Remembering the DotCom Boom : Part 2 – Here Come The Wolves

I vaguely remember it was around 1998-9 and the DotCom boom was well and truly getting crazy. All manner of companies were launching IPOs (Initial Public Offerings) and some with little more substance inside them than a flaky idea and a www.something.COM web address. They were bringing in millions of dollars as the Gold Rush of the Internet boom had almost reached its crescendo.

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I was busy running my own little Internet Business on the coalface and around this time business was booming. I was taking on so many new clients at one point I was growing by 10% a week and I was still working 7 days a week trying to stay on top of it. I thought the boom would never end. Technology was moving fast too and it was around this time I needed to make a significant network and server infrastructure upgrade. There was a lot of buzz around about the possibility of businesses making sales online and "eCommerce" was one of the big buzzwords at the time. It was around this time that eBay went public, but just like the Crypto market today – it’s hard to pick the one that’s going to be the long term winner....

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Anyone who has seen the movie The Wolf of Wall Street will know what I mean when I talk about the Wolves. I was still young and naïve and so busy with my own business I didn’t have time to do enough diligence on any investments and when I got cold called at the shop by a smooth talking Wolf (just like in the movie) to talk to me about a new IPO called NetCommerce, it sounded really good to me. I got a nice shiny Prospectus sent out and it looked full of potential to my young eyes, though in hindsight it was probably mostly marketing. This particular Wolf wanted to get me in for $50K but I was near fully invested in my own business and could only scrape up $6K. “That’ll have to do” he told me.

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NetCommerce tanked in the bust. I think it might have started bleeding even before the bust because I remember being fairly disappointed almost immediately. News from that far back can be hard to find, but I dug up a report from 2003 which I will directly quote here :-

For the last two years NetCommerce, Inc., listed on the pink sheets (NEET.PK), has been a dormant company and the stock has decreased to zero.

Anyway, this was my first real and hard (and expensive) lesson about getting caught up in the Mania cycle of a boom and not doing enough diligence on what was a significant investment for me at the time. A lesson that has got me a bit more cautious and conservative with investments in this Crypto space. Again there are massive similarities between then and now. The Wolves are still out there. Instead of IPOs we have ICOs. Instead of Prospectuses we have WhitePapers (sometimes), but the same Mania, FOMO and Marketing bullshit tricks are there and they are getting better. People are being taken in and taken advantage of in this Crypto Boom just like they were in the DotCom Boom. It’s never been more important to do your own diligence.

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I did finally walk away with almost nothing after the bust and while these were expensive lessons, they were invaluable ones. It hurt a lot at the time, but I eventually forgave my younger self because those hard life lessons made me the person I am today. Maybe I am a bit more cynical and distrusting, but I’ve learnt from personal experience that it’s better to be that way when it comes to investing. There is no better school to learn from than the school of hard knocks.