“What would I do? I’d shut it down and give the money back to shareholders.” Who uttered those words? It was Michael Dell. He was talking about Apple in 1997. By 2000, Apple was alive after nearly going bankrupt in ‘97, but as evidenced by it nearly going under (Bill Gates saved it) not too many years before, there was a “trust, but verify” quality to its shares. Put another way, returns since 2000 are loud indicators of how little faith investors initially had in the plans of Steve Jobs. Facebook? The social media giant didn’t yet exist. Mark Zuckerberg was still a student at Phillips Exeter.
So, what’s the point of listing Microsoft, Amazon, Google, Apple, and Facebook? Nonexistent, lightly regarded, or seen as past their prime in 2000, these companies are now the five most-valuable corporations in the world in 2021. How things change! DVDs, it was known as “Amazon.org” given its inability to turn a profit. Shareholders were mostly ridiculed for owning its shares since, well, you know, well-overdone optimism about the Internet retailer was already priced. yesterday concepts, never concepts, or that literally didn’t exist. In 2000, Microsoft (MSFT) was still highly valued, but it was on the verge of a largely lost 10 to 15 years. Having been late (or never arrived) to the Internet, along with search, social media, and smartphones, investors had lost much of their former excitement for the Redmond, Washington software giant. This showed up in its stock price. It was mostly flat from 2000 right up through 2013. Amazon? A peddler of books, CDs, and Google? It was largely unknown. While by 2006 it had grown fast enough that it was neck-and-neck with Myspace (remember that?) for daily visits, the users of it were much rarer in 2000. In 2000, it was still private, with good reason.
FAANG STOCKS AND DEFANGED BANKS
So, what’s the point of listing Microsoft, Amazon, Google, Apple, and Facebook? Nonexistent, lightly regarded, or seen as past their prime in 2000, these companies are now the five most-valuable corporations in the world in 2021. How things change! Looked at through the prism of the Federal Reserve, central banks have been trying (blessedly without success) to rewrite market realities for as long as they’ve existed. While the Bank of Japan (“BOJ”) went to “zero” in 1999 without market or economic consequence, the Fed tried to mimic the BOJ’s laughable stab at the impossibility that was “easy money” in the early 2000s. The good news is that it failed, much as the BOJ did. How we know this is because what mattered in 2000 soon enough did not... While
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October 2021
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