Nasdaq 5,000: 10 years later

Ten years ago Wednesday, the benchmark index of the Nasdaq marketclosed at its all-time high the prelude to a spectacular dot-combust that saw technology stocks plunge.

A decade later, the sectoris still trying to recover from the carnage that wiped hundreds of billions of dollars from the portfolios of investors.

On March 10, 2000, the Nasdaq composite index ended the day at 5,132. Justseven months later, it had lost 78 per cent of its value. These days, it has managed to crawl back to 2,355. That's stillalmost 55 per cent lowerthan that all-time high.

Ten years ago, the investing atmosphere surrounding many technology stocks was nothing less than frenzied. The usual market metrics, like price-earnings ratios, were ignored by analysts and investors who infamously declared that "new economy" stocks couldn't be judged by the old valuation methods.

Anyone who dared question the rationality of the Nasdaq's stunning rise was ignored. A business professor quoted in a story onCBC-TV's The National a decade ago warned that people could lose a lot of money on tech stocks. "When things are at the top, it's very dangerous, because chances are it will go down," he said.

Did it ever.

Itdidn't take long before business models began to collapse. Revenue growth flattened and then turned negative. The market woke up to the realization that stock prices aren't driven by hype or momentum, but by future profits.

Remember these stocks?

724 Solutions, a network and data service company,was regularly gaining $20a share back then, pushing the stock price ofthe former dot-com darlingclose to $300. By 2006, the stock was delisted from the Nasdaq.

JDS Uniphase closed at a split-adjusted $1,104 US 10 years ago Wednesday. Now, the fibre optics company's stock is down a mere 99 per cent from that level tradingjust above $11 US.

Remember CMGI? The internet incubator was trading at $150 US back then. A year later, the stock was around $4 US. The company has since re-invented itself as ModusLink Global Solutions.

Many other companies, like eToys,simply disappeared.

Some of the big companies back then are still thrivingtoday. Amazon.com, Cisco Systems, Microsoft, Intel, andDell arecore holdings for manyinvestors.

As for Google, itwasn't even a public company 10 years ago.