TORONTO – It was 15 years ago this month when Nortel Networks\’ shares hit an all-time a lot of $124.50 on Toronto\’s stock exchange.
The company\’s sky-high stock managed to get by far Canada\’s best company at the time – with a market value that briefly surpassed the banks and resource companies listed on the Toronto Stock Exchange.
It didn\’t last. A couple of months later, Nortel shares began a bumpy slide that led to a worthless stock and also the bankruptcy breakup of the items was once a global leader in telecommunications networks.
People are mesmerized by rising stock values. They don\’t ask if this is creating any limit
Even though Nortel is now long dead, industry veterans state that, human nature being what it\’s, most investors won\’t learn from its boom and bust.
\”I find in this business, people want to believe,\” says Ross Healy, chairman of Strategic Analysis Corp., an investor advisory firm.
\”People are mesmerized by rising stock values. They don\’t inquire if this is coming to a limit. The longer it goes on, the more that they are convinced that it\’s going to continue going on.\”
He predicts that today\’s high-flying social networking stocks is going to be crushed – just as other tech stocks were in the past – because investors are willing to overpay if they expect a company\’s spectacular growth will continue into \”the infinite future.\”