A short history of 1999, the year everyone became a genius
In 1999, Barbra Streisand explained her investment strategy to Fortune magazine.
She was a day trader. She told the interviewer she couldn’t stand seeing red in her profit column, and since she’s a Taurus, she reacts to red. When she saw red, she sold. That was the system. Zodiac sign as risk management.
Her stock-picking method was just as rigorous. “We go to Starbucks every day, so I buy Starbucks stock.”
I found her in the pages of The Intelligent Investor, where Jason Zweig preserved her like a fossil in amber. His footnote on the Taurus logic is surgical: instead of stargazing, she should have asked one question. Did the value of the underlying business change? Because that’s the only reason an intelligent investor ever sells.
But here’s the thing. Streisand wasn’t the punchline. She was the crowd.
Everyone was a genius that year
By 1999, at least six million Americans were trading online. Roughly one in ten of them were day trading, firing stocks back and forth like live coals.
Zweig tells the story of a 25-year-old former waiter from Queens who traded up to ten times a day and expected to clear six figures in a year. His stated reason for the switch: he used to invest for the long term, and he’d discovered it wasn’t smart.
Sit with that sentence. A waiter, mid-mania, concluded that the strategy behind nearly every fortune in market history wasn’t smart. And in 1999, nothing around him disagreed.
The brokerages fed it. One TV ad showed two housewives back from a jog; one clicks her mouse a few times and celebrates making $1,700. Another ad had NBA coach Phil Jackson agreeing to make a trade while admitting he knew nothing about it. As Zweig points out, no coach would send a team onto the court with that philosophy, but a brokerage was happy to send him to the market with it.
Financial TV poured stock data into every bar, barbershop, and café in America until the market became a national video game. People were drowning in data. Knowledge was nowhere. Stocks stopped being pieces of businesses and became blips on a screen, and if the blips were moving up, nothing else mattered.
In December of that year, a company called Juno unveiled a business plan built on losing as much money as possible, on purpose, to attract users. The stock jumped.
That was the water everyone was swimming in. Streisand was just famous enough to get quoted treading it.
The rule she broke was actually a good rule
The Starbucks logic didn’t come from nowhere. It’s a corrupted version of Peter Lynch’s famous advice: buy what you know. Lynch ran Fidelity’s Magellan fund to the best track record a mutual fund had ever compiled, and he genuinely believed regular people could spot great companies before Wall Street did, in restaurants and parking lots and shopping carts.
Almost everyone remembers that half of the rule. Almost no one remembers the second half, and Lynch never stopped saying it: finding the promising company is only step one. Step two is the research. He insisted no one should ever buy a stock, no matter how much they love the product, without studying the financial statements and estimating what the business is worth.
Familiarity finds the candidate. Analysis makes the decision. Streisand kept step one and skipped step two, which is like proposing marriage because someone smells nice.
Loving the latte tells you nothing about whether the stock costs more than the company is worth. Millions of people made her exact mistake with other names they knew from daily life, buying the stock of the website they browsed and the broker they traded on. The love was real. The homework never happened.
Even the pros were selling the fantasy
That same year, a hotshot fund manager went on CNN, fresh off a five-year run of astounding returns, and told viewers they could match him. His full formula: focus on things you know, stay close to an industry, talk to people in it.
Zweig kept the receipts in a footnote. Over the following three years, that manager’s fund, packed with the technology companies he knew best, lost roughly two-thirds of investors’ money.
Knowing an industry and knowing a stock’s price is fair are two different kinds of knowing. The first one feels like enough. It never is.
The part nobody wants to admit
It’s comfortable to read about 1999 and laugh. The astrology trades. The waiter outsmarting a century of evidence. The ads promising wealth in a few clicks.
But mania doesn’t announce itself. From inside, it just feels like everyone finally figured out something the old rules missed. The people in these stories weren’t stupid. They were surrounded, and the crowd was unanimous, and the blips kept going up.
Graham’s entire book exists because this cycle predates the internet, predates television, predates Streisand. The technology changes. The costume changes. The certainty that this time is different arrives right on schedule, every time.
Twenty-seven years later, none of these stories should sound familiar.
If they do, you already know what year you’re living in.
This is my personal reading and opinion, not professional financial advice. I’m not a financial advisor. Do your own research before investing a single dollar.