Post of the Day
January 25, 1999
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Subject: Re: Y2K
"Do you have an opinion on how the Y2K "impending doom" will effect the stock market? Just as I'm starting to learn about investing, my other half is warning me to be careful until it's all straightened out. I'm not one to run with the scared masses, but what do you think? I know you don't have a crystal ball, but what will you do as we approach 2000? Take your money out of stocks and wait-and-see, go on as usual, or a bit of both?"
Personally, I think the whole thing is a bunch of fearmongering, designed by computer consultants and bureaucrats to trick people and corporations and government nitwits into blowing ridiculous amounts of money.
I say this, by the way, as a computer consultant myself. I know exactly how many of my peers tend to inflate "dangers" in order to inflate their bills. I have repeatedly seen consultants who were brought in for some small task use their inside status to "crack" a company's network and then say "Hey, it's a good thing I found this hole, you'd better fix it right away to save your company, I only charge $100 an hour!", when the actual danger (aside from someone you already gave access to) or likely cost even if it happened was relatively low.
To me, the greatest danger is that these vultures will, in their quest for fear-cash, fool enough people that they will panic and cause some needless mayhem around January 1st, 2000.
In fact, my own theory is that one might buy lots of gold now, and then SELL it if the prices go crazy at the end of December, instead of keeping it "in case the banking system collapses" (which I believe is a silly thing to worry about, in this case).
|"January 1, 2000 is only one of the "doomsday" Y2K dates. For example, another "doomsday" of Y2K just passed...1-1-99 was supposed to be a big day for systems with some kinds of test routines to crash, yet almost nothing went wrong at all."|
Likewise with stocks, if I did anything different, it'd be to buy up lots of stocks if needless worry causes their prices to fall at the end of december.
Then, when (as pretty much always happens with stock market fluctuations) when the prices come back up to sane levels shortly after the disaster fails to happen, I'd be raking in a ridiculous profit.
Overall, though, I don't think that a Foolish investor need worry much, since he's probably using a longer-term buy and hold method.
Remember, most major market dips (whether there was an allegedly good reason or not) have recovered within six months, and ALL have recovered within some period of time that's less than when you're likely to be retiring.
Which makes, in my mind, anyone who joined in on the selling pretty dumb. "Buy low", in my mind, includes stock market "crashes" and "adjustments", with the exception of any company you think may actually fail before the market recovers.
I should post a few reasons the Y2K thing is nonsense:
First, January 1, 2000 is only one of the "doomsday" Y2K dates. For example, another "doomsday" of Y2K just passed...1-1-99 was supposed to be a big day for systems with some kinds of test routines to crash, yet almost nothing went wrong at all. Another was 1-1-98, when all of the new credit cards (which are often 2 years in tenure) were supposed to start getting expiration dates of 01-00. Did you notice any real crisis, back then?
And remember, most really important systems need to actually plan ahead. An autopilot should fail when it is setting up for a flight that passes beyond midnite 2000, not just suddenly shut off at midnite, which means little more than a lot of tired pilots who couldn't turn on their autopilots in the first place, if anything at all.
And remember that most things DO NOT NEED TO KNOW THE TIME, MUCH LESS THE DATE. I've seen Y2K people actually seriously threaten that your microwave oven or toaster may bomb...but does your toaster need to know what year it's toasting in? Is it going to suddenly think that this is January, 1900, and realize that it hasn't been invented yet, and refuse to make toast? When's the last time you needed to pre-program your oven to cook some frozen lasagna next year?
Oh, and don't forget the "This company is only fixing 40% of its Y2K flawed code!"
|"does your toaster need to know what year it's toasting in? Is it going to suddenly think that this is January, 1900, and realize that it hasn't been invented yet, and refuse to make toast?"|
This is a scam where the company only wants to spend $120 an hour for the consultant to fix the Y2K bugs which actually matter, and so the consultant goes public with this complaint, forcing the company to fix the harmless parts just to soothe the ignorant public.
See, most Y2K "bugs" involve log files which will say "Today is January 1st, 1900, and the temparature is forty degrees", and other nonsense that can simply be ignored. Everyone looking at the log file knows what it actually means. Even if you get a bill saying you owe for a movie you rented on 1-1-1900, you'll know what it means, and I suspect that your desire to rent more movies later (which is all they really have as a threat, anyway) will cause you to pay it anyway.
So some savvy tech guy explains this to a VP, who then says "We're not paying that bozo $120 an hour to make sure our records don't claim that Bob logged in a hundred years ago, tell him to only fix things that actually break something", and then the consultant announces the "danger" to the public, and the VP gives in.
Like anyone's going to actually read this whole diatribe. I should put a more concise and rhetorically sound article on my own site or something...
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