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Year 2002 Letters

Dear iTulip,
I recently discovered the existence of iTulip.com following a newspaper article on its founder and I was distressed that I hadn' t known about it before.  I put all my savings into blue chip technology stocks: Intel, Lucent, Cisco, Dell and Worldcom. I have practically nothing left of my original investment of $50,000.  Would you tell me, in your opinion, as if you were the one that owned these stocks, would you sell them or just hold them? Worldcom is bankrupt and probably not sellable, lucent is at 0 value or so. So I thought I have to keep them. But should I get rid of Cisco, Intel and Dell?

Thank you for your suggestion in advance.

August 20, 2002

Editor Replies:

We have always avoided giving advice about specific stocks.  That's because we don't know any more about the long term prospects of any individual public company than anyone else does insofar as the knowledge we have access to is not already reflected in the stock price.  But we're glad to share our prejudices.  Cisco, Intel and Dell are monopolies in their markets.  Cisco owns enterprise networking, Intel owns semiconductors for PCs and Dell is the best PC reseller in the world.  To the extent that you believe that demand for PCs and networking gear is going to increase, owning these stocks makes sense.  Dell and Cisco are special cases because they are both benefiting, at least for now, from their competitors' demise, gaining a bigger slice of a shrinking pie.  That may go on for a while longer but at some point the shrinking pie will hurt even Dell and Cisco.  Our hypothesis is that demand for just about everything is likely to decline over the next couple of years.  Safe to say demand for PCs and most networking gear will decline as well.  To make money in stocks these days, you can't count on rising demand across a broad industry segment.  You need to work much harder to make money in stocks.  You have to spot a trend that most others miss.  A pure play in a company that's in a fast growing market can make you money but is risky because there will be multiple players and you have to bet on the right one.  But this is the only kind of investment that makes money when demand trends are otherwise negative.  In any case, don't fell that you have to "do" anything.  Don't feel compelled to invest. Sitting in cash is just fine.  Keep your eyes and ears open.  Only when you see something that's clearly worthy does it make sense to invest.  Oh, and don't forget investing rule #1: Ignore sunk costs.  It doesn't matter how much you already lost.  Sell or hold depending on your determination of future gain.

Year 2001 Letters

Dear iTulip.com,

A 0.2% drop in retail sales hardly counts as a harbinger of depression. You should refrain from touting every trivial drop in production or rise in loan delinquencies as the leading edge of acute social pain. Continuing to do so, you run the risk of appearing to be a ridiculous parody of chicken little when the sky doesn't fall. You were completely correct regarding the flimsiness of a tech boom based upon the shallowest (Internet) foundations.  Surely your expertise could be used more purposefully than promoting the arguments of doom-sayers. Don't throw away a good reputation.

The United States government will not allow a dramatic drop in demand, and our national competitors overseas will not call in our loans or cash in our Treasury Bills.  At least the Japanese investor obtains some profit from holding our paper. In addition, the major industrial countries realize that attacking the dollar would bring down their own economies. The period of severe recessions and depressions in the industrial countries is over.

April 9, 2001

Editor Replies:

It's not the recent 0.2% drop in retail sales that suggests a depression.  It's that announcement in the context of:

  • U.S. payrolls logged their sharpest fall in nearly a decade (4/6/2001)
  • U.S. factory orders fall in sharp contrast to forecasts (CNNfn 4/3/2001)
  • U.S. orders edge lower, below estimates - 3/27/2001
  • New-home sales dip (SFGate.com 3/27/2001)
  • Industry Output Slides Once Again (3/16/2001)
  • Jobless Claims Rise in the Last Month (Reuters 3/15/2001)
  • Credit Card Delinquencies Climb (3/15/2001)
  • U.S. Business Inventories Rose Faster than Expected in January (3/14/2001)
  • Household Net Worth Contracted in 2000, First Time Since Early '50s
  • (3/13/2001)
  • U.S. February Retail Sales Unexpectedly Fall (3/13/2001)
  • U.S. orders tumble (2/27/2001)
  • New-home sales drop sharply (2/27/2001)
  • See a pattern?

    This was predicted by others besides ourselves, but not quite as early.  To wit: Drowning In Debt.

    Also disagree with your position on the end of severe recessions and depressions for industrial countries.  These have not been banished.  In the case of the Japanese economy after the collapse of their financial bubble in 1990, it's too early to say that the Japanese government has prevented a dramatic drop in demand.  All that has been proven so far is that depression can be delayed for a decade or more with deficit spending and interest rate cuts.  What remains to be seen is whether the Japanese would have been better off suffering a depression before when their fiscal house was in order versus now when the national government is on the verge of insolvency.

    Will the U.S. fare even as well?

    Consider that Japan had several advantages over the U.S. when its bubble popped.  Unlike Japan, the U.S. heads into its post-bubble recession not with $100,000 of average household saving and near zero household debt, a large trade surplus and outstanding public debt that was around 20% of GDP.  The Japanese still have huge private sector savings but public debt exceeds 100% of GDP.  Even with zero interest rates, economic stagnation remains.

    By contrast, the U.S. heads into its post-bubble recession with 65% of households with less than $5,000 in liquid assets.  The average has $8,000 in credit card debt.  The U.S. has the largest current account deficit of any nation in history and an outstanding public debt that's nearly 60% of GDP, left over from the long-forgotten 1980s deficit spending party.  More than 40% of that debt is owed to foreigners and 83% of that is privately held.  What will keep individuals and corporations from selling if they fear losses due to unfavorable currency exchange rates?  How much will the Fed have to raise interest rates to prevent the repatriation of a large portion of that debt and what will such rate hikes do to a U.S. economy in recession?

    When we first started to talk about the tech mania, we were labeled  Cassandras.  In fact, our current prediction of a three to five year depression, like the once outrageous prediction of an average 87% decline for most Internet stocks we made in January 1999, may turn out to be optimistic.

    We're generally optimistic folks.  But we do not see how wishful thinking is going to help our readers overcome the fundamentals.

    Dear iTulip.com,
    As a long-time reader of your site I would like to commend you for the fine job you are doing.  I am aware that you started this venture to poke fun at internet investors.  Since that group is now more likely to be pitied than laughed at, you have chosen to take on the larger issue of investing by the little person. This is a much large role, one that demands a strong social conscience that is evident in your pieces.  In other words, it appears as if  you care what happens to Mr. and Mrs. Smith.  The investment community, in large measure, does not care.  How many apologies do you you hear from the likes of Tom Galvin and Abby Cohen?  I don't see them donating their bonuses to charity.  Wall Street, as a business, lacks accountability to the society at large.  Once again, I commend you for what you are doing.  Somewhere, there should be a place where the carnival barker is accountable for the lousy show in the  tent.  I think you are that place.   Keep up the fine work!
    Michael S.
    April 15, 2001

    Dear iTulip.com,

    I just read your 11 April piece concerning complaints from readers.  So here is a KUDOS email to help tip the scale in the positive direction.  I've been reading the site regularly since the beginning, and I've learned a great deal from your editorials and your excellent selection of links.

    No, iTulip did not save me from certain ruin when the bubble popped.  I've been contrarian since 1998, so nothing on iTulip 'changed' my mind.  (Side note: I am probable the youngest person you know that has 90% of his portfolio tied up in US Treasury money markets.)  As I mentioned above, however, I have learned a great deal from iTulip and I am certainly better informed.  Possibly the greatest value of the site to me has been the intangible: when everyone around you (a) disagrees with you and (b) is making piles of money doing so, it is truly comforting to be able to read well-reasoned information that indicates you are not nuts.

    My advise to you, and my heartfelt request: stay the course... thousand points of light...

    Keep up the great work,

    April 11, 2001

    Dear iTulip.com,

    Like many of your readers (I have been at your site nearly every working day for well over a year), I find your message of little comfort.  Nevertheless, it appears quite likely that it is far closer to correct than the "inventory correction" message the esteemed Mr. Greenspan has been sending.  It would appear that the US asset bubble and subsequent decline in the 1920's and 30's, and the Japanese bubble of the 1980's and its subsequent aftermath are the most relevant examples of what can happen.  Furthermore, it seems that a case similar to the 1968-74 period for the economy, which was followed by a not so stellar performance for either the economy or the markets, is perhaps a best case scenario.

    Keep on writing the news we all need to hear!

    Jim R.
    April 11, 2001

    Dear iTulip.com,

    Hey, just because most "investors" keep whistling past the graveyard, don't give in.  The argument today for being invested is premised, as you discussed, on the notion that the  GOVERNMENT can control the economy all the time.  You and I know it cannot.

    I have enjoyed your work immensely over the last two years.  Like all citizens I don't want to see a depression, especially given our social conditions, nevertheless pretending that somehow we can "will" the capital markets back to immediate normalcy is not how economics works.

    Carol B.
    April 11, 2001

    Dear iTulip.com,

    I find it despicable that the horde of analysts coming onto CNBC (and elsewhere), having conveniently forgotten the debacle that they so recently helped fan into existence, are now smugly offering up advice on the market as if it were again divinely inspired; brought down from the Olympus and made intelligible by the application of their infinite wisdom.

    If confronted with their proven failure to analyze themselves out of a paper bag they plead ignorance and claim to be victims of the markets, just like everyone else.  But that's not how they and their companies held themselves out to the legions of naive investors out there.

    They knew that a great many people would hang on their every word as regards stock advice in so far as they had positioned themselves as experts in whose advice one could confidently rely.  For them to now claim ignorance is not a defense.

     And now they are doing it all over again but have stealthily veiled themselves behind the confusion of a whole new bag of buzz words and catch phrases.

    There otta be a law!


    April 11, 2001

    Dear iTulip.com,

    Well, you may be overdoing it now and maybe not. Nobody knows for sure.  It's always besst to take all the available evidence and make your own decisions.  There is plenty of evidence that most people are sheep and unreliable.

    I happen to agree that we will have the worst recession since the Great Depression.

    I suspect that what you are hearing may be due to people not wanting to face the possibility of a lot of pain, which would happen with a severe recession.  A downturn in the market affects only the few who have displayed irrational euberance.  A severe recession hurts nearly everyone.

    Heck, I am worried about this recession, even though I have enough money to last at least eight years, unless FDIC collapses.

    Stick to your approach.

    April 11, 2001

    Dear iTulip.com,

    Many thanks for your wonderful site. Best, simply . Although I have not invested in the Nasdaq your insight is simply amazing. I have been living in Japan for the last five years and it blows my mind that the average American could not spot this bubble of epic proportions. I always say birds of a feather flock together.  Keep up the great work and always look forward to your insight into the world economy.

    Best regards,

    George L.
    April 10, 2001

    Dear iTulip.com,

    Can I say, what a great site. I started visiting, by accident, about 18 months ago and have been fascinated to see just about all of your predictions work themselves out.  It's been a bit like a slow-motion train crash.

    I've not acquired much capital at 30, but what I have, about 30K, has been sitting in cash earning 6% for the last year or so.

    To the purpose of this mail. I saw you posted a disparaging link to a BBC news story that took a glib and complacent view of the market collapse. Much as I love the BBC as a news institution, it has a blind spot as far as business and economic reporting is concerned. Their other role seems to be cheerleader-in-chief for the Euro - a phenomenon held in such contempt in this country, like you would not believe.

    This story link neatly combines complacency over the current climate with putting the best possible gloss on the paralysis that comes with setting one-size-fits-all interest rates for 12 disparate economies: Sniffing out an ECB rate cut (BBC News 4/3/2001).

    April 3, 2001

    Year 2000 Letters

    Dear iTulip.com,

    I have followed your website with religious zeal since its inception.in 1998.  I ducked the NASDAQ implosion while others have suffered. I even managed to sell at the top of the market bubble in Feb 2000!  Many thanks to your prescient website!!!!
    G. Marsh
    December 3, 2000

    December 4, 2000: Letters sent to iTulip.com between June 2000 and December 2000 will be backfilled shortly.  Thank you for your letters and your patience.

    Love your website... always makes me feel better.  I worked in the IT department of a large manufacturer in Atlanta until the day management came in and told us to pack up and go.  They decided to outsource the whole IT function.  So much for that MCSE.  Not to worry though.  I am pretty good with the mechanical trades so I landed a job as a mechanic in a poultry processing plant.  Funny thing...  I have better job security and better benefits.  The fact that I was computer literate was a definite selling point.  Now I work only 8 hours per day and every other Saturday.  I am wondering why I ever went for that MCSE.  Glad that I am missing out on the dotcom bloodbath, but processing chickens sure does smell.

    June 30, 2000

    Dear iTulip.com,

    Dilemma!  How do I give all my money to iTulip.com without creating a threat to the mission and objectives of this wonderful company?

    June 12, 2000

    Dear iTulip.com,

    Congratulations gentlemen! Very lucid and well done. I have given up trying to convince a few choice friends of the economic dangers they face in the current environment. Although some concede I am 'probably right' they are unable to bring themselves to the point of actually selling their stocks. I enjoy reading your site very much, its helps bolster me when I know I'm not the only wacko out there.

    June 10, 2000

    Dear iTulip.com,

    I think the site is really great. History is the master of present. Your web site gives me a lot of perspective. Thanks a lot. Best regards from Spain.

    June 7, 2000

    Dear iTulip.com,

    I like the site. Keep up the good work.  Thank you.

    June 5, 2000

    Dear iTulip.com,

    I've just read a ridiculous comment on ZDNET news (where else) on the "Return of the dot-coms."

    Here's the link: http://www.zdnet.com/zdnn/stories/comment/0,5859,2581032,00.html

    Here's my reply: Hogwash!  Drivel!

    The moving of money from the boring "old Economy" stocks with their "boring" levels of return on investment to the "New Economy" stocks had nothing whatsoever to do with rational investment of any kind and had everything to do with gambling mania of the WORST kind.

    Its nonsense to suggest that such "good times" will return to the highly unprofitable dotcoms unless we see another bout of the lottery fever which overtook the NASDAQ from October 1999 to March 5, 2000.

    Most of the dotcoms thoroughly deserve their new valuations and some of them not even that. They are the junk bonds of the 21st Century.

    We are now in a situation of rising inflation, rising interest rates, a slowing of the growth of the economy (though not slowing enough for the likes of the Fed), record levels of personal and corporate debt and a chronically tight labor market.

    The way forward for the stock market is called RECESSION.  For those interested in such things, the next phase will be "stagflation" a point in the economic cycle charaterized by high interest rates and high inflation.

    I think I shall name the era: "THE GREENSPAN BOOM"

    For a more rational comment than this try www.itulip.com.


    June 5, 2000

    Dear iTulip.com,

    Fab-u-loso!  I couldn't have said it better myself.

    June 5, 2000

    Dear iTulip.com,

    Burt Malkiel pointed out that if any inefficiencies in the market exist, the market will find them and trade on them, and the inefficiency will go away.  True enough.  However, just as market inefficiencies are self destructive, so is Efficient Market Theory itself.  EMT is based on the idea that a large number of investors will independently analyze securities and trade on their rationally perceived value. But when a large number of investors start to believe in EMT, analysis goes away. Why analyze, when all the fundamental information in a security is already encoded in its price? EMT dogma states that there is no such thing as an overvalued stock, so investors become willing to buy the stock at any price.

    Just an idea.

    June 4, 2000

    Dear iTulip.com,

    Contiue with the good work . The site is a beauty.

    June 1, 2000

    Dear iTulip.com,

    I suspect that as the consensus extrapolates rate rises further into the future, we're getting close to a peak in interest rates.  The collapse
    in many financial asset prices, combined with the previous rate rises, is likely to lead to surprisingly slower growth in the coming quarters.  We haven't begun to see the negative feedback loop between stock prices and fundamentals yet, but it's coming.  Don't be shocked if the Fed holds off on another tightening in June, at least to pause and reflect.  The surprise to the stock market may be that the peak in interest rates doesn't coincide with another leg in the bull market---after all, the bear ate him.

    May 26, 2000

    Dear iTulip.com,

    I just wanted to let you know how much I enjoy your website.  I just finished your piece on your father's investment experience in the
    1960's, a period I lived through as a young investor, and it really connected.  I remember the grinding decline, people who had to postpone retirement, people who lost their retirement because companies went out of business, and the tone of the times that ended in "The Death of Equities" Business Week cover.

    The clear, well written, no nonsense style you have and that is reflected in your selection of articles is truly refreshing.  I'm not sure how you find the time to do this or why, but I hope you keep it going for a longtime.  It's one of my favorite sites on the web.

    Best regards,

    May 26, 2000

    Dear iTulip.com,

    I was glad to see you finally give a prominent mention to precious metals.   Due to where I was in my life cycle (building a career and learning  expensive lessons in personal money management), I completely missed the bull market in equities.  Thanks to my ability to reject popular beliefs that don't compute (wonderfully reinforced by sites like itulip), I have avoided the trap of getting in near the top (whew!) when I finally have significant funds to invest.

    I feel very fortunate.  Simply saving one's pennies is indeed a way to financial security, but without a beast to ride, it's painfully slow.  I am consoled over the fact that I missed the stock bull by the fact that another bull is bound to take its place, albeit (as always) with unknown timing. Its face is plainly visible to me, and I'm firmly in the saddle (whew!).

    Down the trail (three years, ten years?) when CNBC is doing 3-D high-definition webcasts of experts recommending people buy into the peak of the [next] metals mania, I'll be selling... and finally getting the diversification I crave, with a rounded portfolio of AAA bonds, Wilshire 5000 index, and real estate (leaving a bit in metals, just to be on the safe side).

    The crowd has a hilariously short memory, like a school of fish.  Investors like Buffet, who stay ahead of the school (lighten equities near the peak of the equities mania, buy 180,000,000 oz of silver when it's below $5), do fabulously well, and at very low risk.  My big regret is that it took me so long to develop concurrent income and wisdom.

    iTulip.com is a tremendously beneficial phenomenon, to me the cream of the bear sites.  If you haven't indulged in any private self-congratulation lately, go ahead and reach around and start patting.  In my opinion, the devastation you are saving your readers (and the bonanza you're providing to the ones smart enough to take note of your "wacky" Dow Ratio observation) is maybe a
    lot more beneficial in the big picture than if you instead gave the money (time=money) to conventional charities.

    Hats off to you!  The Bull is dead.  Long live the Bull!


    May 25, 2000

    Dear iTulip.com,

    I read with great interest your web sit on the folly of manias. Good to see it done with a sense of humour. I was wondering if you were aware of the 56 year panic cycle found in US and Western European economic history since 1760.  The paper Financial Crises & The Number 56 has been published by various technical analytical groups in the US, UK and Australia. Kindleberger's listings of major panics (Appendix B, 1996) fall preferentially in the 56 year cycle patterns with statistical significance (p < 10-4) for the 1760-1940 era.

    Financial crises tend to occur every 56 years in sequences (Kindleberger's major panics have been asterisked *). For example:

    Seq 1       1817    US recession
                    1873*  US Black Friday (Sept). German & Austrian panics(May)
                    1929*  US Black Tuesday (Oct). World crisis.
                    1985    US$ crisis (Sept) Plaza Accord

    Seq 3       1819*  US panic (May)
                    1875    US depression
                    1931*  US crisis. World crisis.
                    1987*  US Black Monday. World panic.

    Seq 21     1781    US deflation. Collapse of the Continental.
                    1837*  US panic (May)
                    1893*  US panic (May)
                    1949    US recession.

    Seq 48     1808     US Embargo Depression
                    1864*  French panic (January). US panic (March)
                    1920*  US & UK panics
                    1976    No crisis

    Such sequences are interconnected in multiples of 9 years (see Table 1, my paper attached).

    The relationship between this 56 year panic cycle and the Kondratieff wave has been outlined in another paper - Business Cycles & The Number 56.

    The 56 year cycle arises because of changing mass psychology rather than external influences and cycles of innovation. This has been covered in The Sun, The Moon & The Number 56 (also attached). The 56 year cycle is hypothesised to arise from the tidal effects of the Sun and Moon, which influence mass psychology and therefore the markets. This strongly supports the view that markets are driven by investor psychology.

    You should also find interesting the paper Lunar Phase & US Crashes, which was published by the Australian Technical Analysts Assoc recently. If you obtain a listing of the biggest one day falls in the DJIA, it will not correlate with lunar phase. I tried this over several time frames and indices. However, if you get the biggest one day fall in any given year (called the annual one day fall), it correlates beautifully with lunar phase. For example the crashes of 1929, 1987 and 1997 all had the Sun and Moon in narrow 15 degree ecliptic segments with lunar phase between 320 and 326 degrees. Sun - Moon similarities also occurred on the prior DJIA record highs, the DJIA October highs and the annual one day rises immediately after the crashes.

    Hopefully you find these attached papers informative and useful.

    May 25, 2000

    Editor Replies: We aren't big fans of cycle theories, charts, astrology, or any other method of market analysis where cause and effect are not evident.  How does the moon effect mass psychology?  It doesn't.  Markets aren't magic but they are highly complex and dynamic.  Financial manias are form of market anomaly.  Take the ubiquitous materialist wish for quick riches, combine with the American population's tendency toward blind acceptance of authority (i.e., any member of the press, anyone with a title, and anyone with money), add in the dependence on ad revenue from publically traded companies by major media companies whose stock is also publically traded, introduce a new technology no one understands and thus cannot price, add excess liquidity via the banking system and -- presto.  You have the ingredients of a financial bubble.  Any random event that awakens the crowd up will crash it.  No full moon required.

    Dear iTulip.com,

    The site is great.  I appreciate the humerous attitude toward what is essentially a fantasy trip that the general public accepts as real, and, at the same time, they are being told factually and logically the historical precedents to take their money and run.  I enjoy the stock certificate even though I think $50 is a little stiff... then again perhaps I've bought a financial heirloom I can pass on to my offspring and foil the taxman.  I'll get it framed one of these days and it will generate some laughs among my friends... except the one who thinks she's going to hold on to her dot.coms until they ascend sort of like the Phoenix!

    Keep up the good stuff.

    May 24, 2000

    Dear iTulip.com,


    May 24, 2000

    Editor Replies: Yes, the insanity is temporary.  The aftermath, unfortunately, is not.  See letter below.

    Dear iTulip.com,

    I have bought Microsoft stocks at 78 per unit and therefore have lost money since I purchased. I also have bought Sciquest at 11 and I still lost.  I always believed that recent downturns would be temporary and stocks would increase on a long term (5 -10 years) investment philosophy.  I, as an optimist, believed that prices would increase again in Q3 and Q4.  After I have read some of your excellent articles, I begin to have serious doubts and I have now for the first time condidered to sell and accept my losses. Like
    everyone else, I hope that the economy will continue to grow moderately and such losses will turn into gains by the end of the year. But....hasn't Soros turned his back on the market by taking 90% of his investments out of the market!

    Frankfurt, Germany
    May 24, 2000

    Dear iTulip.com,

    You should also mention the Amazon.bomb plan of issuing debt in Euros so they can speculate on a fall in the currency in order to create a negative interest rate.  What happens if the Euro rallies?  These companies have used every hokey financing technique in the book.

    On gold, my best estimate is that in real purchasing power the price of gold and the Dow will cross again -- most likely in the $2000-3000 range.  This number can be obtained in a number of manners.

    First, take the gold peak price from its 1900 value of 20.67 and you found that it had compounded at rought a 6% annual rate -- more than money supply growth -- at its current price of $270 the annual compound rate is less than 3% -- obviously less than money supply growth.  A 6% peak price gives you $2000.

    A bull market usually is around a 10 fold move or $2500

    Book Value on the Dow around 4000 -- dollar devaluation and you are there.

    Allen, CFA
    May 23, 2000

    Dear iTulip.com,

    Kudos on a truly excellent piece of work (22 May).  I've spent over a year trying to drum tiny bits of reason into my friends and family (including my none-too-popular presents of "Extraordinary Popular Delusions" for XMas '98 and "Devil Take the Hindmost" for Xmas '99).  I will forward your piece to the same audience ... maybe now that the market has stopped doubling every few weeks, they'll take pause.

    Keep up the great work!

    May 23, 2000

    Dear iTulip.com,

    Best of it's kind out there, bar none.  I have been a daily reader since your inception.  Too bad greed and wishful thinking has clouded the "masses" common sense.  Unfourtunatly, we are all going to pay for these excesses for years to come.

    May 23, 2000

    Dear iTulip.com,

    A refreshingly reasonable, measured voice heard across the shrill landscape of the Net, your site's one of my favorites. I check it
    every day or two to read whatever new has been posted. Keep up the good work!

    Dr. House
    May 23, 2000

    Dear iTulip.com,

    I like the site.  I know we are in for some lean times, I feel fortunate that I am aware, and appreciate the information your site
    gives to help me prepare for the future.

    May 23, 2000

    Dear iTulip.com,

    Your ideas on the current economic scene comport with mine.  I'd bring a couple of extra ideas to you for consideration.  I believe we are entering a long period of chronic oil market instability, both in price and supply.  The two oil fields that saved our asses after the disruptions of the 70s, North Sea and North Slope of Alaska, will pass peak production this year.  After that, the bulk of world oil
    will be controlled by people who don't like us. The living arrangement that Americans consider "normal" is poorly positioned to adapt to even light-to-moderate instability in oil markets.  The economies of scale of many "normal" activites achieved during the
    past 20 years -- everything from national chain big box merchandising to lengths of commutes -- will be severely challenged.  The potential for political mischief around oil market instability both here and abroad is huge.  I will starkly predict, therefore, an orgy of default, repossession, and lost value in suburban real estate of all types.  The domestic political implications of this would seem extremely dark to me.

    May 23, 2000

    Dear iTulip.com,

    Love the piece you put together today.  It is interesting that, working in an investment firm filled with men who have been in the business since the late 60's, no one but me seems to have any conviction that "what goes up, must come down" (interestingly, they are some of the same people who tell us youngsters, I am 36, that we've never seen a real bear market).  They all thought I was looney earlier this year when I stated that the NASDAQ would lose half of its value before this is over.  They thought I was crazy when I said the brief January decline was just a sideshow, and called for higher highs before the ultimate slide.  They still think I'm crazy when I say that the NASDAQ could easily end up at 2500 or lower.  They also don't believe it when I say that this low volume grinding decline could last years, not months.  Oh well.  I continue to find your writings insightful and enjoyable.  Thanks for taking the time --
    iTulip.com is a gem.

    May 23, 2000

    Dear iTulip.com,

    I read your site every night.  It is one of the best on the entire web. Your articles help me to stay rational. It is unbelieveable how the CNBC crowd twists the truth to generate commissions. You really have helped me not to be sucked into the lies of Wall Street.

    May 17, 2000

    Dear iTulip.com,

    "Well, of course," said the talking horse. All the bedrock securities laws currently in place were put there AFTER the Great Crash of 1929-32.  Another wave of laws and amendments came in the 1970's and 80's, after another debacle. Going forward, there'll be plenty of work for legislators.

    Federal Home Loan Bank Act of 1932
    Securities Act of 1933
    Home Owners Loan Act of 1933
    Securities Exchange Act of 1934
    Federal Savings & Loan Insurance Corporation (1934)
    Public Utility Holding Company Act of 1935
    Trust Indenture Act of 1939
    Investment Advisers Act of 1940
    Investment Company Act of 1940

    There's more, I'm sure.

    May 16, 2000

    Dear iTulip.com,

    Thank you for a great web site. I read it daily. I have the majority of my  money in T-bills.  The investing publics' mantra is "buy on the dips" which they do time and  time again. Greenspan has allowed asset inflation to grow out of control. His weak interest rate increases will not shock investors into a more conservative investment mode. Witness the incredible in your face stock market increases two days prior to a possible .05% increase in the Feds fund rate. I believe the investing public is playing a very serious game of chicken with Greenspan and I am beginning to believe investor's going to cause Greenspan to blink first. Watch out the market is about to take off, again.

    May 16, 2000

    Dear iTulip.com,

    I enjoy your web site.  I'm trying very hard to prepare for the next Great Depression just in case.  If it comes, how long will it last, 10
    years, 20 years?  Will Banks be okay?  Can Mutual Funds survive? Will Online Brokers disappear like Bucket Shops in the 20's? But, more importantly, what will be the unemployment rate?  How can people keep jobs?  Please, tell us how we can prepare for the next Great Depression if it comes.  Actually, I don't care too much about further predictions since I already understand your points.  Rather, I'd like you to just assume the worst cases and tell us how you think an average family can best prepare for such events.


    May 16, 2000

    Editor Replies: Young economists believe a repeat of The Great Depression is impossible.  Old economists, such as J.K. Galbraith, disagree.   Faith in banks and central bankers has never been higher.  But this was true in 1929 when it was believed that the banking system was bulletproof and the central banks firmly in control.  After all, they had firmly beaten the inflation produced by WWI just as cold war and welfare state inflation has been beaten in our time.  In a worst case future scenario, the world's economies once again contract for a long period, with high unemployment and unpredictable currency fluctuations, perhaps with either severe deflation or inflation -- no one can say for sure.  The best insurance still available against either event is cash, inflation indexed bonds (and I Series savings bonds) and the relic, gold.  Yet, if one is to prepare for the worst case, one must also be prepared for the best.  Look how quickly Asia has recovered from its 1997 crisis, or at least appears to have recovered.  Putting all one's eggs in the gloom and doom basket is unwise.  The modern world economy does appear more crisis prone, yet more recovery prone as well. 

    Dear iTulip.com,

    Well there is no doubt that Alan is on to something.  Inflation is moving along and he is going to need to take a Volckerish stand to stop this upward trend in prices. If he doesn't we're are headed for financial ruin.

    J. Ferg
    May 16, 2000

    Dear iTulip.com,

    I enjoy your comments and perspective, especially as it disagrees so much with the opinions of many of the internet investors I know.  I've had some fun playing the nets and despite the collapse (of both the NAZ and my portfolio), I'm still way ahead of where I was a year ago and sitting on a big stack of cash now ... and contemplating making it even bigger.

    OK, now to my comments about the iTulip.com CSCO story last month.  I agree CSCO's lofty valuation is scarey, even at current levels ... however when you compare CSCO to Ford and other "old economy" companies, you fail to take into consideration that for the 26 weeks ended 1/29/00, CSCO net sales rose 52%. Net income totalled $1.25 billion, up from $791 million.  You won't see that kind of growth in Gillete or GM.  So while CSCO is too prciey, I can't agree that CSCO should enjoy the same PE as a slow-growth company.

    Is that what you're suggesting?

    Portland, OR
    May 13, 2000

    Editor Replies: "How much does a company have to earn over the next 10 years to warrant a multiple of 190? By the old-fashioned one-to-one rule of thumb, matching the growth rate with the P/E ratio, earnings would have to grow 190% a year." Barron's - Cisco's Bids - May 8, 2000

    Dear iTulip.com,

    I enjoy the quotes you put in the rolling text message at the bottom of the browser, BUT.... could you puh-leeeze put them in a location at the top or side of the page (like www.andrewtobias.com does), instead of at the bottom of the browser... This is because you can't see the URL of a link which you might be interested in.

    May 12, 2000

    p.s. You guys opened my eyes BIG TIME.

    Editor Replies: We took it out for now.  Thanks for the suggestion.

    Dear iTulip.com,

    You wrote on May 9 that you were going to come up with a new angle now that the Internet stocks crashed. Is it predicting the future? A war between  China and Taiwan?  what????


    Editor Replies: The new angle for iTulip.com is simple: everything you need to know to predict the future is staring you right in the face.  All you need to do is turn down the TV, close the newspaper... shut off the daily media noise and listen. It's coming at you loud and clear.  Look around you.  What do you see?

    Dear iTulip.com,


    May 11, 2000

    Dear iTulip.com,

    Don't know what your plans are, but just wanted to put my .02 in--I check your site every day, and find plenty of useful information on it.  Please keep it up.

    May 10, 2000

    Editor Replies: Thanks for your support, Dennis.  We're hammering out the new plan now.

    Dear iTulip.com,

    Regarding Let's check back with Larry Barrett in six months (4/18/2000) thanks for the link, and the lovely commentary.  I've downloaded Larry's page as a quintessential example of speculative fervour.  It will come in very handy in my classes in finance next year!

    Cheers, and thanks for maintaining this page,
    Steve Keen
    Senior Lecturer in Finance
    University of Western Sydney
    April 22, 2000

    Editor's Note.  Steve is putting the finishing touches to a book called "Debunking Economics" which will be published by Zed Books this year.

    Dear iTulip.com,

    Regarding your editorial What's Next (April 13, 2000), your analysis is cogent!

    In your dollar devaluation scenario, what investment strategy works?  Gold?  Commodities?

    Thanks for the good work.

    April 16, 2000

    Dear iTulip.com,

    I continue to read and appreciate iTulip.com. There are a few things that bother me about what is happening that I'd like you to comment on:

    1. Even though the number of American households with equity investments has increased dramatically in the last fifteen years (I believe that it has more than doubled) more than 85% of equity investments are still owned by less than 5% of the population.

    1a. Even if all of the average citizens have given in to mob psychology, and have indiscriminately bought tech shares, which I don't believe to be the case, could it have these effects -- 86% rise in the NASDAQ in a year and fantastic up and down volatility -- if in fact these people only account for less than 15% of the market?

    2. Real annual income for Americans rose just one cent between 1979 and 1999.  Here my source is the Bill Moyers PBS special that aired in my time zone last month.  I don't know how reliable Bill is, and I don't know why 1979 was chosen as the start date for comparison.

    2a. If real income has risen only a penny, which can't even be statistically significant, who can really reference a "wealth effect" for what is happening?  Come to think of it, maybe what should be referenced is a "debt effect" -- now that's really scary. Perhaps that is what you are saying on April 16th.  Can there be that much private debt?

    3. Where is the safe place for your "savings"?  A savings account earning 31/2% interest isn't safe because the time effect of inflation is spending your money for you.  Real estate... there's a gamble, too.

    3a. I understand that (hopefully) slowly losing your savings to inflation is a lot better than losing everything quickly in a bad dot.com investment.  But I think that the risk in simple accumulation that has been tolerated since the sixties is .... discouraging.

    I guess that my summing point is that there is possibly an "institutional" aspect to what is happening that isn't explained by a Tulip-mania concept. Have you considered that ?


    April 16, 2000

    Dear iTulip.com,

    I have appreciated the content of your website during the prolonged stock-price bubble.  Thank you for your good deeds. Although your deeds appear simple, it is apparent that the material that you have compiled, including the manner of its presentation, took much work and thought.

    Now that the unwinding of overvalued stocks has begun, there are going to be many persons who will suffer financial hardship.  I am thinking, primarily, of the dependents of persons who have speculated in the purchase of stocks.

    You and the operators of your website have some choices to make.  You can thumb your noses at those who suffered self-inflicted hardships or you can throw them a life line.

    I trust that you will move forward to throw them a life line.

    Your website will possess great mass market appeal and credibility for predicting the unwinding of overvalued stock prices.  You can build upon that appeal and credibility by making sensible suggestions.  Those sensible suggestions can be your work plus links to pre-existing websites on how to budget a family income, to create a payment arrangement with creditors, to understand th power of compounded returns in a tax-deferred account, and to invest rationally (the "Intelligent Investor" is still in print).

    In a nutshell, do not remain a one-dimensional website that predicts catastrophe (although it was warranted).  Move forward and use your good judgment to improve the lives of those who are, and will soon be, drowning financially.

    April 16, 2000

    Dear iTulip.com,

    Regarding your editorial What's Next (April 13, 2000),, In a word, Brilliant!

    I was first referred to iTulip by fellow posters on the BMG message board.

    In my opinion, you have nailed the future.

    April 16, 2000

    Dear iTulip.com,

    Regarding your editorial What's Next (April 13, 2000),, very good insights.  Where should one put assets to protect them if this scenerio unfolds?  Gold, T-bills probably.  Real estate?  Warren Buffett has been buying REITs lately...

    April 15, 2000

    Dear iTulip.com,

    Well done on your website.  Having studied all the bear sites this past of couple of years and now see the opportunity and danger present. It is all a great help to know that people such as yourself are here reinforcing what is obvious to me as "common sense."  The exciting changes are going to effect my six children and 10 grandchildren for years to come. You can feel good about the fact you have attempted to notify the public. Like many paradigms in this world, truth can be a stranger to those who "will not see" until it is too late. God help us all.

    A. H. - Chiropractor.
    April 15, 2000

    Dear iTulip.com,

    Regarding your editorial What's Next (April 13, 2000), great article but to me the better bet is deflation.

    The Fed has been taken along for a ride with this stock market mania/globalization of the world's economy. As much as the Fed would like to believe they are the "jockey" on the economic horse they are more like a cowboy on the back of a Brahma Bull... not much of any control and most likely to get thrown off in a few seconds once the ride gets rough.

    All the ingredients for deflation are in place and notwithstanding a few blips (oil currently) that is the trend despite the fact that the money supply has exploded (almost all of this increase in money supply has gone directly into the stock market which has obviously had HUGE inflation).  Once the stock market collapses and debtors start to default on loans the money supply will collapse and so will demand for loans.  Without demand for loans the Fed is pretty much powerless to "print money"... it's the old "push on a string" dilemma. Deflation not inflation will be the result.

    I wish neither the hyperinflation nor the deflation scenario were likely but it is much to late in the game to prevent economic disaster.  That to me that is the most unfair thing of all.  The people that create and participate in these manias will be hurt but so will everyone else.

    April 15, 2000

    Dear iTulip.com,

    Regarding your editorial What's Next (April 13, 2000), great article...these are the imbalances that our dear fed chairman speaks of so elegantly (ha ,ha) It is hard to image the US economy suffering emerging nation capital flight, but it is a very real possibility. Where is Larry Kudlow when you need him?

    April 14, 2000

    Dear iTulip.com,

    I am a long time and frequent visitor to your site.  I have benefited greatly from the perspective and insight provided here and am grateful (even though you haven't updated the monthly letter from the Prez).  You are certainly entitled to take a bit of pleasure in seeing many people out there get their "comeuppance," especially
    those who probably kept telling you that you just don't get it. You have helped me to develop a sound investment philosophy that kept our family avoid the temptation to jump in with the rest of the crowd to chase after overvalued technology and internet stocks. Not that we didn't feel a little pain this week...

    I am very interested in the question you raise about where we go from here.  What are the ramifications of the burst in the bubble.  I still think there are some good undervalued "old economy" stocks out there that are worth buying and holding.  I think disciplined value funds like Longleaf Partners will have their day.  Do you?  In addition, I agree that our low savings rate, current account deficit and high debt levels will likely lead to a decline in the value of the dollar.  What investment positions do you take based on this belief?  Do you buy the euro currency?  Invest in a mutual fund like the Tice Prudent Bear Safe Harbor Fund?  Invest in Canadian companies?  Are there warrants or other instruments that would benefit from a declining dollar?

    I realize that you probably are not inclined to give investment advice, but any suggestions, articles, references etc. would be appreciated.  And keep up the good work!

    April 14, 2000

    Dear iTulip.com,

    Thanks guys for letting your readers prepare for today - and whatever happens next week!

    Especially today, yours is a great web page.

    Alec N. Salt, Ph.D.    Associate Professor
    Department of Otolaryngology
    Washington University School of Medicine
    April 14, 2000

    Dear iTulip.com,

    I would like to recomend a stock of the month: NETJ.COM (NETJE). Price of the stock went up from below $1 in January to $8 in March. Things like that happen, especially in the New Economy.  However, investors maybe didn't read the company's profile:

    "NetJ.com Corp. is a development stage company that currently has no business. Its business plan is to seek one or more profitable business combinations or acquisitions to secure profitability for shareholders. It has no day to day operations at present time. For the 9 months ended 9/30/99, the company reports no revenues. Net loss totalled 5K. Result reflect the fact that the Company is not currently conducting any kind of business."

    Viva la New Economy!

    Voytek Wieckowski (w_wiecko@colby.edu)
    April 6, 2000

    Editor Replies: Hey, no one cares about the business, just the stock optics.  Is it in a "hot" sector?  Is the news flow good?  Does it get good message board coverage?  Clearly this justifies its $59,500,000 market cap.  A true iTulip.com company!  Thanks for searching out this beauty.

    Dear iTulip.com,

    I think there are some errors in the Internet stock price table in your "tech stocks, then and now" page.

    Large-cap issues such as AMZN, AOL and ATHM have split since their highs, so the drop is calculated incorrectly in those cases.

    In many other cases, the devastation is just as bad as the table indicates.

    Aside from these minor errors, your website is very interesting.


    April 5, 2000

    Editor replies.  Appreciate you pointing out the error. We fixed it.  Thanks to comments like yours, our site keeps getting better.

    We knew we'd get some angry email when the collapse of Internet stocks finally began.  Our expecation has not been dissapointed.  Here's an example from a writer named Sid, starts with our quotation yesterday of Michael Graham.

    Dear iTulip.com,

    "We believe we are at the bottom of this correction in Internet stocks."
    - Michael Graham, Robertson Stephens Internet analyst, Mar 31, 2000
    You mock him, but what about YOU?
    "We believe we are at the top of the net bubble."
    - the stupid idiots at itulip.com  Sept 1998 when YHOO is at $2
    You have a lot of nerve   You missed the whole party you stupid dumb jackass...

    April 4, 2000

    Well, Sid.  If you read the site you'd see we didn't call a top in 1998.  We did say that the risk of a crash was present at that time but that we didn't know when it would happen --  speculative markets can go on for years and years, depending on psychology and market liquidity.  As with all Ponzi schemes, the first players make lots of money.  The last in get killed.  Some folks got out in time and made a lot of money.  Maybe you did.  Good for you.  Many didn't and are getting slaughtered now.  In fact, if you sold recently then you have their money.  And the slaughter isn't over, not by a long shot.  (See Tech Stock Speculation, Then and Now.)

    And no, Sid, we don't appreciate the prognostications of self interested parties that encourage uneducated investors to gamble money in a speculative market, especially when the evidence is strong that the party is over.  If Michael's encouragement to invest were accompanied by an equally strongly stated explanation of the risks, we'd be okay with it.  But if he did that, no one would invest, which is why he doesn't.

    Dear iTulip.com,

    The "New Economy" is like a "New Woman" who has had her hair done, face done, and breasts changed and also bought a new Gucci outfit. When she takes her clothes off she is still the same woman - underneath - and as she ages her breasts will return and her face wrinkle. So she has bought some time but the new economy is only waiting to return to its former self. Clinton in India is sad because everyone thinks that the "old economy" where people need water is over.

    Roy Eskapa
    March 25, 2000

    Editor Replies: That's an interesting way of putting it, Roy.  There is in fact no New Economy, only incremental technological improvement to The Economy.  This is not to say that the efficiencies thus realized are insignificant.  Railroads greatly improved the efficiency of commerce in the last century and the Internet will improve the economy and expand the capital pool as well.  This tells us that bet on a growing world economy is a good one, assuming certain potential set-backs, such as a political crisis in Asia, are short lived.  Toffler reminds us that the introduction of new technologies that change the world economy are attended by periods of political instability, as old power relationships among nations shift on the changing foundation of relative economic advantage.  One can see this in the relationship between Japan and the US.  In the pre information age, Japan competed successfully with the US.  Now the US has a significant advantage in information technology.  Toffler's thesis is that WWII was the result of competition between lagging agrarian based economic powers and growing industrial powers.  If true, one wonders what dislocations are wrought by the transition from the industrial to information age.

    We also appreciate your point about new technology not feeding the poor.  In fact, the rise of the information age seems to decrease the wide distribution of wealth further.  Paradoxically, during periods of economic recession more political attention is paid to the problems of poverty than in periods of prosperity when all eyes are on the seemingly endless river of money and the attention of the crowd is focussed on conceiving of ways to dip a bucket in to get a share.

    Dear iTulip.com,

    Well done, treasure trove of usefull information and insights to counterbalance the herd mentality of 'analists' and new paradigm advocates.

    I hope you will help save a lot of innocent investors from financial catastrophe and or least help them become aware of the unsustainable nature of the current stock market boom.

    March 18, 2000

    Dear iTulip.com,

    I am a careful stock investor from Singapore.  I am very pleased to see that somebody has finally said the truth about the Internet Stock Mania besides a book I am reading called The Internet Bubble.

    Well, I believe eventually this bubble will burst maybe this year or early next year.  Probably the NASDAQ will trade below 1000 points -- back to its 1992/93 level.

    I feel sorry for those geniunely good internet companies or related companies like Amazon, I2 Technologies, Charles Schwab, Siebel, CommerceOne, etc., which will eventually be dragged down along with it. This imminent stock crash will have a great impact on the whole economy of the world not just the United States. And it will also inhibit the technological advance growth we would have enjoyed!  Many people will lose their jobs, companies will lose alot of money, and the whole world will be dragged into a "black hole" of
    recession which will take many years maybe 5-10 years to recover.I only hope the authorities like Fed will intervene and adjust their monetary strategies properly to enable a softer landing of the crash.

    William Leo
    March 15, 2000

    Editor Replies: You're doing well by reading The Internet Bubble.  We're big fans of the boys over at Red Herring, Tony and Michael Perkins, and feature their book on iTulip.com's index page.  Michael constantly sends us great stuff to read.  Of course, both Perkins' have iTulip.com Preferred A Stock Certificates.

    Your comments about I2, Siebel, et al, are interesting -- we' like these companies as well.  It's always the case that the good are thrown out with the bad in a broad liquidation, the question is will the correction be a 1998 repeat or a 1987 repeat or a 1929 repeat, or something completely new and different.  I guess we're more optimistic about the aftermath than you.  Assuming the current level of cooperation among monetary authorities worldwide remains constant, a recovery will likely be more speedy than ten years, although a recession less than three years long seems unlikely.  2000 is not 1929.  The many errors that were made that will not be made again.  Of course, there will plenty of opportunities to make new errors.

    Dear iTulip.com,

    You brag about calling this in Jan 1999?  Are there DUMBER people on the face of the earth than you?
    You've missed the gretest (sic) rally of all time, you buffooon....and you brag about it?  Hahahahahhahah.

    Even if the market tanks 50% overnight, the bulls are WAAAAAAY ahead, and bulls have cashed out a lot and bought Porsches (at least I have).  I am still long 50%.

    March 14, 2000

    Editor Replies: The lady doth protest too much.

    Dear iTulip.com,

    Love the site, guys!

    But can you explain: If most stocks are down so sharply , how are we in a bubble?

    And do you have any stuff on the site that gives a flavour of what it was like to be an ordinary investor in 1929?

    Toronto, Canada

    Editor Replies: Sharply from their highs?  No, you are seeing only the the early stages of liquidation.  Internet stocks are down only 30% to 50% from their peaks.  When a bubble is finished popping, stocks fall 80% to 100% from their peak values.  How does a stock lose 100% of its value, you ask?  How does a company with no profits stay in business when it cannot raise further capital from private or public markets to fund operations?  The answer is that it cannot.

    As far as the experience of the average investor in 1929 goes, let's just say that it was unpleasant but the jumping out of windows tales were tall -- never happened.  Still, a lot of hardship resulted and if we have encouraged any visitors to the site over the past two years to exercise prudence that puts them in a better position to take care of themselves and their families then we are gratified.

    Once the bubble finally does pop, you will see an immediate change in the tone here at iTulip.com.  There's nothing funny about losing money, nothing amusing about suffering.  Our approach will change form warning investors away from the bubble to encouraging them to ignore the media's barrage of post-crash end of the world hype and focus on what's real about the great and unique technological, economic, and political advances of our time.  We're contrarians, not bears.  Check out our Y2K advice from August 1999 as evidence:

    "After the clocks roll over into 2000, a lot of crappy software that doesn't work very well and breaks all the time will continue to be crappy and not work very well and break all the time.  Y2K bugs have been around for decades and they've been getting fixed for decades.

    "A program running in 1989 that calculated the 20th year principle payment on a 30 year mortgage had to do the math based on a 2009 date way back then, ten years ago.  As time goes on, programs run into Y2K bugs.  Not all at once on January 1, 2000 but at various times.  So Y2K bugs make applications break the same way programmers are used to seeing them break -- all the time.  Constantly.  Thus, they get fixed constantly.  The only programs that will have a problem are those that never have to deal with a 2XXX date until they are running in the year 2000.  Those are the ones that are getting fixed in a hurry.  Even if the bugs aren't fixed before Y2K, most bugs will get fixed as they show up, as usual."

    Dear iTulip.com,

    I love your site.  There is so much information that it is almost overwhelming.  I confess, I think that I may be a "sheeple" regarding my 401k.  Do you hate me?  Thanks for listening.

    TX, USA
    March 8, 2000

    Editor Replies: We are motivated by a sense of responsibility to our fellow men and women as were the Dutch citizens who printed pamphlets in the 1630s to warn of the dangers of tulip bulb speculation (see iTulip.com Background).  We don't hate you.  Quite the opposite.

    Life rewards action.  Use your good sense.  Do you think stocks that have risen much faster than earnings will do so forever?  Don't worry what anyone thinks or about what you're told by financial services companies selling investment products for profit.

    Dear iTulip.com,

    You should provide an easy way to advertise the site to others.

    Charlotte, NC
    March 3, 2000

    Editor Replies: We try to be responsive to our readers... we have added 

    buttons to the site to make it easy to forward pages via email.  Thanks for the great idea.

    Dear iTulip.com,

    A great site.  However, the U.S. investor has never been nor will ever be brought to his senses by a well crafted and not too subtle web site.  He will unfortunately change his investment style only after the proverbial bull is out of the barn. Keep up the good work - there may be some saved yet.

    Baltimore, MD
    February 28, 2000

    Dear iTulip.com,

    I hope, Mr. Tulip, you're not in the money management business, cause you just don't understand the new world of investing and business in America today.  You just close your eyes, buy a .com company, and wait.  It's magic!

    February 26, 2000

    Editor Replies: If you believe you're investing by buying .com companies, I suggest you hold your nose, put $10,000 of your retirement money on Akamai, and wait.  In two years send us an email and let us know how you feel about owning shares the Austin American Car Company of the 2000s.  Good luck!

    Dear iTulip.com,

    I have to report that I have succumbed to the dark force of "momentum" speculation. I have grown frustrated seeing the undervalued value stocks stay undervalued, while loony companies like Buy.com sell at insane multiples.

    So I decided to follow the herd (well, not exactly follow, but to be in the herd), and I bought stocks like SCMR, and AFFX -- co-creators of the blissful future -- and so far Ive done well.  Now I am a proud participant in one of the greatest pyramid schemes of our times. (Poor Albanians, they thought they were the masters of pyramids.)

    The reason I am writing is that sharing my experience makes me feel less guilty for abandoning common sense and reason and becoming Pavlov dog-like.

    Los Angeles, CA
    February 22, 2000

    Editor Replies: Nothing wrong with speculating in stocks or gold or biotech or beenie babies.  In fact, sector rotation into beenie babies is expected shortly.  You heard it here first!  The problem is doing it on too much margin, or with your home equity loan, or your retirement money.  All the worse if you're speculating on margin, with your home equity loan, or your retirement money and you mistakenly believe you're actually investing.  You've been told that stocks go up in the "long run" and that's true, but if the "long run" includes a period of depressed stock prices in a bear market that extends beyond the period when you need the money, you're in trouble.  If it's 2000 and you're kids are due to go to college in 2005 and the kids' college money is in the stock market which is down 50% or more until 2010 (using the Japan bear market duration as an example), then your kids aren't going to college.  As for your bets on AFFX and SCMR, as the dealer at the black jack table says after dealing out the cards: "Good luck."  There's lots of money to be made and lost in a speculative market.

    Dear iTulip.com,

    I just read the book "Random Walk" and I was wondering if you know where I can get a deck of the "South Sea Playing Cards".  I checked e-bay, no luck.  You probably think I am nuts, but I think they would be a great collector's item.

    February 22, 2000

    Editor Replies: A genuine deck of South Sea Playing Cards is worth a fortune today.  That's the idea behind the iTulip.com stock certificate.  In the year 2050 it may fetch $1,000,000 (that's $9.95 in 2000 dollars adjusted for 50 years of inflation).  You'll buy it at auction by thinking you want it, conveying your purchase decision via a wireless device implanted in your skull that communicates with a network created by the post WWIII world government, which has been privatized and is run by Microsoft.  Hey, this would make a great movie.

    Dear iTulip.com,

    iTulip.com is breath of flower scented air!

    February 22, 2000

    Dear iTulip.com,

    Nice to hear a voice of reason in a sea of high pitched emotional insanity.  Stay the course.

    February 22, 2000

    Dear iTulip.com,

    As of today, 2/18/00, I think much more highly of your site than I did yesterday.

    But when the Dow reaches 750,000, a lot of people are going to tell you how wrong you were.

    San Jose, CA
    February 18, 2000

    Editor Replies: The DOW will reach 40,000 and 100,000 some day, but not in five or even ten years as some suggest.  It certainly won't get there in a straight line.  The Nikkei was ten years ago at 39,000 and is still unable to maintain over 20,000.  Similarly, the DOW will fall significantly before necessary structural changes occur in the US economy that permit the US stock market to resume steady increases that reflect real economic growth.  A significant recession combined with high inflation will accomplish the reduction of private sector financial debt so that it's back in line with the historical average of 1% of GDP over the past 50 years versus 5% today.  In addition, America's current-account deficit needs to fall back to under 2% of GDP from the historically unprecedented 4% of GDP today.  You may be right, though.  With 10% annual dollar inflation after the bubble pops, the DOW may reach 100,000 sooner rather than later.  Of course, a cup of coffee will cost $100, but I guess that's a small price to pay for rising asset prices.

    Dear iTulip.com,

    Poco a poco se aprende mucho.

    February 17, 2000

    Editor Replies: Translation for non-Spanish speakers: "Little by little much is learned."

    Dear iTulip.com,

    I found the site fascinating. I have been waiting for the other shoe to drop for years.  As I tell friends, "It's not a matter of can it happen, but a matter of when."  I am amazed they have been able to keep it going so long.I do think you did miss one contributing factor, though.political manipulation and interference. This is an election year and I believe that both political parties will go all out to try to keep the charade playing so as to make sure that they are electable(or re-electable).The real bombs should go off at the end of this year or in early 2001.

    Livonia, MI USA
    February 16, 2000

    Editor Replies:  Speculative markets are built on a confidence that allows one hundred million head of investors to perceive little risk where this is much.  Primarily the confidence comes from participants' intuition, which misinforms them that the more humans involved and the longer a mania runs the safer it is to be in.  Of course, the opposite is true.  But aside from this natural social dynamic, a mania is further developed and maintained by the tacit cooperation among its prime beneficiaries.  The winners of the earlier stages of a mania become its boosters and architects in the latter stages -- in this case the brokerage firms that sell the investment products, the media personalities and analysts who build their careers on reporting on the mania, the venture capitalists that fund the companies that investors are betting on, the investment banks that earn fees on IPOs, and of course the politicians who enjoy the enormous tax revenues thus generated from extraordinary capital gains.  While we make no claim to know the terminus date of this mania, we assure you that some day we will witness an event amusing but that it occurs in an atmosphere of panic and tragedy, the wholesale repudiation of support for the stock market by many who now are its key proponents.  Thousands of mania fans post crash rush to create as much distance as possible between themselves and the stock market, deriding contemptuously as dead the very asset class they before anointed with immortality.  Whether land or gold or stocks, the object of a mania becomes as vilified as it was once deified because after the unwitting investors get creamed, no one wants to be left standing as the lightening rod for their wrath.

    Dear iTulip.com,

    I am a CPA and was thoroughly amused by your site.  I have been bearish and wrong for five years.  What else is new?  Why INFY, a real company, by the way is worth 900 times earnings is beyond me.

    February 16, 2000

    Editor Replies: You aren't wrong, you've chosen not to participate.  We each have different risk tolerances.  You don't like playing a speculative stock market, even though there is a lot of money to be made... and lost.  Other folks don't mind.  But most don't know that that's what they're doing.  Eventually they will find out.

    Dear iTulip.com,

    TERRIFIC! :-)

    February 16, 2000

    Dear iTulip.com,

    This site is wonderful. You need now a message board for all of us, and when our site will be launched I hope it will be as good as yours, hot@harborside.com.

    February 16, 2000

    Editor Replies: We have a message board but it's clearly way too complicated to use.  And it's the third one we've tried.  If you and any other reader knows of a good one -- simple to use -- please let us know.  Thanks!  And we look forward to seeing your site, harborside.com.

    Dear iTulip.com,

    In a special edition of Forbes, a Mr. James Michaels refers to your site and a "bloodcurdling quote from ex-Fed Chairman Paul Volcker."  I have looked your site over and cannot find such a quote.  Can you be of assistance?

    February 15, 2000

    Editor Replies: The quotation heads the site page titled Suggested Reading.

    Dear iTulip.com,

    I like it. Do you expect the "cowcawki" (the collapse of western civilization as we know it)?

    February 14, 2000

    Editor Replies: Fin de le Monde?  Nah.  The world keeps changing, but it ain't gonna end.  The US is prone to excess, it's in our nature, but we're also quick to face up to a crisis and resolve it.  Our post-bubble crisis won't drag on for a decade as Japan's has.  We'll take our lumps and carry on.  But keep a few bucks set aside for a rainy day.

    Dear iTulip.com,

    I love the site and have been a big fan from the beginning.  It has helped me to keep perspective and sanity. My goal has been to focus on the difference between investing and speculating.  The site has helped.  I appreciate the frequency of the recent updates.  I also enjoy the personal notes from the founder and miss the monthly letters.

    Columbus, OH
    February 13, 2000

    Editor Replies: Thanks for the kind words.  They keep us going.   When "reputable" American brokerage firms advertise day trading during the Super Bowl as a road to quick riches, no one in the US can be blamed for losing the distinction between investment and speculation.  To us, investing is the purchase of capital assets for the purpose of realizing a given return net of inflation at a given level of risk over a given period of time, and speculation is the purchase of anything in the hope of selling it later at a higher price.  We'll try to get Arnold to write his letter every month like he's supposed to, but it's like trying to get the dog to the vet for his shots.

    Dear iTulip.com,

    I have been visiting your site once or twice a month for about six months.  You are doing a great job... I've learned a lot.  Just the other day, while I was filling my gas tank at a rate of $1.42 per gallon, I was thinking how very strange it was that no one seemed to find this situation alarming. So I was very pleased to see comments here regarding and acknowledging the effect of rising energy costs.  I live in Alaska.  I was saddened by the ease with which the Exxon/Mobile merger was accomplished.... we in Alaska wonder whether the BP/Arco merger can also
    take place... anyway, keep up the good work... it is appreciated.


    Alaska, USA
    February 12, 2000

    Dear iTulip.com,

    Your site is very worthy.

    Broadway near Wall Street
    New York, NY
    February 3, 2000

    Dear iTulip.com,

    Your site is excellent...I try to check daily.

    Peoria, Il
    January 25, 2000

    Dear iTulip.com,

    Very entertaining and witty. Keep up the good work. Every scam must be uncovered in the end.

    Joe Esposito

    Burlington, Ontario
    January 20, 2000

    Dear iTulip.com,

    This site is a necessary dose of reality for all the investors and their eager advisors who believe trees grow to the skies and even to the stars.

    Westlake Village, CA
    January 10, 2000

    Dear iTulip.com,

    When is itulip.com going to the market?

    Hampshire, UK

    Editor Replies: If you look at December 1999 Monthly Letter from the Prez, you'll see that an IPO* is planned for this year.  We're still filling out the management team to improve the marquee, and with the help of our new investors, Porcine Capital Partners, we're locating a suitable investment bank.  Keep and eye on EDGAR.  You never know.

    *Idiotic Public Offering

    Dear iTulip.com,

    I like the funny view of being contrarian.

    January 11, 2000

    Dear iTulip.com,

    Great site.  Content is dead on.  This market will roll over.  Probably new highs on the tech indices first, then correction of 50% or more.  Economic impact will be substantial.  Greenspan must be worried now that he's let this go on for so long.  If he pops it he might just be remembered as the Fed Chairman who presided over the greatest recession since the Great Depression.

    Anyway, enough of my opinions.  Your site is a great and refreshing view in this otherwise crazy market.

    Minneapolis, MN
    January 10, 2000

    Dear iTulip.com,

    You may want to add a link to the article in todays Sydney Morning Herald to your list of daily articles.

    Wading through media myths and dead cats

    Great site - thanks.

    January 10, 2000

    Editor Replies:  Thanks for sending on the excellent article to us.  Contributions of articles like these from our visitors  help make iTulip.com a source for timely and compelling market mania information.

    Dear iTulip.com,

    This is one of my favorite bear sites on the internet.  I check it a couple times every day.  Through your objectivity, I've come to realize that there is no single culprit - not the Fed, the SEC, accountants, the media, IPO specialists, venture capitalists, hypsters or the dot-com founders (who, I might add, all have regular jobs), but certainly there can only be one victim - the investor (who has made it clear that he will go to any length to give up his day job).

    Washington DC
    January 8, 2000

    Letters from Late 1999

    Dear iTulip.com,

    Congrats on your site from Paris, France. Being half Dutch (and half French), I'm quite aware of the tulipmania that ruined thousands of my fellow countrymen then, but tulips survived and became an important export for the country.  Likewise, I believe the Internet will survive as it is a real innovation, albeit millions of "greater fools" Internet stock  buyers will lose their shirts in the process...

    If you're interested in a link to an article I recently wrote (in French, sorry...) in "La Tribune" (the French equivalent to the Wall Street Journal)on eBay's nutsy market valuation, let me know.

    Keep up the good (sense) work!

    Paris, France
    July 1999

    Editor Replies: Yes.  Please send us the link.  Thanks!

    As per your request, please find below how to retrieve my article on eBay in the Internet archives of the French business daily "La Tribune":

    1/ Click on the following link: "http://www.archives.latribune.fr/archives/archive2.html"
    2/ Type in the left top corner (search word box): Nijdam
    3/ Type in the "date" box: 01/06/99
    4/ Click on Search button (bottom left)
    5/ Click on the highlighted article called "Les valeurs Internet, un véritable Las Vegas en ligne".

    Dear iTulip.com,

    I like your site very much, but I wonder if you know where I could verify this claim:

    "Dell Computer earned $2.5 million over the last three years selling computing equipment, according to Forbes' ASAP magazine.  But that's nothing compared to the $3.1 billion Dell made selling "puts" and buying "calls" in its own stock."

    I thought a company trading derivatives of its own stock was against the rules.

    Thanks, and thanks for the great site.

    St. Petersburg, FL
    June 1999

    Editor Replies: This practice is documented in the April 4, 1999 Forbes ASAP article Show Me the Money: Hold on to Your Dice... Dell makes more money gambling on its own stock than it does selling computers. While intuition informs the average investor that this ought not to be allowed, be assured that it is.  A perfectly reasonable argument can be made for allowing a public corporation to hedge using derivatives, in fact one can argue that this is a responsibility of a company to its stockholders.  However, when the objective of the derivatives plays are not hedging but profit, Dell and others at least need to make their stock holders are aware of the risks.

    Dear iTulip.com,

    The internet mania has only involved a relatively small number of investors, while in the end the large majority of them may loose money this is no reason why a wary investor can not make money by investing in them. The thing such an investor has to do is to get out before the herd does. I think the herd is starting to move.

    The mania which is of  more concern is the 401k mutual fund mania. This saving plan for retirement is bringing in more money than ever before.  This money comes in faster than business can add value. Since the money must be invested prices of stock are driven up in order to invest the money.  At some point these investors are going to be outnumbered by those who must withdraw the money for retirement and prices will level off and then go down. When the herd recognizes that stock prices are falling and not rebounding there will be a price crash.

    One only has to look at the Japanese stock market history to see what the future will bring. The problem remains that the stock market is the only game in town if one expects to make a large return on investments. The investor must keep in mind that if he moves with the herd he is going to get slaughered.
    May 1999

    Editor Replies: At first the lamb does not know he is in a flock.  Later, the lamb may think, "Ah, I am in a flock, but I will get out before the others when the wolf comes."  It is the nature of manias that at the moment one lamb becomes so self-aware, the whole flock becomes so at more or less the same time. Call it "smarter lamb" investing.

    On 401K, fund managers are charged with the ignominious task of channeling the fire hose of cash that comes their way via 401K accounts into already highly overpriced "safe" stocks or lose their jobs for sitting on too much cash.  The tendency is to put more and more funds into a diminishing number of stocks resulting in imbalances in asset class values not seen since the 1920s.  We don't think investors will have to wait for Baby Boomers to retire for the Nikkei effect to occur; the world financial system was relatively healthy in the early 1990s when the Nikkie crashed whereas today one of a hundred global trouble stops might set off panic selling.  Of course, the Japanese had $4 trillion dollars in net savings independent of stock "wealth" to fall back on after their market crashed and then their economy sank into recession.  Depending on which government statistics you read, 60 to 80 percent of Americans are two paychecks aware from insolvency, and if not for their stock market "wealth" more than 50% of Americans are net debtors, their liabilities greater than their assets.  The Japanese have it easy.

    Letters from early 1999

    Dear iTulip.com,

    Hey, great site. A witty approach to what may well need some levity in the not too distant future.

    The Internet phenomenon is akin to the beanie baby craze which is a direct descendant of the tulip bulb mania.

    Thanks for the 'bumper dumper' link. It is hilarious.

    Dann L.
    Lyons, CO

    Dear iTulip.com,

    Excellent! Funny! Bookmarkable.

    Greg Howe
    Lake Oswego, OR

    Dear iTulip.com,

    This is the best thing since Prozac!  I've sent your site to all my
    sick friends who invest as I do...well.  These times, they are a changin' and
    for the better.

    Why don't you make the Stock Certificate as a PrintOut like a coupon.  Then we
    could inflate the price and make money on the aftermarket..i.e. Bogus Stock
    Certificate Frames, T-shirts etc.  Could be a BoGus Broker, as it were.  This is
    going to be verrrry BIG!  Love it!

    Visalia, CA

    Dear iTulip.com,

    I'm thrilled to have found the site of your parody!
    Thanks for the reminders.

    Ron Koyich

    Dear iTulip.com,

    What's in a bubble ? That which we call a tulip, by any other name -- could smell as sweet...to a seller of shorts.

    As Solomon averred some three thousand years hence, there is indeed nothing new
    under the sun. This financial carbuncle, however, shall undoubtably take the
    entire United States' economy with it.

    Saugus, MA

    Dear iTulip.com,

    Congratulations, is a good place to visit.

    Jose Angel Martinez Borja
    Mexico, City

    Dear iTulip.com,

    For the successfull investor, the site not to miss.
    Tom the pretty
    Sydney, Australia

    Dear iTulip.com,

    I got a real kick out of your site and especially the Elmer Fudd translation. Now, find a Mac in your office, go to the Fudd page, select all and speak text. I found myself on the floor! I'm sending a bookmark of your site to all
    my friends.

    Thanks for the laugh,

    Editor Replies: iTulip.com has Mac PCs as well as the Soviet imitation created in Redmond, WA.  We tried your idea but tried to stay standing since we spend a fair amount of our time on the floor as it is.   Great idea. Thanks.

    Dear iTulip.com,

    Hi guys, just visited after cnbc gave you a BIG pitch this a.m.    Kudos on a brillant and sophisticated  stab at net mania.  Some of the people in this country will not get it..... their loss!!!!!  thanks a bunch
    Pasadena, CA

    Dear iTulip.com,

    Great Stuff!  I'm advising all my clients to look in  What's my cut???

    Waddya going to do now that you've hit the "bigtime" (heard about you on

    All kidding aside though, you are really doing a lot of people good service
    by prodding them into taking a sober second look at how they invest their
    life savings...

    Nice to see

    R. B.
    Nanaimo, British Columbia

    Dear iTulip.com,

    I have been trying to get into Datek for almost three hours this morning. When you try to reach them by phone, of course their line is busy. I am unable to execute any trades, and unable to speak with anyone.  My frustation is at the boiling level. This has happened several times before.  Can you get the story on this?????????  I can't afford to trade with Datek any longer. I will be out....as soon as I can get in!!!!

    Editor Replies: While we were covered by CNBC, we don't have much influence to get them to cover the Datek access story for ya.  If it's any consolation, It looks like all the online trading companies are taking turns with outages.  New technologies have always had unexpected effects on markets during corrections.  The London discount house Overend Gurney collapsed on Black Friday (May 1866) when the new technology of ticker-tape proved to be a double-edged sword.  Unlike previous market corrections that tooks days or weeks to develop, in May 1866 global markets began to crash within minutes.  In the 1920s, the crash was partly fueled by the perception that "the ticker slowed."  Might today's online traders keep placing online market orders to sell if the Internet slows while rumors of a crash are flying?  While the Fed was delighted in 1987 to use their new digital transaction processing systems to provide liquidity by pressing a few buttons to keep brokerages solvent during the crash, this time they'll face off against five million online traders with buttons of their own, sucking it up.Or the online brokers can shut down their trading systems and get five million traders feeling the way you were when you wrote this e-mail to us: panicked and PO'd.  Not an enviable choice.

    Dear iTulip.com,

    Hey guys,

    GREAT site!  It is hilarious...hopefully some folks will check it out & learn

    I know it was a joke, but having shorted YHOO back & forth & having some naked
    calls out on it now...& living in agony then ecstasy then agony etc etc etc...
    having a tulip.com stock certificate isn't a bad idea.  Maybe you guys could
    actually do some real commerce.

    Couldn't be hard or expensive to have a certificate-looking certificate
    printed that was fun & funny.  Put a hyperlink on your website to go to to buy
    it.  Be sure to put a phone # too...I always prefer to call where my credit
    card is involved.

    Earnings would be chump change...but hey, you never know....CNBC mentioned you

    Thanks again. Great stuff at your site!

    M. H.

    Dear iTulip.com,

    Congratulations.  I have lost real money in the stock market and I was a STOCKBROKER.  I have learned that one can understand stocks, companies, etc.  However, understanding markets is always elusive.  The facts need to be told lest the unwitting lose more and more $$$ to the sharks.  Your effort is based in truth, and for that reason alone is commendable.  The additional benefits are going to be many to those wise enough to pay attention.  One of my colleagues once said, "We have two kinds of clients, those who are gambling and those who don't know they're gambling."  (He lost a lot, too in 1987.)

    Thanks for a fine web page.  Please continue your commitment to the public good.

    Dear iTulip.com,

    I think you guys are right on the money.  I am actually tempted to buy your stock certificate so I could put on a wall as a little reminder of Internet craze.  Great Job!!!!!!!!!
    Editor Replies: That's the whole idea behind the Bogus Stock Certificate, to hand down to keep as a momento of this zany time.

    Dear iTulip.com,

    Refreshingly innovative. Visually very pleasant.  Well written with Churchillian clarity.  Interesting contents, like link:
    http://www.adtrading.com/adt12/crashaz.hts  Excellent selection of linked stories supporting your website's main theme.

    Overall on a scale of 1 to 100, I give you a 95.

    P.S. http://www.itulip.com/bizplan.html  very witty.


    Dear iTulip.com,

    Spinning heads are ok but Mug Shots would be better!
    Timely parody of a screwed up market!

    Dear iTulip.com,

    At first I thought your haikus of the day were going to be a waste of a click, but they were surprisingly funny and inciteful!  If we can just stop and smell the tulips...

    Dear iTulip.com,

    Love your site, but I can't read the orange - on - pink print!!!!
    Editor Replies: Do you have your monitor set in whacky colors mode?  Everyone else is reading black-on-yellow :-)

    Dear iTulip.com,

    You guys are right-on.  I'm recommending your site to my kids & my son-in-law who are all too young to remember historic dates like 1928.

    Keep up the crusade. Looks like some folks are listening to you judging by what's happening to the nasdaq today)

    U. T.
    Editor Replies: Hey, we don't want the thing to crash.  But we'd like our readers to be he lucky ones in one of the empty chairs when the music stops.

    Dear iTulip.com,

    How do I buy your stock?


    Dear iTulip.com,

    You ask whether Internet stocks will rise or  fall.
    I can tell you from empirical evidence
    1) An Internet Stock will  quintiple if I sell it short.
    2) An Internet Stock will  dive if I buy it long
    There's no other rhyme or reason to it. It's as simple as that!
    Editor Replies:  Kind condolences from iTulip.com.  Many good and brave short sellers are carried out of a stock mania feet first before it's over.  Mania rule #1:  a stock that's the object of mania buying at any given time is more likely to continue up than fall.  Mania rule #2: Manias always last many times longer than anyone expects.  This is essential, since for the buying dynamic to develop into a mania it must persist to the point where nearly everyone becomes convinced that it's not a mania but something else.  About the time the last short seller gives up, the mania ends.  No one knows when this will happen.  All that is known is that it will.  One sign that this mania is near its peak is that Alan Greenspan, the nation's icon of financial reason, has recently located a justification.  A very bearish sign.

    Dear iTulip.com,

    I think you are personally responsible for the internet stock collapse.  Please have your lawyer call my lawyer so they can
    do lunch.
    p.s. Just kidding.  Great stuff!

    Dear iTulip.com,

    Nice work you hosers. I've been saying for years that this internet craze is like the tulipmania of the 17th century, you pricks probably just heard me say it in a chat room and are trying to get rich quick off my idea.  Send me some money or I'll never talk to you guys again.
    Editor Replies: Ok, we won't send you money.  Looks like we got a deal.

    Dear iTulip.com,

    You guys should keep a chart of the IIX (internet index traded on the Philly exchange) on your site; its about to break its 50-day moving average. When it does....look out!!!! great idea by the way on this site; wish I cam up with
    Editor Replies: It's already listed at the top of the page at http://www.itulip.com/maniaupdate.html.  Good idea, tho.

    Dear iTulip.com,



    Editor Replies: If 10% of all those who visited iTulip.com in the past two days (2/10 - 2/11) bought an iTulip.com Bogus Stock Certificate, we'd be thousandaires for sure.

    Dear iTulip.com,

    I love the site and agree with the position you take on the current mania.  I'm curious however why you list LU as part of the mania along with listing  it as having no earnings.  Lucent has been profitable for several years with only a couple of negative quarters due to acquisition.  I'm not disagreeing that it's a bit inflated but to list it with AMZN, YHOO, EBAY, etc seems a bit extreme.   I would group it with the likes of CSCO, DELL, MSFT, INTC, IBM, etc.   which are also high but not on the same scale as the aforementioned internet stocks.



    B. W.
    Microsoft Corp

    Editor Replies: You are correct. We screwed up.  We fixed it to reflect the 52 week high of 120 with a P/E of 56.75.

    Dear iTulip.com,

    I like the redo of your page, it is less cluttered IMHO. Continue to love the sarcasm. Look forward to the 'Dialectizer' working....chuckle.

    My favorite though is the link to the Dutch pamphlet warning of the tulipmania, that is priceless. I would love a copy of that to frame and display, and a set of South Sea bubble playing cards.

    Thanks for taking the time to create your neat site.


    Letters from 1998

    Dear iTulip.com,

    Great site.. you seem to have  grip on what's not working on the Internet.. What exactly is working on the Internet?


    Editor Replies: The Internet will have a far greater impact on commerce and society than any other single invention in history.  There are hundreds of sites you can visit that will explain the promise in detail.  That's not our role.  We're the hype antidote.  The promise of the Internet does not alter the fact that no uneconomical company can sustain a high market capitalization or even survive for long.  And many uneconomical companies are relying on an association with the Internet to rationalize a higher valuation than their business model justifies, short term or long term.

    Dear iTulip.com,

    I enjoyed your iTulip.com site. Quite entertaining, but with a distinctive underlying sarcasm of truth. I like that.

    I found your site through a link today from the SuperBear site http://www.fiendbear.com/marketre.htm

    I also have a website that has delved into the Internet stock mania quite often over the past several months. I am currently trying to chronicle the "Blow-off" pattern that seems to be happening to the stock market in general. I am parallelling as much as possible with the same 1929 event. My site is at http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm

    My current view is that the U.S. stock market may be as close as a week away from topping out in a "blow-off" screaming rally, before a spectacular crash that could perhaps subside 10 weeks after the top has been made. Again, this is a 1929-parallel.

    Of interest to y'all, in 1929 the hot hi-tech stock was RCA which ran up in price from $11 to $114 in the mania - it later was worth only $3 at it's lowest point. This was for a company that actually had a product, and sales, and eventually had substantial revenues. If a real company like RCA could lose 97% of its value, then I cannot guess how much the Internet stocks can lose since 98%, 99%, and 100% are the only real choices. Well go ahead and throw a dart at it and see which of these percentage losses you hit... if you're not exactly right, at least you'll be close.

    Good luck, I hope you sell a bunch of your "stock" before the market crashes... at least by then yours and eBay are likely to have the same value.

    Dear iTulip.com,

    Back in the early seventies I built large, (28" square) wooden blocks.  I put a brass number plate on each one, wrote a brochure and created,  "Dumb Lumps."   I sold these at flea markets during the summer and paid a big chunk of my tuition that fall.  I thought I was God's ultimate creation until I found your site.  My hat's off to you guys.  You are my heroes.

    Dear iTulip.com,

    When do you plan your  IPO?!

    P.S. I like your site.

    Dear iTulip.com,

    I took a peek at iTulip and had a good laugh. Thanks.

    Dear iTulip.com,

    As one of the proprietors of an investment fund which has managed to lose prodigious amounts shorting internet stocks, I got a tremendous kick out of the iTulip site.

    Every day I tell my colleagues that their children will berate them for not having had the basic intelligence to short these stocks.  What these little ingrates won't understand is the gut-wrenching fear of watching Amazon's market cap go up by billions of dollars an hour, or the difficulty of making money from the inevitable fall without getting wiped out before the top.

    I'd buy a certificate except I can't afford it...

    Thanks for a glimmer of sanity.  We were getting pretty lonely.

    Dear iTulip.com,


    Don't you go and ruin it!!!!!


    Annoying, negative e-mail from losers

    You're (sic) site sucks, but your knew that.

    Go shoot yourself in the foot. You have no idea about what you are talking about.

    Hi, this is cute. Being familiar with the tulip mania of the 17th c., i can see how you would draw this analogy. But you do not seem to be making any distinction between the good technology companies out there today and the junk!!!! Why do you put them all in the same category? How shameful -- you're not any better than the junk internet stuff out there!!!

    Editor Replies: We are proud that we're no better than the "junk Internet stuff out there."  In fact, that's our mission.  To be no better and, if we can rise to the challenge, to be considerably worse.