Frenzy: Bubbles, Busts, and How to Come Out Ahead

220 Pages·2004·0.94 MB·English

by  Carl Haacke

FRENZY
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FRENZY
BUBBLES, BUSTS, AND
HOW TO COME OUT AHEAD
CARL HAACKE
FRENZY
Copyright © Carl Haacke, 2004.
All rights reserved. No part of this book may be used or reproduced in any
manner whatsoever without written permission except in the case of brief
quotations embodied in critical articles or reviews.
First published 2004 by
PALGRAVE MACMILLAN™
175 Fifth Avenue, New York, N.Y. 10010 and
Houndmills, Basingstoke, Hampshire, England RG21 6XS.
Companies and representatives throughout the world.
PALGRAVE MACMILLAN is the global academic imprint of the Palgrave
Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan
Ltd. Macmillan® is a registered trademark in the United States, United
Kingdom and other countries. Palgrave is a registered trademark in the
European Union and other countries.
ISBN 1-4039-6131-X
Library of Congress Cataloging-in-Publication Data
Haacke, Carl.
Frenzy : bubbles, busts and how to come out ahead / by Carl Haacke.
p. cm.
Includes bibliographical references and index.
ISBN 1–4039–6131-X
1. Speculation. 2. Stocks—Prices. 3. Investment analysis.
4. Financial crises—History. 5. Internet industry—Finance. I. Title.
HG6015.H28 2004
332.6—dc22
200404470
A catalogue record for this book is available from the British Library.
Design by Letra Libre, Inc.
First edition: December 2004
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
Dedicated to Anna, Matthew and Evan
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CONTENTS
Acknowledgments ix
Introduction 1
1. Perceptions (Seeing is Believing) 9
2. Competitive Cascade 63
3. Follow the Money 113
4. Reality Returns 129
5. We’ve Been There Before 147
6. Managing the Bubble Bath Ahead 169
Notes 185
Bibliography 199
Index 205
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ACKNOWLEDGEMENTS
THIS BOOK HAS BEEN AN INCREDIBLE OPPORTUNITYand experience to talk
with some of the greatest business leaders about one of the most re-
markable periods in business history, how it relates to past bubbles, and
what lessons can be learned for the future.
As a result, this book simply would not have been possible without
the help of nearly 100 people, many of whom took time out of their busy
schedules to talk with me in great detail for hours and at times over many
conversations. This entire book is a reflection of my gratitude to the se-
riousness of purpose and honesty with which each of these individuals
approached our discussions. Others provided detailed and extremely
helpful comments on the text and helped hone some ideas that are pre-
sented. I would like to thank Kurt Abrahamson, Michael Armstrong,
William Baumol, Scott Bertetti, Tom Bingham, Peter Bisson, John
Bogle, Don Cassidy, Robert Clauser, Evan Cohen, David Collis, John
Conner, Mark Cuban, Andrew D’Ambrosio, Maziar Delaeli, Gene
DeRose, Dave Dorman, Steve Dow, Bill Draper, Tim Draper, Barry
Eggars, Stuart Ellman, Dan Estabrook, Bob Feldman, Alan Fields, Steve
Friedman, Tom Flynn, John Fontana, Aram Fuchs, Fred Giudfredda,
Fred Gluck, Josh Grotstein, John Koskinen, Mark Hagan, Bill Ham-
brecht, Paul Harrington, Bill Janeway, Paul Johnson, John Jones, Terrel
Jones, Bob Kagle, Habib Kairuz, Craig Kanarick, Will Lansing, Bob
Latta, Al Leach, Steven Leslie, Jim Lesserson, Roger McNamee, Roger
Meznick, Mark Moradian, Mike Moritz, Chip Morris, Tim Mulony,
Martin Neisenholz, Evan Neufield, Dan Nordstromm, Terry Odean,
Andrew Odlyzko, Alan Patricof, Michele Peluso, Stephen Penmen, Tom