Top 10 Investment Stories of the Decade - 2000-2009

Every decade seems wild; at least that's what old timers always say ;) But I don't think anyone quite expected the first decade of this millenium to be as crazy as it ended up being.

Politically, I think the decade was actually pretty calm and uneventful. Even with the 9/11 terrorist attacks in America, the decade wasn't as bad as some of the past ones. I would say the 90's was even more volatile with horrible genocides, collapse of various former Soviet countries, and so on.

However, the situation was completely different when it came to investing.

Depending on the measures you use, the first decade of this millenium will go down as the worst investment decade for investors—it's worse than the 1970's or the 1930's (but note that the 1929 crash happened before the start of the 1930's decade.)

I like lists so I thought I would mark down what I feel are the top 10 investment stories of the decade. Hope you guys & gals enjoy it. I only started investing, and following the markets closely, in the mid-2000's so my list might be a bit skewed to the last 5 years. Sometimes various events are related to each other and I decided to list them along with the key event. Feel free to discuss the list and perhaps add what you feel I missed.

It was a good decade to cut your teeth and learn investing... the first decade of the millenium only comes around once every hundread years so hope you found it interesting, if not entirely enjoyable :)






Top 10 Investment Stories
of the Decade:
2000-2009

- 1 -

Dot-com Crash

Bursting of the TMT Growth Bubble



Might actually be the largest investment bubble in history...



- 2 -

America's Subprime Mortgage Crisis

Worldwide Credit Bust
Collapse of Lehman Brothers, Washington Mutual, AIG, HBOS, Royal Bank of Scotland, Hypo Real Estate...



Not a conventional investment bubble... long-simmering credit volcano...repercussions to economies all over the world...subprime was the least of the worries but it'll be always known as that...



- 3 -

China's Ascent

Rapid Growth of BRIC Countries
World Trade Boom



Riding a once-in-100-years trade boom, China rapidly rose to the top echelon in the world



- 4 -

Commodity Boom

Decline of the US$



How many in 2000 thought oil would hit $147?



- 5 -

Wireless Communications Revolution

Rise of Nokia/RIM/Motorola/Apple/HTC/etc and Decline of Traditional Telcos



Spectacular scientific advance on par with flight



- 6 -

Success of Internet Businesses (Social Networking (Facebook, myspace), Retail (Amazon, Ebay), Search/E-mail (Yahoo, Google), Media (YouTube), Numerous Others)

Collapse of Traditional Media



The 90's dot-com investors were sort of right; it's just that they were too early, way too optimistic, and didn't consider the potential impact on social relationships



- 7 -

Creation of the Euro



For the first time since the fall of the Berlin Wall, the US$ had serious competition in the global currency competition



- 8 -

Popularization of Hedge Funds



Hedge funds entered the popular vernacular... inaccessible to retail investors so direct impact was very minor on retail investors but greatly impacted institutional and wealthy investors (who own 90%+ of the stock market.)



- 9 -

Scandalous 2000's: Enron Scandal, Worldcom Bankruptcy, Tyco Scandal, Adelphia Controversy, Collapse of Arthur Andersen, Nortel Accounting Fraud, Numerous Others

Passing of Sarbanes-Oxley Act (aka Public Company Accounting Reform and Investor Protection Act)



Fraudsters, cheats, and white-collar criminals thrive during booms and the bursting of the dot-com bubble revealed many for what they were...



- 10 -

GM Bankruptcy




GM, once the largest company in the world and an American icon throughout the world, declared bankruptcy and needed large capital injections from various governments to avoid total collapse. Still one of the largest companies in the world with revenues 3x more than Microsoft and more than 240,000 employees.




Comments

Post a Comment

Popular Posts

Thoughts on the stock market - March 2020

Image
Right now, DJIA has a P/E of 16.8 and forwand P/E of 15.1, whereas S&P 500 is at 20.1 with forward P/E of 15.8. Source: WSJ market Data If you ignore interest rates and inflation expectations--both of these influence valuations but depends on your macro call-- the market is not cheap. Long-term P/E is around 15. Trailing P/E is around 20% (Dow) to 40% (S&P500) higher than average. Forward P/E is in line with long term average but that assumes a strong V recovery. Consensus forecast is for profits to drop 1.2% in 2020. In 2008, it dropped 25.4% so current forecast is a very mild recession. Covid-19 coronavirus is not going to last more than a few months but these forecasts are still too rosy in my opinion. So I wouldn't rely on forward P/E. The richly valued (mostly tech or high quality) have not fallen much but the distressed ones have. So if you want to outperform in the long run, I think one’s choice right now is to: • Wait for market to fall another, say
✖ READ MORE >>>

Warren Buffett's Evolution and his Three Investment Styles

Image
A Young Warren Buffett In a comment to one of my posts , Mark Carter, who incidentally appears to have a  good blog worth checking out , asked: "Buffett Prime is 1970's to early 1990's" Could you elaborate? I have vaguely indicated how I view Warren Buffett in the past, but I thought I would detail my view of his investing behaviour. This is more of an opinion piece and many others would disagree with me (if you do, I'm curious to hear your thoughts). I don't follow Warren Buffett as closely as many value investors so I may get some facts wrong. My view is that Warren Buffett went through three different phases, with each consisting of different investment techniques. The overall investment theory remained the same—what people call value investing—but his execution, tactics, and strategy differs across the three phases. Some people may break up his career into additional periods but my feeling is that the three I will describe essentially capt
✖ READ MORE >>>

Charlie Munger: Stock market as a pari-mutuel betting system

The model I like to sort of simplify the notion of what goes o­n in a market for common stocks is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market . Everybody goes there and bets and the odds change based o­n what's bet. That's what happens in the stock market. —Charlie Munger, "Art of Stock Picking" Although I don't share the same views on politics, I am probably closer to Charlie Munger than Warren Buffett when it comes to how we view the world. Warren Buffett is almost singly focused on business and investing, and is not very opinionated, indeed possibly not knowledgeable, in other areas. In contrast, I am closer to Charlie Munger in the sense that I have diverse interests—you can probably tell by the articles I link to or write about—and have an opinion on almost anything. There is one big difference though: I am not into the field of psychology quite like Munger. So it may be surprising to see me rarely
✖ READ MORE >>>