Dot-Com: When Stories Beat Math

The late 1990s saw a mania around internet companies. Stocks with no revenue, no profits, and no clear business model traded at astronomical valuations. Pets.com raised $82.5 million in its IPO and went bankrupt 268 days later.

The NASDAQ peaked at 5,048 in March 2000 and crashed to 1,114 by October 2002 — a 78% decline. It took 15 years to climb back to that peak. The lesson: revolutionary technology doesn't make every company in that space a good investment. The difference comes down to companies with real revenue versus those running on a story.