.

Of course, the bubble will also give birth to great companies, but these great companies will give everyone a very cheap price to buy when they double kill. For value investors, de-bubble is their best friend.

This is also the reason why Zhao Hong did not dare to celebrate the Chinese New Year in China and had to come here, no one believed that the now thriving Nasdaq market would fall into a capital disaster in two months.

And whether Xiao Wanting will be able to give up her reluctance and obey the arrangement to withdraw from the market, he is not sure. Only by personally sitting in charge and supervising the handling of all stocks and projects, can the company finally be safe!