Thursday, November 18, 2010

Reposted BUGnotes (year-end 1999, ahead of the tech-crash)

It is a great mistake to think that what goes down must come back up.

Gerald Loeb, The Battle for Investment Survival, originally published 1935

The following are four re-posted BUGnotes, I originally published to at the end of 1999. I've been reviewing the material for a related work and I think they're worth looking at today (fresh!). BUGnotes ran from late 1999 to early 2001 and were edited by, and the more fantastic material co-written by, Jay Jurisich.

The end of 1999 is a fascinating period for studying markets. Following an amazing decade for Technology stocks and highlighted by Y2k hype and uncertainties, the week closely precedes the all-time Nasdaq high of 5048.62, ultimately achieved on March 10, 2000 (gives me goose bumps still to write that today).

Commerce One
, mentioned a couple of times, is a company which rallied 1,000% in 1999, would ultimately peak March 9th, 2000 at $331 1/2 a share, crash to $136 by the end of that month (-60% in 3-weeks!), and ultimately go-out a zero - de-listed from the Nasdaq in 2004.

BUG notes
December 28, 1999


This Nasdaq looks determined to blow through the 4000 psychological barrier today. A plethora of put options in the last two days suggests that investors are hedging themselves going into Y2K, another sign that Apocalypse 2000 will probably be a non-event, though I for one don't plan on getting within a hundred miles of an electric razor on New Year's Eve. What may surprise some people is that the market will have trouble rallying substantially once the Y2K fears do not come to fruition. The leading stocks such as Commerce One and Qualcomm continue to blowoff here. It is typical that the year's strongest stocks run big in December.The first week of a new year though, we have discussed, is a different story.

My team that has been readying the Y2K ChronoPod up and blewoff in the middle of the night, leaving me to go it alone out here in the Nevada desert, deep underground beneath the MarketBUG Airstream trailer. Seems they had some qualms about just what havoc BUG may wreak if unleashed on the far-flung future or, even worse, the posthumous past. So I will assure you all as I assured my team with the Christmas fortune cookies I bestowed on them for all their hard work: I hereby swear to try not to change the course of history, or the fabric of destiny.

BUG notes
December 29, 1999

Retro Specter

The NASDAQ hit a new high interday yesterday, but the average stock on the NYSE is 20% off it's highs. The market must grapple with all the similarities of 1972 next year. In the early seventies the Nifty Fifty powered to ridiculous multiples, while the majority of stocks drifted lower. Also, margin debt and speculation went out of control. Sound familiar? The bear market that ensued in 1973 was the worst since the great depression. Happy New Year!

BUG notes
December 30, 1999


Laid-up here on the last market days of the millennium with a wrench in my works, a soda cracker in my coffee, and grease on my elbows. This year was very good, but it will ruin the novice investor. I know what they are thinking: All I have to do is buy Technology shares to get rich! Sorry, but it is not always so simple. In fact, the top sector one decade has typically been the goat of the next. And never has a sector been as rewarding as Technology in the 1990's. Energy in the 70's and Healthcare in the 80's were not even close. So what will be the leading sector in the next decade? Sorry again. Your humble narrator does not have such answers - not yet.

The sweet pigeons fly like chowder from my filigreed brow, arcing through the dry desert night like the backwards meteors they are, looking for a Time to call home. Having been in all Times, or being about to visit them in my Y2K Pod, I can understand the clamoring for stasis. But then, I'm on a mission, now on the eve of another in a long string of millenniums. Souls and stocks, spirits and securities, mutual love and mutual funds. Pass the doochie Dutch, and let's hitch a ride on the Great Crutch to the Crux of Time, ye Mimes of Marmalade and Fire. It's a swell Y2K Party out there in those Roaring 20's, those Fin de Siecle tassels of pasties and a sordid pastry. Have a peek at all the latest Y2K snafus, from almost 200 countries, at the website.

Oh, and enjoy the future - it's a doozy!

BUG notes
December 31, 1999

New Fear's Happy

Whatever Y2K Disasters that may be unfolding somewhere out in the Southwest Pacific or Eastern Antarctica as you read this are echoed here on the walls of my Y2K Chronopod as I ready myself and our collective BUG Project for the Unforeseeable Past and Predetermined Future. Rome was built in a day, a little know fact they don't want you to believe. But I believe, dearest accomplice, and I invite you to join me. Together we will join hands across the vast desert of Time and link our market fevers to the Great Mother. I know you think I am insane, don't think I can't hear your stage whispers, and in that I couldn't agree with you more. But these are insane times. Who among us market professionals can remain of sound mind while Commerce One et al makes mince meat of all the cherished old beliefs we learned back in school? You remember school, don't you my fellow aching soul? The smell and sound of the mimeograph machine in the teacher's offices churning out lesson plans, 16mm films about the Human Reproductive System or Blood Asphalt in driver's training class. Or my personal favorite: film strips - remember those, oh greedy early adopters of all things High Tech?

Starting tomorrow you'll never write the numbers "19" before the present year again when you scratch out the date on one of the innumerable forms you are forever filling out. Are you quite ready to face the enormity of that fact? I of course have been dealing with this already for thousands of years, traveling through Time as I do, so I've had to learn to adapt, as I am sure you all will learn too. But it is a handicap you will never in the rest of your days fully overcome, while the kids born after today will never have to write that dreaded "19," not even for their birth dates, which is why they already have an advantage over us. So get ready, folks, for the Future. It's nothing you haven't seen before, only the smells have changed. And your greatest competition in the business world is not the Carly Fiorinas and Jeff Bezoses out there with their gun scopes trained on your bottom lines. No, your greatest competition is swimming around frantically in your pampered scrotums and ovaries, dear breeders, already jockeying for position in the world you are readying for them. Your best survival strategy for the epoch eclipse to come? Keep renewing your MarketBUG subscriptions - I'll keep you informed about the Future, just as it gets here, when you most need to know about it. Remember BUG, and just say "I'M FIT to be tied!" - Insane Minds For Insane Times!

I love you all, ye denizens of Millennium Two! See you around the Watercooler Three Thousand some time.

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