Comparative Adjective: The Tale of Dot-Com Bubble (Review)

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Some older people may remember the dot-com [vocab word=bubble]bubble[/vocab] of the 1990s. That was a [vocab word=period]period[/vocab] of very fast [vocab word=growth]growth[/vocab] in the technology [vocab word=sector]sector[/vocab] in the late 1990s and early 2000s. We refer to it as a "bubble" because the growth was not [vocab word=stable]stable[/vocab]. Just like a soap bubble, the stock bubble of the 1990s was [vocab word=fragile]fragile[/vocab]; it could [vocab word=burst]burst[/vocab] at any time, but very few people believed it would.

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In the early 1990s, the internet was a new and exciting thing. Before the internet, people had to read newspapers or magazines to find information. With the internet, people could look up the latest news online, read magazine [vocab word=article]articles[/vocab] for free, and find out the weather for tomorrow when they wanted to. People could buy things on the internet without going to a store. People could [vocab word=share]share[/vocab] their [vocab word=opinion]opinions[/vocab] without writing to a newspaper or [vocab word=appear]appearing[/vocab] on television. As people found out the convenience of the internet, the number of [vocab word=household]households[/vocab] with internet [vocab word=access]access[/vocab] became larger and larger. [vocab word=investor]Investors[/vocab] saw [vocab word=opportunity]opportunities[/vocab] in this latest technology [vocab word=trend]trend[/vocab] and poured money into many kinds of internet companies: companies that made websites, companies that sold things online, and companies that provided internet connections.

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The amount of investment in the technology sector became more and more in the late 1990s. By 1999, the dot-com bubble was in full swing. In 1999, the [vocab word=stock]stock[/vocab] price of Qualcomm, a maker of semiconductors and software, [vocab word=rise]rose[/vocab] by more than 2600%. The higher the stock price of internet companies became, the [vocab word=greedy]greedier[/vocab] people got. Investors, both small and large, looked for any companies with a ".com" name in order to make a [vocab word=quick]quick[/vocab] [vocab word=profit]profit[/vocab]. Many people quit their jobs and became full-time investors. Some internet companies without any profit were able to get millions of dollars of [vocab word=investment]investment[/vocab].

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Of course, companies without any profits shouldn't have much [vocab word=value]value[/vocab] even if they have had a lot of investment. The higher the stock prices got, the higher the chance of [vocab word=correction]correction[/vocab] became. Many [vocab word=executive]executives[/vocab] saw this and started to sell their stocks in the early 2000s. Many people also started to question the value of investing in internet companies. The bubble was ready to burst. In the week of April 10th, 2000, the Nasdaq Composite index fell by 25%. The stock prices of most internet companies became lower and lower. By the end of that year, many companies had lost more than 75% of their stock price.

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Some people made a lot of money during the dot-com bubble. At the same time, many people lost their life savings. Even though many companies died when the bubble burst, some companies [vocab word=survive]survived[/vocab] and have become some of the best companies today. Such companies include Amazon and Google. The dot-com bubble teaches us many lessons about investment. Every serious investor should keep the tale of dot-com bubble in mind when he or she is investing in the stock market. Reference: 1. "Bleak Friday on Wall Street". CNN. April 14, 2000. https://money.cnn.com/2000/04/14/markets/markets_newyork/ 2. "THE YEAR IN THE MARKETS; 1999: Extraordinary Winners and More Losers". Norris Floyd. January 3, 2000. https://www.nytimes.com/2000/01/03/business/the-year-in-the-markets-1999-extraordinary-winners-and-more-losers.html