We left fundamentals, and only momentum began driving up the stocks, ... The binge had very little to do with economics. Investors were playing a very dangerous game.

The fact that there's a shakeout in the first generation of companies associated with it [the Internet] clouds the issue, but it is a tremendous productivity booster. The leading companies will benefit long-term.

Investor sentiment is important, but not nearly as much as basic company growth. While the vast majority of the first-generation Internet companies may not survive, the leaders ? those with first mover advantage and no small measure of luck ? will survive and will take the Internet to its second, more mature phase of development.

A significant Nasdaq rally will be difficult. Those who were burned in the dive will see a $5 stock go up to $9 and then get out. Today's tough investing environment is in some ways distinct from what is actually happening in the economy.

Now that the ranks of the alternative low-cost or free ISPs are being rapidly thinned, the remaining service providers run less risk of losing customers.

The fact that there's a shakeout in the first generation of companies associated with it [the Internet] clouds the issue, but it is a tremendous productivity booster, ... The leading companies will benefit long-term.