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

The German Experience

Germany went through an Internet bubble, just as did America, but with considerably less damage to the small investor. In Germany, small investors didn't get sucked into the speculative frenzy to the degree that in America destroyed the savings and pensions of many people. There were several reasons for this.

First, in Germany the individual has far less control of her or his pension money than in America. Germany has a state-run pension plan which has little room for corporate-managed defined benefit pension funds of the older American type, and none at all for pension plans managed by the individual. Hence, Germany has no 401(k) plans or Individual Retirement Accounts which leave to the individual the direction of his ...