2007-10-19 07:24:42 · 15 answers · asked by Anonymous in Business & Finance ➔ Investing
There is a simple explanation to this. The Y2K bug scared people and corporations to make specific upgrades to try to resolve the issue. In most cases they were over spending and that fueled the Clinton Economy. Now with all that money running around many manufactures took advantage and sold products for the worst case that never happened. It weems that with the chance of the end of the world at hand, some people feel the need to hold on to money as being a less of a priority. Now after the KrAzY spending just about everyone had a new computer and would not need another for 4 years. So the three years after Y2k people didn’t spend as much on Technology.
Also at this time the Internet was changing. For the most part same venture capitalist ran website for services on the Net. The whole sale market place was just being established. Once that was in place we had what they called the falloff the DOTCOMS. Billions of dollars had been invested in this small Internet companies and one by one they failed as the services they once provided fell back onto Corporate America.
Post Y2K the upgrade cycle has been bunched up and we will always have a 3 year cycle in the technology market. The great news is that we are on our 2nd up cycle now so it is a great time to buy tech stocks such as Dell and HP.
2007-10-19 07:35:14 · answer #1 · answered by Twigits 3 · 1⤊ 2⤋
The Federal Reserve increased interest rates to avoid inflation. When interest rates go up, bonds look more attractive than stocks. This caused investors to finally sell their stocks in internet companies that had become overpriced in the bull market of the 90's.
The stock market recovered rather quickly after the 9/11 drop with the exception of a few sectors such as airlines.
2007-10-19 07:45:46 · answer #2 · answered by MaytagRepairman 2 · 2⤊ 0⤋
Twigits, is partly correct, the others are just speculation, the real cause was product cycles had come to an end, 4 major product cycles that all had reached their limits. It's all supply and demand. Once your market is oversaturated there is no more demand for your goods, you need to come up with a new mousetrap or go belly up. They have since learned from their mistakes and these industries are once again on top. Without going into too much detail that is what really happened.
2007-10-19 08:46:35 · answer #3 · answered by Anonymous · 0⤊ 0⤋
A combination of things...
A recession hit early in 2000.
Overvalued net stocks came back down to reality. Net companies that would never make a cent folded....
And 9-11 topped it off.
2007-10-19 09:40:15 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The .com bubble burst and 9-11 with all the airlines getting into trouble and companies like Enron that went under causing their stocks to become worthless instantly.
Anyone who blames the President is ignorant.
2007-10-19 07:29:05 · answer #5 · answered by Anonymous · 2⤊ 1⤋
The Markets cam back down to earth after many tech / dotcom stocks with no revenue models ran out of investor cash and folded.
2007-10-19 07:28:19 · answer #6 · answered by dkappa95 4 · 3⤊ 0⤋
More simply, the "dot.com bubble" caused stocks to become overpriced; that is, they were selling at too high a price compared to their projected earnings. When that happens, a market "correction", as its called, will generally occur.
2007-10-19 09:07:56 · answer #7 · answered by Anonymous · 1⤊ 0⤋
The tech bubble burst just like the housing market bubble burst recently.
2007-10-19 07:27:50 · answer #8 · answered by hootie 5 · 3⤊ 0⤋
A combo of stuff.... the dot com companies realizing they suck... Y2k...and 9-11.
2007-10-19 07:40:48 · answer #9 · answered by Anonymous · 1⤊ 0⤋
devaluation of the dollar, loss of the GNP and of course all of the 9/11/2001 stuff.
2007-10-19 07:27:31 · answer #10 · answered by Ronatnyu 7 · 0⤊ 2⤋