I'm reading a passage from Scott Patterson's book, The Quants , that looks back on the .com bubble. Let me share a few brief quotes from this section with you here. Backdrop: "A few months before the dot-com IPO frenzy began, LTCM had collapsed. Greenspan and the Fed swept in organizing a bailout. Greenspan also slashed interest rates...the easy money added fuel to the smoldering internet fires...pushing the tech-laden Nasdaq to all-time highs on an almost daily basis." The .com boom proved disastrous for Cliff Asness' hedge fund, AQR, which invested in value stocks while "betting against companies his models deemed expensive". After agonizing over the fund's poor performance and the perceived boundless stupidity of market participants, Asness finally came to a realization about markets and crowds: investor irrationality does not stay within expected, "just right" modeled bounds. Surveying the scene near the peak of the internet...
A trader's view of the stock market and emerging financial trends.