For those who were not around during the tech boom/bust, there are a lot of similarities. I bought a stock (Davnet - DVT) at 35c. Within 7 months it was $6. Analysts were calling it a buy with some having a $12 target. Then came April 2000 (from memory) and I ended up selling it for just over $1. One very big lesson was to not get caught up in the hype. The tech boom was full of hype and companies were valued at hundreds of millions of dollars, without producing revenues. In hindsight, i was a bit naive. At that time I saw my portfolio go 4 fold within a year (or less). Then i watched it slide to a point where I cut my losses and ended up with a loss.
The after effect of the tech wreck was that the good, strong companies producing 'real' revenue faired well. This carniage is a little different where many companies were producing good revenues. I suppose the subprime BS fraud is a little like the tech bubble.
My lesson i learnt and it has taken up till the past year to learn it, is that in times like these, buy good strong companies that will withstand our downturn in the economy. Also, we have to take into account that a lot of these companies (BHP included) will have to downgrade profits. PE's might night mean much at the moment because we don't know how earnings have been affected. On the other hand, are they priced in?
