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Allan Harris
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After practicing law for way too long, I moved my family to the beach (Kiawah Island, South Carolina) to trade stocks for a living. After making and blowing a fortune in the technology bubble of the 1990's (and then again in 2006-08), I discovered the art and science of trend following. In... More
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  • History Of The Internet, Part II 0 comments
    Oct 14, 2012 12:39 PM | about stocks: YHOO

    Yahoo is currently trading at about it's September 1998 price level. That's over 14 years of dead money.

    (click to enlarge)

    But wait, it's worse. From September, 1998 the stock price rose to $125 in 18 months, making a paper fortune ("paper," how ironic) and ballooning a lot of stock-traders' egos. Six months later, in September of 2000, YHOO is back below $15....then below $10 (March, 2001) and finally, hit a low of $4.01 in Sept. 2001.

    The rally from 2003-2006 made YAHOO another ten-bagger, reaching just under $40 in January, 2006. Then came the 2007-08 bear market which pulled the wind out of Yahoo's stock price again, taking it down under $10 by November, 2008.

    Although the Internet has become the greatest global financial force in over a century, Yahoo's monthly chart above illustrates that stock price has only a fleeting and unreliable relation to business prospects, not just for Yahoo and the Internet, but for all stocks, sectors and new paradigms-of-the-day.

    When it comes to making money in the stock market, the only arbiter of price appreciation (or depreciation) is price. Everything else is just noise.

    Themes: Investing Ideas, Macro View Stocks: YHOO
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