2000 Boom and Bust

My dumbest investment was buying shares of JDS Uniphase near the top of the 2000 tech bubble in the stock market. ‘Nuff said.

How did it happen? Well, I was foolish (with a small f) and thought the 2000 boom would last forever. All I saw were clear skies as far as the eye could see. — S.C., Key West, Florida

The Fool Responds: Back before the internet stock bubble burst, optical networking specialist JDS Uniphase was one of the biggest highfliers, topping $1,100 per share at one point and sporting a market value around $125 billion. Then it fell hard, dropping more than 99 percent and reaching about

$2 per share in 2008.

The company recovered after that, and went through some changes. In 2015 it split itself into two companies — Lumentum, focusing on optical communications and commercial lasers, and Viavi Solutions, focusing on networking products and services, among other things. The two companies are still around, with respective recent market values of and $2.9 billion and $2.3 billion.

The tech bubble bursting taught many new investors the danger of jumping into soaring stocks just because they’re soaring, without regard to their valuations. Many were so overvalued that they were likely to sink, but it can be hard for our brains to recognize and act on that. Remember that the best investing opportunities tend to be in great companies whose stocks have temporarily plunged.