ExxonMobil looked safer than Amazon 20 years ago

Twenty years ago, an investor building a portfolio after the dot-com bubble would probably have chosen ExxonMobil, General Electric or Bank of America over a gaming-chip maker, a DVD rental company, an online bookseller or an online travel site.

Microsoft might have been added for technology exposure. The article’s central point is that the companies that looked safest in 2006 were not necessarily the ones that delivered the strongest returns over the following two decades.

Priceline, for example, looked like a symbol of the dot-com bubble. Listed in March 1999, its shares rose 60-fold within weeks. The company used William Shatner and the slogan “Name your own price” to attract customers who bid for flights. Priceline often bought tickets itself to honor low bids, however, and posted heavy losses. When the bubble burst, the stock fell 99%.

The company survived by abandoning side businesses involving gasoline and groceries and focusing on conventional bookings. Its 2005 acquisition of Dutch startup Booking.com eventually supplied the name it adopted. Over the past 20 years, the stock has risen 150-fold.

Amazon already generated $10 billion in revenue in 2006, but still looked tiny beside Walmart. Investors questioned Jeff Bezos’ spending on new projects and wondered why an online bookseller was renting server capacity and cloud infrastructure to startups. That initiative became AWS, Amazon’s current cash engine, and the stock has risen 163-fold since then. Netflix was still mailing DVDs, although work had begun on the software that would lead to streaming. Its shares have risen 289-fold. Nvidia, meanwhile, was already known among gamers and technology enthusiasts, though its later importance was far from obvious to the broader market.

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Nvidia was already very well known 20 years ago, among gamers and tech nerds.