There were revenue recognition issues on service contracts. High stock valuations for technology companies allowed large companies to acquire small ones, with acquisitions consolidated using the pooling of interest method. The concern was that earnings could be inflated and that the acquisition of these companies cost virtually nothing. The last mathematical issue to consider is that the calendar year is an arbitrary period for measuring stock performance. Invest for the long term and ignore short-term fluctuations.
Markets rise two-thirds of the time.
Past performance is not predictive. Poor performance is often predictive of good future performance. Stick with value investing and have some bonds in your portfolio. Assante Capital Management Ltd. He is CAmagazine's Technical Editor for Personal Financial Planning.