The Rewind: bubble.com

In this episode of The Memo, Howard Marks revisits his memo "Bubble.com," originally published in January 2000, reflecting on the tech and internet stock rise of the late 90s and its parallels to historical financial speculations, particularly the South Sea Bubble. Marks discusses the factors contributing to market bubbles, such as investors abandoning reason, the allure of easy money, and the "willing suspension of disbelief." He contrasts the environment of the dot-com bubble with the present, noting the outperformance of tech stocks, but cautions against excessive optimism and the dangers of conceptual investing. Marks analyzes the role of IPOs, venture capital, and changing business models, questioning the long-term profitability and valuations of new tech companies. He concludes by emphasizing the importance of valuation and the potential for a market correction, drawing parallels between the tech bubble and past manias.