The Consequences of Stock Bubbles

Sep 2020

Importantly, when a company’s stock price becomes incredibly high and ultimately collapses, the company itself might continue to exist and even grow its operational results.  For example, Cisco Systems was a leading dotcom bubble stock in the late 1990s, and it still exists today.  However, Cisco’s stock price is about 45% lower today than it was in early 2000, over 20 years ago.  Ouch!  When you start with an exorbitant stock price, there are not a lot of good things that can happen. … We don’t want to see investors who are caught up in a bubble lose their money; however, somebody’s going to be left holding the bag when this tech stock bubble ends.  They’re likely to lose money—perhaps a lot of it.