Analysis, without reference to y2k, seems to me to miss the distorted invesment cycle of 98-99 and the necessary retrenchment in 2000, 2001, and the ensuing consequences. Without which the demand curves may have remained as predicted..
Then reality intervened.
Demand for bandwidth, it turned out, was not what everyone had thought it would be. The networks weren't filling up with customers at anywhere near the rate that the new-economy faithful had expected.
The market had a huge glut of capacity, and many of the fiber-optic networks were left sitting idle.
Within a few months of the March 2000 plunge in the stock market, many of Mr. Gilder's prime picks nose-dived. "My whole optical paradigm crashed, and it crashed on my head," Mr. Gilder said.
When things fell apart, newsletter subscribers were irate. "They were mad and hurt and aggrieved and pained and broke," Mr. Gilder said.
"And, they had a real grievance. These people didn't lose 50 percent or 80 percent of their money. They lost 98 percent of their money."
As fate would have it, says Mr. Gilder, 90 percent of subscribers had bought their stocks during the peak months of 1999 and 2000. Some of them blamed Mr. Gilder personally for their losses. One group of subscribers started a class-action lawsuit against him, but the suit never got off the ground. He was also sued by his chief financial officer for severance pay, and settled for $7,000.
