One of the best indications that the Great Tech Stock Boom had climaxed was the creation of the
Growth Enterprise Market (GEM) in Hongkong in March 2000. Talk about a contrary indicator! Talk about Perfect Timing! When I read the following back in 2000 I remember shaking my head and
saying "uh oh."
Growth Enterprise Market
The Growth Enterprise Market (GEM) is an alternative stock market operated by The Stock Exchange of Hong Kong Ltd. GEM aims at providing
fund raising opportunites for growth companies of all sizes from all industries, i.e. enterprises that have good growth potential. GEM
does not require growth companies to have achieved a record of profitability as a condition of listing. The rules, requirements and
facilities of GEM are designed to satisfy the needs and standards of professional and informed investors.
I personally saw the huge lines of unprofessional and uninformed investors applying for shares of the tom.com
IPO in February 2000, and thought, gee, I'm actually witnessing a speculative mania in progress... this game of musical chairs has
to be just about up.
But did I sell any of my technology stock holdings? Did I take some of my massive paper profits
off the table then? Nope, I didn't sell a single share. There's a big difference between knowing what to do and actually doing it.
I saw exactly what was going on, understood that the end of a wild binge was at hand, but oddly I didn't
connect it with my own portfolio... it was like I was in a bubble of my own.
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