Frenzy
Bubbles, Busts, and How to Come Out Ahead
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- $11.99
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- $11.99
Publisher Description
Despite the hype, the technology bubble of the 1990s was not driven by the Internet. It was driven by innate human forces that transcend the Internet, the 1990s the 20th century, and the United States. Since the 1960s, there has rarely been a year with out a bubble somewhere. Today we see bubbles in China, nano-technology, real estate, and many more are on the way.
Through an in-depth analysis and interviews with over 100 of the world's most influential venture capitalists, Fortune 500 CEOs and Wall Street's multi-billion dollar portfolio managers, Frenzy reveals the unexpected driving forces of bubbles. Frenzy provides critical insights and lessons for today's business professionals, investors and policy makers to manage the bubbles of the future.
PUBLISHERS WEEKLY
Irrational exuberance is the predictable outcome of human nature and competitive pressures, contends this engaging post-mortem on the Internet bubble. Haacke, an economic policy advisor in the Clinton Administration, treats the bull market of the 1990s as an exercise in group psychology. Investors, who understood little of the Internet's novel capabilities, had their perceptions clouded by media hype and optimistic analysts and fell prey to such cognitive lapses as the "representative heuristic" (memorable events model the norm), the "simulation heuristic" (what can be imagined can be achieved) and the "information cascade" (other bullish investors must know what they are doing). Investment professionals are paid to be more level-headed, but as technology stocks skyrocketed and clients demanded gargantuan returns, venture capitalists, investment bankers and fund managers felt pressured to abandon common sense in pursuit of wildly over-valued dotcoms. Haacke presents a lively and insightful account of the Internet bubble--complete with rueful commentary from chastened venture capitalists--set against colorful retrospectives of previous financial manias, from the 19th-century railway boom to the personal computer craze of the 1980s. Along the way, he throws in a few words of wisdom like "embrace the skeptics" and "be wary of information manipulation." This advice is sure to be ignored when the next bubble begins to swell, but in the meantime readers will find the book an amusing guide to the madness of crowds.
