The AI (ChatGPT) Stock Investing Handbook: Dot-Com Bubble and Crash

Here is the response from ChatGPT for the prompt dot com bubble and crash entered on January 22, 2023.

The dot-com bubble, also known as the internet bubble, was a period in the late 1990s and early 2000s characterized by a rapid increase in the value of technology and internet-based companies, many of which had never turned a profit. Investors were eager to buy stocks in these companies, driving stock prices to unsustainable levels. Many of these companies were start-ups with little to no revenue or profit and were valued based on their perceived potential for growth.

The bubble burst in 2000, when investors started to realize that many of these companies were not going to be profitable, and stock prices began to decline. The NASDAQ composite index, which is heavily weighted towards technology and internet companies, reached a peak of 5,048.62 in March 2000, but by September 2002, it had declined to 1,114.11, a drop of 78%. Many dot-com companies went bankrupt, and investors who had bought their stocks at high prices lost a significant amount of money. The dot-com crash had a ripple effect on the overall economy as well, leading to job losses and reduced consumer spending.