Some time ago, I circled March 10 on the calendar. In red ink. On that day, my pal Bre-Xer and I will meet after the closing bell at our old stomping grounds, the Powderhorn Saloon, a hitching post west of Calgary.
At the 'Horn, we will celebrate THE ANNIVERSARY. In style. With cheap bubbly champagne toasts to The Great Tech Bubble of five years ago when so many of us forgot to keep some powder dry for the tech crash.
We will drink to fools like us, to the bubbly CEOs of 2000 and to those mystical, magical price/earnings ratios of 1,000 or more that defined the greatest speculative bubble in history.
We will drink to John Roth and his arrogance and his lavish stock options at Nortel Networks, whose stock traded in the $90s on March 10, 2000 and would peak at $124 in mid-year.
We will toast Josef Straus and his cool beret at JDS Uniphase, a stock that traded on March 10, 2000 at $235.
We will hoist one for Michel Fattouche and the no-holds-barred cash burn at Cell-Loc Inc., whose stock, on March 10, 2000 traded in the $80 range.
We'll raise another glass to one-time Edmonton entrepreneur Bernie Ebbers and WorldCom, a company long gone whose CEO's crash from grace is now being played out in a courtroom where he is facing fraud charges.
And we'll drink to the cheerleaders, to Henry Blodgett, King Henry of Internet analysts, to Abby Joseph Cohen, the perpetually bullish strategist at Goldman Sachs who kept pounding the table long after March 10, and to all the analysts who couldn't, or wouldn't, fall out of love with Nortel.
We'll recharge our glasses and toast all the players who make a market - the pumpers, the dumpers, the hypsters, the liars, the cheats, the twisted accountants, the two-bit touts and the drunken sailors in corner offices.
And we will reminisce about those dead dot-coms that refuse to be buried in the portfolio graveyard. Like a recurring nightmare, old, dead tickers still show up in the portfolio next to a column of zeroes, a screaming tribute to stock market greed, stupidity and insanity.
My pal Bre-Xer, who ought to have learned a thing or two from the Bre-X scam, will raise his glass and ask: "Hey, whatever became of online tee-time booking and Book4golf.com?" "Long gone," I will tell my pal, "better book the Book4golf.com tax loss."
Hey, for old time's sake, we may even trade stock tips with the bartender.
"Pssst, have you heard about cashburn.com?" How could anyone forget March 10, 2000?
On that day, the dot-com hype had reached epidemic proportions and CNBC, unofficial sponsor of The Great Tech Bubble, was playing it for all it was worth. At 7:20 a.m., in the countdown to the opening bell on CNBC, I can recall the striking commentator Maria Bartiromo frantically shouting out stratospheric pre-market quotes at a feverish pitch amid the bedlam on the floor of the New York Stock Exchange.
As the countdown began to the closing bell and the Nasdaq's historic high of 5,048, my pal Bre-Xer was on the phone. "Hey, there's talk on CNBC about the Nasdaq eclipsing the 6,000 barrier," he said, and, as preposterous as it sounded, it was still impossible to discount the possibility.
After the closing bell on that fateful day, the future financial columnist for Business Edge took a brisk afternoon walk (on the picketline at Conrad Black's Calgary Herald) and then it was off to a local arena for the minor hockey wars.
In the arena parking lot, there was a chance meeting with an old media sidekick. He was tossing his son's hockey bag into the back of his van and pitching, not the game, but the stock of the day.
"Buy Cell-Loc!" he commanded.
Ah, Cell-Loc. With its hyped cellphone location technology and zero revenue, shares in the Calgary company had spiked to the $80 range in dramatic, mind-numbing fashion. And some thought it a bargain at that. Why? Well, because Inter-net stocks only went up, right?
If you didn't own Cell-Loc, or its wireless twin, Wi-LAN, in early 2000, you were a square.
"Everybody's getting in," my friend breathlessly shouted out the window of his van.
"I've got a friend and he knows someone and he says big things are happening. Nothing's going to stop this stock from going to the moon ..."
Of course, in retrospect, one realizes that getting hot tips in parking lots from friends who had never even mentioned the stock market before was the ultimate red flag.
Back in 1929, Joseph Kennedy, the father of a future U.S. president, apparently got a hot tip to buy oil and railroad stocks from a shoeshine boy.
As the story goes, Kennedy recognized this red flag and dumped his stocks ahead of the great stock-market crash of '29, reasoning that something had to be awry in a market where a shoeshine boy is giving out stock tips.
On March 11, 2000, the bursting of the bubble commenced and, within a month, the tech-powered Nasdaq had plunged 25 per cent even while the cheering continued unabated on Wall Street.
As many speculators threw bad money after bad money, desperately averaging down to lower their average cost as their stocks tanked, they would eventually learn that this was a full-fledged crash and not a mere correction, with the Nasdaq dropping almost 80 per cent in less than three years.
In the past two years, the Nasdaq has recovered some ground but, even at the recent price of 2,058, it's still not within shouting distance of the high on March 10, 2000.
Cell-Loc, like many of the dot-com and wireless stocks, would soon become a penny stock. Eventually, the company suffered the indignity of being reincarnated as an oil and gas company.
A new company, Cell-Loc Location Technologies, was born from a spinoff in that reorganization and that stock now trades on the TSX Venture Exchange at a mere 25 cents (TSXV:LTI).
Wi-LAN has survived, but the stock is also in the doldrums, flirting with penny-stock status. Accounting challenged Nortel briefly traded under $1 and was last seen at $3.70, a far cry from its top at $124 in mid-2000. JDS Uniphase's fall has been even greater than Nortel's, as it recently traded at $2.35.
Indeed, the champagne of tech stock investing has gone flat.
But what the hell. On March 10, we'll drink to The Great Tech Bubble anyway.
Then it's back to the drawing board to apply the painful lessons of past bear markets. And the next time we get a stock tip from a friend in a parking lot, we'll remember Joseph Kennedy and the shoeshine boy.
And we'll sell everything.
* SAGE WORDS: "We're in the critical portion of a coming collapse and the market's screaming to get out."
- Joe Granville, 81-year-old publisher of the Granville Letter, in a recent interview with Bloomberg.
HOT STOCK: Accrete Energy
TSX:GZ $6.90
Up $1.98 (+40.2%) on 935,000 shares (based on weekly results through Feb. 24 for Canadian stocks over $1)
Four months ago, Calgary oilpatch analyst Josef Schachter made Accrete one of his top picks in the Edge Pro's 3 Stars column with a 12-month target of $3.60, which at the time seemed rather lofty. But this flaming junior oil and gas market eats target prices for lunch. Schachter, president of Schachter Asset Management, saw his target vaulted within six weeks. The latest surge in Accrete shares coincided with the company's reporting of reserve numbers.
COLD STOCK: CFM Corporation
TSX:CFM $1.48
Down 72 cents (-32.7%) on 3.2 million shares (based on weekly results through Feb. 24 for Canadian stocks over $1)
It figures, sort of. The teachers own the stock that threw the textbook at shareholders with an 80-per-cent decline in less than a year. Unfortunately for shareholders, this buyout is being orchestrated with some "new math.”
Normally, companies get bought at a premium. The Ontario Teachers' Pension Plan offered $60 million for this cash-strapped Mississauga fireplace manufacturer which was 29 per cent below market value.
(Gyle Konotopetz can be reached at gyle@businessedge.ca)
