What the high-tech bubble got right

Quite a lot, actually. True, stocks like Yahoo were trading at $200 per share when normal calculations put their value at about $12. And when the bubble burst, Yahoo stock lost 95% of its value. But it still had quite a bit of value left.

even with all the fat trimmed off its market cap, Yahoo was still worth a lot. Even at the morning-after valuations of March and April 2001, the people at Yahoo had managed to create a company worth about $8 billion in just six years.

The fact is, despite all the nonsense we heard during the Bubble about the "new economy," there was a core of truth. You need that to get a really big bubble: you need to have something solid at the center, so that even smart people are sucked in. (Isaac Newton and Jonathan Swift both lost money in the South Sea Bubble of 1720.)

What was the core of truth? Read this great article by someone working at Yahoo during the blow-up and the burst to see what aspects of business and value the bubble had good insights into. A starter: the internet (it actually is a big deal); choices (more than ever); youth (a source of energy, different points of view, a market-moving sector of the economy); and more.