[via FoRK ] Irrational exuberance my a**, in Warren E. Buffett’s letter to Berkshire Hathaway shareholders, he calls all those dogfood.com IPOs what they really were, Ponzi schemes.
“What actually occurs in these cases is wealth transfer, often on a massive scale. By shamelessly merchandising birdless bushes, promoters have in recent years moved billions of dollars from the pockets of the public to their own purses (and to those of their friends and associates). The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a companyÃs promoters. At bottom, the “business model” for these companies has been the old-fashioned chain letter, for which many fee-hungry investment bankers acted as eager postmen.”
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