I sat on the trading desk of a large hedge fund on California Street in San Francisco in late 1998, contemplating our position in Yahoo (NASDAQ:YHOO) and worried we would get another down draft before I got my bonus. The fund had owned shares in Yahoo since the IPO in 1996 at the issue price of $12.50.

Shares had opened trading at $33 and traded $43 that day, and the fund would own these shares until 1999 when Yahoo bought Broadcast.com from Mark Cuban and his band of Indiana bar owners and promoters. The rest of the story now embeds itself in TV Shows like Shark Tank and other entrepreneurial quests, but the real mettle for investors was tested in navigating a market that was in the final stages of its 5-year move and was about to collapse.

The dot.com bubble was a 40-year business cycle jammed into 5 years, and I was right smack in the middle of it. I learned from my days in the trading pits of Chicago, that the only thing that was important was price.

Yahoo shares traded $475 in 2000, and it was the most valuable company in the world, as Cuban was plotting to buy a sports franchise from Don Snyder and become the upstart owner of the Dallas Mavericks. Yahoo made a CEO change in March 2001 firing Tim Koogle and hiring Terry Semel, and Yahoo would make a high never to be eclipsed.

I tell you this story because Yahoo shares in 1996 were what Digital Currency is in 2017, an upstart over valued asset that surely only fools would own. What was this internet anyway?

Why would a computer be a critical part of our life, and why do we need an operating system or a search engine, and what the hell was an internet portal anyway? Investors who owned the shares were asking these questions, cab drivers were asking these questions, yet they both owned shares, with zero idea why they owned them other than they were looking to capitalize on the Dot.com move that was making everyone in San Francisco rich. Read more from equities.com…

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