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    Transcript  - how was the ma Transcript - how was the ma Document Transcript

    • The bubbleHow was the market valued?Rory Cellan Jones‘Nobody knew how to value a dot-com. Analysts began to come up with all sorts of strangeand dubious ways of valuing these companies by the growth in users.You might double or treble the number of your users and therefore you would be worth two orthree times as much as you had been a few weeks back.It had no real logic behind it but to those involved in it, it did seem to be a method behind themadness.’James Montier‘You ended up valuing equities on the basis of eyeballs and clicks, how many times peoplelooked at a website, as if this was any use as an investment valuation metric.But it’s all about justifying the price, not actually analysing the price.’Mark Goodson‘You had new companies starting up with no history, you had nothing to research.It was the name, that was the research.If someone gave it a whizzo name, that was linked to the economy you know, somethingbeginning with an “e”, or something with the word ‘net’ in it, and it was: oh, that must be good,you know, it’s an internet stock, pwoar, up it went.It was as crazy as that.Everyone did the same, you know, technology was the market.’Barry Lake‘When you have put money, on a tiny amount in and it suddenly turned into 380,000, it’sextremely exciting because you start to think: wow, this is cool.You know, okay guys, we’re having new cars next year.’NarratorGreed and speculation led to the development of a further type of bubble – a so-called‘rational’ bubble.James Montier‘They’re cynical bubbles. People know they are not going to last, but they want to participatewhilst the times are good, believing they can get out before it all ends.’Mariana‘What the investors are really interested in is not so much that the company necessarilymakes a profit, but that you have, if you want, all these expectations around that company, sothe stock price goes up, and then the investors actually can just quickly get out and theymade a buck.And that happened both in railways in the 1840s, as well as in biotech and dot-com.’