A look back at 2000, humbled with help of 20/20 hindsight

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Before proceeding on to next year, how about some chuckles? Given what has been going on with our investments lately, we could use them.

Here’s one, from CNET’s Bill O’Brien. It’s a prediction written just one year ago: "It’s unlikely that the so-called Internet bubble will burst next year." Pretty clever, don’t you think?

O’Brien wasn’t alone. Listen to this prediction from Chet Dembeck of eCommerceTimes: "By this time next year, e-commerce will have already driven many of its brick-and-mortar rivals out of business." That’s a 100 percenter—100% wrong.

It’s true that most analysts last December expected some shakeout among Internet stocks, but none expected the debacle that actually occurred.

The views of ZDNet columnist Charles Cooper were typical. "Stocks recover in time for a fourth quarter rally and the world as we know it survives for yet another year," he predicted. Cooper’s colleague, John Dodge , was even bolder. Of the stock market, he wrote last December, "Only pestilence, a global natural disaster, a big war or $2.50-a-gallon gasoline prices can stop its relentless advance." Sort of makes you glad journalists don’t make much money, doesn’t it? Lord knows we wouldn’t do well investing it.

It wasn’t just the stock market folks were wrong about, but this sector in particular. "B-to-b on a grand scale should kick into high gear around the middle of the year," Dodge wrote.

Journalists weren’t alone in predicting great things. We were simply parroting the sage views of the nation’s market research firms. In February, Gartner Group Inc. predicted that b-to-b online transaction volumes would rise from $145 billion in 1999 to $7.29 trillion by 2004. Their rivals at Forrester Research Inc. said it would be "only" $2.7 trillion by that time but added that 53% would be generated by so-called "eMarketplaces." Many of the marketplaces touted in their February report have since disappeared.

Here’s one more story of where we were a year ago, from the BBC. It seems that last December, 17-year-old Benjamin Cohen was preparing to float a 10-month-old site for a small newspaper, the London Jewish News. His was expected to have a value of £50 million within months. SoJewish was acquired by Totally plc on Nov. 28 for 12.5 million shares, worth 21 pence each. The price included the newspaper. That’s nearly $4 million, but it’s nowhere near $50 million, let alone £50 million.

My point here isn’t to make fun of anyone. God knows I’ve been wrong more times than right. This is especially true regarding the stock market and economic outlook. I’ve predicted at least nine of the last three recessions, maybe 10.

The fact is, the future is completely unpredictable. That’s what makes going there so much fun.

It’s also true that sound management is based on being prepared for whatever the future brings. That’s the value of your assets, your goodwill, your education and the relationships you’ve built over the years.

The business world is full of fads, and anyone who draws a straight line from the recent past and thinks it a trend is a fool. This includes yours truly. That’s an important lesson to take into the 21st century.

Dana Blankenhorn is a free-lance journalist who specializes in Internet issues. He is publisher of the Web site

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