Each day, Benzinga will take a look back at a notable market-related moment that happened on this date.
On Jan. 18, 2000, Kemper Funds chief investment strategist Robert Froelich gave an infamously ill-timed interview recommending investors buy tech stocks at any price at the height of the dot-com bubble.
Where Was the Market?
The S&P 500 finished the day at 1,455.14, and the Dow Jones Industrial Average stood at 11,560.72.
What Else Was Going On in the World?
In 2000, the state of Vermont passed HB847, a law which legalized same-sex civil unions. Microsoft Corporation co-founder Bill Gates stepped down as CEO of the company. The average cost of a new house in the United States was $134,150.
No Price Too High
In an interview with the Wall Street Journal, Froelich made a number of statements about the frothy tech market that are painful to read in hindsight.
“It’s impossible to pay too much for a good stock,” Froelich said. “We see people discard all the right companies with all the right people with the right vision because their stock price is too high—that’s the worst mistake an investor can make.”
At the time, Froelich was recommending investors buy Cisco Systems Inc., Motorola Solutions Inc., and Intel Corporation.
Within a year’s time of Froelich’s interview, Cisco stock was down 27.5 percent, Intel stock was down 40.8 percent, and Motorola stock was down 55.1 percent.
At the time, Froelich argued the tech environment was a “new world order,” the classic “this time it’s different” argument that has burned thousands of investors throughout history.
By Wayne Duggan
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