The Fear Bubble

From The New York Times - Brad Stone and Matt Richtel write today on the front page of The Times about the surging values of Internet companies, a trend that evokes the madness of the late 1990s. The values might be mad, but this is a very different world now.

This is a bubble inflated by fear. The last one exploded from greed.

In 1995, people woke up, saw the Netscape browser, said, “This is going to change everything,” and started the world’s biggest land grab. They raised billions of dollars for grand schemes to reinvent entire industries — Webvan, VerticalNet, Homestore, and so on. Meanwhile, hoping to cash in on the revolution, investors bid up the prices of the flimsiest shells of companies to astronomical levels. | Read full article