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HIGH HOPES IN DOWN TIME

Author(s):    Ross Kerber, Globe Staff Date: August 17, 2002 Page: D1 Section: Business
BURLINGTON - Eric Janszen glances out the window at another high-rise along Route 128. "Look, there's another one," he says, nodding toward a new "space available" sign on the building next door.

It wasn't there the day before; two years ago this neighborhood was packed with start-up technology companies. Now, vacancies abound as investment dries up and stock markets plunge - the Nasdaq Composite index, barometer of the technology industry, has fallen over 70 percent from its peak in March 2000. Janszen seems nonchalant about the economic carnage, as if he could have told you it was coming.

Actually, he did. In 1998, when he was a Lexington-based venture capitalist, Janszen created the parody Web site www.iTulip.com. It compared the feverish rise in dot-com stocks to the Dutch flower mania of the 1630s, a time when prices for tulip bulbs reached the equivalent of more than $1 million - then plunged.

On his Web site, Janszen warned that too many technology stocks were trading far above levels justified by their price/earnings ratios, and proclaimed that he had sold most of his own holdings in May 1998.

"When the Internet tulipmania ends, if history has any value as a predictive guide, uneconomical Internet businesses will cease to exist and many investors are going to lose a lot of money," he wrote.

His hobby received wide attention in the business press and got him invitations to speak at investment conferences in London and on the West Coast. About 250 people bought the novelty stock certificates in iTulip.com that he printed and sold for $10 to $50, including humorist Dave Barry (who wrote back to say "Thanks. I sold the stock certificate for $14 million").

Scornful e-mail poured in from day-traders and others with a belief, interest, or hope that stocks would continue going up. Some business colleagues weren't more receptive. "I wasn't wise enough to listen to him," said Ralph Goldwasser, previously an executive at Adero Inc., a now-shuttered Waltham software company backed by Janszen's investment firm. "We expected the Internet to fuel a worldwide economic boom" for years to come.

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Janszen's thinking may have more influence now than in the past. Asked about his economic outlook, Goldwasser, the former Adero executive, at first mentioned that he expected a recovery in 2004. Then he retracted his forecast.

"Actually, I'd like to know what Eric's saying," Goldwasser said. "I have more confidence in his outlook than mine."

Ross Kerber can be reached at kerber@globe.com.

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