*** The buying panic of last Thursday carried over to Friday morning. But the afternoon saw a reversal. By the close of business the Dow was down 81, below the 10,000 mark again. The Advance/Decline ratio…which has been going down for the past 22 months…was back in form — 1,214 stocks advancing, 1,714 declining. There were 73 new highs and 153 new lows.

*** The Nasdaq ended the day up…but barely, up 2 points. The S&P was down 6.

*** Gold was down, too — $2.70

*** Taking the week as a whole, the Dow was down 4.23%. Transportation stocks were down 21%. And the Nasdaq, by contrast, was up more than 2%.

*** So the beat goes on…the Dow is in a bear market…but the Nasdaq is still bullish — for now.

*** “You would have been better off,” the Sage of Omaha wrote to his shareholders, “if last year I had regularly snuck off to the movies during market hours.” Berkshire Hathaway’s price has been cut in half since 1998. “Our problem,” Buffett explained, speaking of himself and his partner, Charlie Munger, “which we can’t solve by studying up, is that we have no insights into which participants in the tech field possess a truly durable competitive advantage.” The answer could be — none of them.

*** Buffett makes me feel better about myself. If the greatest investor of all time could miss the explosion of wealth in the high tech area…why shouldn’t I?

*** Besides, what can you do? You can stay out of the techs and Nets. Or you dabble in them carefully — telling yourself that it’s just for fun and you’ll sell immediately when they start going down. Or you go for broke and try to get rich in the mania.

*** The trouble is, if you’re successful, the lure of getting in deeper and deeper is almost irresistible. You may think you can sell out in time, but the psychological pressure to stay in the game will be intense. No matter how much you’ve made…there will be a lot more you could make. Then, when the end really does come, it may be over almost instantly. Look what happened to P&G last week. It lost a third of its value. The techs and Nets will lose a lot more. As Lord Keynes put it, there’s no law that says there has to be a buyer for every seller.

*** Well, the weekend started out nicely enough. Beautiful weather. Lots of work to do. Mr. DesHais was getting the garden into shape. The kids and I were cutting wood — clearing out the undergrowth around the horse pasture. It has been neglected for about 20 years…so we’re taking down some fairly big trees.

*** But by 4 p.m. I was out of energy. And then I began to shiver. And then I knew I was getting sick.

*** I don’t get sick very often. So, when I do, I need to make the most of it. Besides, this felt pretty serious. So I took the train back to Paris (expecting to leave for the United States on Sunday), got into bed…and here it is Monday morning and I’m still in bed. Maria’s home sick, too. It’s like an infirmary around here.

*** But the interesting thing about this episode was the dreams. I must have been running a high fever…tossing and turning…or just lying there semi-comatose. I could have dreamt of tropical beaches, or of war or love…or of naked Amazons 10 feet tall. But I dreamt of only one thing —

The Bubble. Not in any reasonable way…not even in an amusing or lascivious way — just crazy dreams about IPOs, absurd prices, the insanity of it all. I can’t recall any of the details. And I don’t know why my subconscious would choose such a subject-except that maybe it seemed like the only thing appropriate for someone in my nearly delirious condition.

*** You have to admire those Russians. When they have a job to do, they do it. I was reading an account of the Battle of Stalingrad. It tells how General Chuikov instilled discipline in the troops. He lined up units that had performed badly and decimated them — shooting every tenth man. The soldiers got the idea. Well, that’s all I can do today.

Keep well,

Bill Bonner

Paris, France March 13, 2000