Wall Street's Oldest Newsletter Covering Internet Stocks
It would trade to $500, before going to $100,000.
In two years Amazon was decimated and traded from around $113 (December 1999) to $5.00 (October 2001) - before turning around and running to over $1,000 (similar to a $100,000 target on Bitcoin). We're guessing few investors would be able to withstand this type of volatility, if Bitcoin undergoes a similar type correction.
This isn't conjecture, it's facts and history. And the fall wasn't in a day, relieving investors of the decision to hold or not during the correction.
The fall from grace to disgrace, was nearly two years of water torture - that sucked in bargain hunters who were 'too smart' to buy at $113 and who instead waited for a correction. They bought or averaged down along the way to $70 (would you buy Bitcoin if it fell back to $7000?) and at $35 and at $20 (would you buy at $2,0000) - until nearly everyone dumped at $5.00 (think Bitcoin at $500) afraid it was all just a big scam and headed to zero.
And while Amazon went on to greatness, many other high profile names did not.
Being in the midst of this while running both the Internet Stock Review (it survived and flourished) and Incubator Stock Review (it died a horrible death) we were knee deep in the "do we buy more as the correction ensued, or do we sell" quandary. And we saw all sorts of real-world reactions to the unthinkable pain and loss, from both institutional and retail investors.
In dollars and sense (real sense), this is the equivalent of an investment falling from $11,000 to $500, or for larger investors from $110,000 to $5,000 or for larger even and luckier institutional investors who invested in the summer of 2016 - watching their $5 million investment grow to $110 million and then back to $5 million.
Amazon, a Wall Street darling at the time in the late 90's like Bitcoin is today and up 70 fold in two years - was also a real world 'how do you like that' correction and shakeout.
We'd like call it a lesson, but that type of devastation and wealth destruction should never be called a lesson. Even the "I told you so" naysayers, kept relatively quite and refrained from gloating in 2002.
In the real world, when your starring in the face of losing more than 80% of your investment (if you bought at $11,000) or losing 100% of your earlier profits - along with all the things you were planning on buying with the profits (yacht, two vacation villas), supreme confidence and conviction have a funny way of turning into zero confidence and even panic.
In the dotcom days we had Henry Blodgett (who's made a huge comeback with Business Insider - good for him), Alberto Villar who ran the Amerindo Technology Fund (ended up in jail), Bill Gross from IdeaLab an Incubator, David Wetherell from CMGI an incubator and even Stephan Paternot who ran the Globe.
The Globe posted the largest first-day gain of any IPO up to that date, with shares closing up 606% from their starting price (sound familiar). It later fell from $97 to under $0.10.
Investors hung on their every word, as they talked about how the Internet was going to change the World (which it did) to the press and as featured speakers at Conferences.
While what transpired wasn't his fault (CMGI which traded from near $1.00 where we found it to $300 and then back to $0.28, Wetherell wasn't speaking at too many conferences in 2002.
Today we have Winkelvoss twins, Tim Draper, Thomas Lee, Lou Kerner, Michael Novogratz, Mark Yusko and dozens more talking about how the Blockchain is going to change the World (which it will) to the press and as featured speakers at Conferences.
And investors are hanging on their every word. "Did you hear Kerner, he just said, blockchain is the biggest thing to happen in the history of mankind."
Of course, we'll be launching a Bitcoin Review. Just not sure when. In the meantime we're finding our bubbly by investing in bubbly (and Spirits and Wine) via the Beverage Start Up News and the Beverage Stock Review and of course with the Internet Stock Review which we launched in 1998.
Launched in 2015, the Beverage Review had fun with the #1 performing Beverage stock, New Age Beverages ($NBEV) which traded from $0.31 to $7.20 and Celsius Holdings ($CELH) which traded from $0.99 to $7.00.
And if micro-caps aren't your game. Big money can be made in large caps - look no further than Constellation Brands (STZ) which has moved $12 in 2008 to $218 recently, which we feel relatively confident won't fall back to $12. Plus you can drink SVEDKA, Blackstone and Corona - but you can't drink bitcoin.