Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

The Transfer of Wealth

What were the consequences of the bubble? Much wealth was created and then destroyed. Easy come, easy go. On balance, after the great bubble, no wealth was created. This is a difficult judgment because the numbers are not complete; yet it appears to be justified. For example, an analysis by The Wall Street Journal showed that between 1996 and 2001, all the profits reported by some 4000 companies listed on the NASDAQ were offset by losses reported by the same companies—net profits appearing in 1996 through 2000, and net losses in 2001.^[13] With no profits on balance for the period, it's reasonable to expect that the valuations of the 4,000 companies should not have increased—although other factors might have caused that ...