How Quickly It Can Happen

In April 1999 - "at its peak, Priceline was valued at more than $23 billion. This for a company that has been operating for only a year, had less than a penny in sales for every dollar of its market capitalization, and has yet to post a single penny in profits."

From that point, the stock completely collapsed, getting cut almost in half in a period of a month and falling a total of 99% in under two years.

Just like the revisionist theory of the 2008 crash (that it happened because the government "let" Lehman Brothers fail), there are academic rationalizations for the NASDAQ bubble in 2000, like the paper: Was there a Nasdaq bubble in the late 1990s?.

The price/book for the NASDAQ at the peak in March 2000 was 8.55. As I mentioned earlier this month, when Ben Graham started investing in 1916, IBM (then known as CTR, Computer-Tabulating-Recording Co) had a 7% dividend yield, traded at one-third of book value, and less than ten times earnings. And people still said it was overpriced and they wouldn't "touch it with a ten-foot pole"!