You, Wonderful You

Investment bubbles are fueled by suspension of skepticism. In his Forward to a 1932 edition Charles MacKay’s Extraordinary Popular Delusions and the Madness of Crowds Bernard Baruch wrote “I have always thought that if, in the lamentable era of the “New Economics,” culminating in 1929, even in the very presence of dizzily spiraling prices, we had all continuously repeated, “two and two still make four,” much of the evil might have been averted.” (Emphasis original) One can bring Baruch’s words into the new millennium by substitute “‘Dot.com Economics,’ culminating in 2000.” For a few years commentators picked through the wreckage of the dot.com era’s burst bubble in rueful reflection on the latest episode of crowd madness, but self-chastisement gets old. What better pick-me-up than a heady new combination of technology, sassy start-ups, soaring business valuations, and a new buzzword? Goodbye, Toysmart. (Was it Toy Smart or Toys Mart?) Hello, Web 2.0.

Investment folks often speak (not publicly, of course) about “smart money” and “stupid money.” Smart money monitors markets and invests early in growth opportunities. Stupid money reads about these opportunities in USA Today a few years after smart money got in, when 99% of the growth has been achieved. When stupid money shows up, smart money knows it is time to leave.

All of which brings us to Time Magazine’s Person of the Year: You, You Wikipedia-knowledge-sharing, blog-writing, YouTube-video-posting, MySpace-meandering vanguard of the digital-democracy-revolution. Stand up. Take a bow. Ask Starbucks for a free mocha venti half-caf no-fat extra-hot double-cup latte. The percs and perks will be pouring in because You are Time’s Person of the Year.

I’m reaching for an extra-large helping of skepticism: Seth Finkelstein’s prescient October 10 entry Google Buys YouTube – the structure of Bubble 2.0 ends with the words “That feast is starting now, and the main dish is YOU.” [Imagine Seth’s dismay at seeing his Web 2.0 epitaph transformed into Time’s Web 2.0 cheer. Seth Finkelstein is the Internet’s Cassandra, “a prophet[ess] whom no one ever believed and yet whose prophecies were always proved true by the event,” per Edith Hamilton’s Mythology] Seth’s brief and sardonic response to the Time story links to his other writings on the topic. If Seth Finkelstein is the Net’s Cassandra, Andrew Orlowksi is the sand in Web 2.0’s oyster. Orlowski here offers his typically barbed take on Time’s celebration of Web, also giving Seth his props.

Smart money, meanwhile, is quietly packing its bags. One investment possibility: decrying Web 2.0 hype.

One thought on “You, Wonderful You”

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