Bubble, Burst and Blossom: a Perspective Derived from the Internet Bubble
The Internet Bubble has led me to re-think the development of the modern world, and the interlock with the stock market.
Advancement of Human Beings
I think it is fair and understandable to say that human beings are advancing in general, because we are the intelligent organism. Advancement comes from the accumulation of knowledge, and always goes on. Simply put, when you find a better way to do something, often you don’t want to go back to the old, less efficient approach. So, after paper was invented, people tend not to carve words on bamboo. We use the calculator rather than the abacus. And telegraph is out of the picture in this information age.
In the largest scale, for all of us living in the modern world, the most significant line marking the advancement in history that was so obvious and important was the industrial revolution. The surge in productivity shaped our society today. And because of this, possibilities exploded and were realized in a speed not even imaginable in the past.
The Stock Market
The stock market displays an up trend in the long-run. Measured in decades, all stock indices go up compared to the starting point. In a way it is also a form of advancement, though arguably it can be said that the trend is just the reflection of inflation or economic activities.
On the other hand, short-term ups and especially downs are obvious. While economic cycle is a possible contributor, in which the pendulum swings back and forth, another explanation to these waves is the bubble and burst. The historically famous one must be the Tulip Mania (and tulip is not even a stock).
The Internet Bubble – a Strange Combination
In this information age, even a few years can feel so long. Now, probably not many people can recall “eye-ball rate”, when the Internet Bubble was at the top. Anything ended with “.com” felt like a fortune. The belief was so strong that almost everyone was sure there had to be money in it. Nevertheless, after the burst, the void seemed so big that the internet was just a dream too good to come true.
Take a look at where we are today. The internet has developed in a tremendous way surpassing all business plans at the highest time of the bubble. And look at these companies: Amazon, eBay, Facebook, just to name a tiny few. The fortune has actually happened!
So how are we going to understand what has been going on? I have a neat summary: bubble, burst, and blossom (BBB). We are destined to advance. In this capitalism world developments arise in the form of companies. The complication comes when the stock market decides to step in earlier, when the early companies are not yet ready to exert the world-changing influence.
The Next BBB?
Industrial revolution is great. It brought us many things and possibilities. What’s the catch? All these things are made on earth, using what the earth has. And in the process, resources are used up and unfavourable effects are made. And the population increase brought about by the abundance of supplies punches even harder. I think the impact on the environment has come to a point where related developments have to be made quickly, or the quality of our lives will be affected adversely.
Positively, I have high expectation on people and companies contributing to environmental protection and conservation. Hopefully this industry will rise in the near future.
A Far Reach on Medical Technology
If the environment starts improving, or at least stops deteriorating, soon enough, we may be able to see the next wave. By that time medical technology may bring us mechanical and electronic arms that can mimic the movements of a real arm, artificial organs to replace failing organs, and many more.
I think the sophistication of the stock market never stops us from advancing. BBB can be an interesting discovery, or a guide of how to get involved through different means.
(my LinkedIn post in 2016)