David D. Kirkpatrick and Jamie Heller
Are the Dot-Commers' 15 Minutes Over?
By Jamie Heller
Posted Wednesday, May 24, 2000, at 11:56 AM ETDavid,
The business story of the day remains the market. And at least from the vantage point of TheStreet.com newsroom, it doesn't look like that's going to change in any encouraging time frame.
But that big story casts off lots of satellites. One close to my heart is the intensifying cultural disdain for "dot-commers."
Back in 1996, we were considered freaks. From '98 through about midway '99, we were brilliant visionaries; dead-tree/corporate types couldn't follow us here fast enough. Lately, we've been dismissed as a hubristic lot getting our just desserts.
You see signs everywhere. First, the layoffs. (Check out this Industry Standard
story on Value America.) Silicon Alley daily e-mail news dispatches, which just a few months ago carried news of "strategic partnerships" and VC injections, now bear pink-slip stories. Even the Wall Street Journal "Weekend" recently led with the news that dot-coms have bad manners!
As a writer at the arbiter of "success" in New York City, you surely must be hearing tales, too. What's the New York mag take?
Jamie
Are the Dot-Commers' 15 Minutes Over?
By Jamie Heller
Posted Wednesday, May 24, 2000, at 11:56 AM ETDavid D. Kirkpatrick is a contributing editor at New York magazine who writes frequently about business and finance. Jamie Heller is editor for strategic ventures at TheStreet.com, where she's worked since its 1996 founding. Reader Response from The Fray--to be read after the most recent entry:
I still don't understand how the stock market can be efficient in the long term and not the short run. And I'm not relying merely on Keynes' famous sentiments about the long run; my point is even simpler: when is the long run? Was Microsoft's long run value from 1990 to early 2000 or to today? Short run volatility must have consequences for people who claim long run efficiency. To my mind, and for many other reasons, believing in efficient markets is like believing in Santa Claus--there are correlations between expected results and reality, but people really ought to grow up and accept that no-one on Wall Street knows anything.
--Jeff
(To reply, click
here.)
(5/22)
To Jeff: Various natural processes are long-term efficient without being short-term efficient, for example the downhill flow of water or the process of natural selection (aka evolution). Complex human processes seem to have similar behavior. Perhaps efficient is being confused with "optimal". The problem with most strategies that attempt to be optimal is that they often have truly horrendous failure cases, which wipe out all their interim or theoretical gains. Democracy has been called "the worst form of government, except for all the rest." It is hardly optimal, and in many cases very inefficient. A dictator could get the graffiti cleaned up and the trains running on time; democracy seems to have a hard time doing such things. But what about the failure case of a less-than-benign dictator or a dictator whose benign intentions diverge from many or most of the desires of the population? An example of short-term efficiency vs. long-term, in terms of human happiness.
That's not to say short-term efficiency is bad, or that we can't improve on raw systems. But it is possible for a strategy to be the best long-term one without exhibiting short-term efficiency.
--Paul Canniff
(To reply, click here.)
(5/23)
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Reader Response from The Fray--to be read after the most recent entry:
I still don't understand how the stock market can be efficient in the long term and not the short run. And I'm not relying merely on Keynes' famous sentiments about the long run; my point is even simpler: when is the long run? Was Microsoft's long run value from 1990 to early 2000 or to today? Short run volatility must have consequences for people who claim long run efficiency. To my mind, and for many other reasons, believing in efficient markets is like believing in Santa Claus--there are correlations between expected results and reality, but people really ought to grow up and accept that no-one on Wall Street knows anything.
--Jeff
(To reply, click here.)
(5/22)
To Jeff: Various natural processes are long-term efficient without being short-term efficient, for example the downhill flow of water or the process of natural selection (aka evolution). Complex human processes seem to have similar behavior. Perhaps efficient is being confused with "optimal". The problem with most strategies that attempt to be optimal is that they often have truly horrendous failure cases, which wipe out all their interim or theoretical gains. Democracy has been called "the worst form of government, except for all the rest." It is hardly optimal, and in many cases very inefficient. A dictator could get the graffiti cleaned up and the trains running on time; democracy seems to have a hard time doing such things. But what about the failure case of a less-than-benign dictator or a dictator whose benign intentions diverge from many or most of the desires of the population? An example of short-term efficiency vs. long-term, in terms of human happiness.
That's not to say short-term efficiency is bad, or that we can't improve on raw systems. But it is possible for a strategy to be the best long-term one without exhibiting short-term efficiency.
--Paul Canniff
(To reply, click here.)
(5/23)