March 20, 2000 New Thinking:
Emotional technology
Subject Classification
Reader Feedback
Subscribing
Unsubscribing
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Books by
Gerry McGovern
Content Critical
Gaining competitive advantage through high-quality web content
The Web
Content
Style Guide
The essential guide
for online writers, editors and managers
March 20, 2000
Emotional technology
By Gerry McGovern
Technology is about the automation of things people do. Technology is about logic. You’re not meant to get emotional over technology.
Unless, of course, it’s a technology stock! Normally sane, reasonable people are going crazy over technology stocks. Technology stocks are not so much driven by logic today, but by the basic raw emotions of excitement and greed. (It’s interesting that the world still spins on our whims.)
The stock market uses a lot of technology but it is highly unlikely that the stock market will ever be fully automated. Imagine the scenario: perfect measures for everything so that you knew exactly what everything was worth. If you followed logic, shouldn’t that be the objective of the stock market? But where would be the fun in that? What would be the point in getting up in the morning if you knew exactly what was what? And where would be the room to make (and lose) big wads of money.
I was at a St. Patrick’s Day dinner in New York a couple of days ago. The host told us a joke about the stock market. He said: “My wife asked me last night what made the stock market go up and down. I said, honey, there’s a lot at play. There’s interest rates, profit taking, global macro trends, new versus old economy thinking, future versus present valuations, labor trends, consumer purchasing trends, oil prices, presidential elections and other global political trends. And she said to me, ‘Honey, just tell me if you don’t know.’”
So is there any logic or common sense to it all, and particularly when it comes to Internet stocks? According to Alex Frew McMillan writing for CNNfn, “Many experts say you'll have more luck searching for something simpler -- such as the meaning of life, the Holy Grail or the fountain of youth -- than trying to determine why Internet stocks move the way they do.”
McMillan was reporting on a study by two university professors whose objective was to try and find out was there any method to the madness of Internet stock investing. The basic conclusion was that there are reasons why the stocks move the way they do, but whether those reasons make any sense, the professors don’t know.
"Anyone who says they know what's going on, I don't think is being entirely truthful," said Brett Trueman, one of the professors. "These are very emotionalized stocks," according to Al Goldman, chief market strategist with A.G. Edwards. "Emotions are made up of human beings, and we're all a little nutty. And our fear and greed runs all over the place."
But its not all chaos and illogicality. The study found that earnings and revenue do indeed matter when valuing an Internet stock. Book value and profit are important. Losses are acceptable once they are the result of spending on research and development to develop a better product and marketing to acquire more market share. Web traffic makes a difference (though really what should be more important is customers acquired, cost of customer acquisition and revenue per customer.) But then the study found that demand matters too, that a stock becomes ‘hot’ and investors just want it because other investors want it.
It’s hard not to accept that Internet stocks are a bubble waiting to burst. But remember, inside that bubble is a revolution that has already changed our lives.
Gerry McGovern
Next issue: Japan:
Mirror of our futures?
Previous issue: Free
music
New Thinking homepage
New Thinking Newsletter
Subscribe to this free weekly newsletter covering the role and function of content on the Web.
More info | Privacy policy
Read the current issue
Content management seminar feedback
"Gerry's presentation was very well received by the more than 400 higher education delegates. I've chaired this meeting since 1994 and very few speakers have generated the same level of enthusiasm. Wit and wisdom is always an unbeatable combination."
Bob Johnson, American Marketing Association
“Excellent presenter ... thought-provoking and relevant. I hope we can persuade him to visit us again one day.”
Malcolm Davison
The British Association of Communicators in Business
"Hearing Gerry McGovern speaking, one can feel that he truly masters the subject of content management. He was voted ‘best speaker of the conference’ by delegates."
Toon Lowette
European Association of Directory Publishers
Find out more about Gerry McGovern's seminars
It’s hard not to accept that Internet stocks are a bubble waiting to burst.
Home - >What's New - About - Solutions - Clients - >Publications - Contact - Search
Tel: +353 87 238 6136
Email: info@gerrymcgovern.com
Privacy Policy
Copyright © Gerry McGovern. All rights reserved.