So much for that idea: Tech stocks have fallen from 1999 to 2008

It's true that stocks generally ascend in the long run. But last week's stock market crash is a potent reminder of the corollary to that rule: the long run can be a long way off.

Our review of the share prices of large tech companies show that, for the most part, they've plummeted back to where they were nine or ten years ago. This means that, in general, anyone who bought shares of Microsoft or Intel during that time has lost money.

Once high-flying companies like Amazon.com, Dell, Yahoo, and Sun Microsystems have plummeted back to earth. Ones that noticeably appreciated compared to this time in 1999 include Apple, Research In Motion, and Hewlett Packard; SAP and IBM ended up sideways.

The Nasdaq Composite stock market index closed Friday at 1,649.51, down more than 1,000 points from October 1999. It's now returned to levels first reached in the boom days of autumn 1997.

The numbers are even worse if you take into account inflation, meaning the U.S. dollar's devaluation during that time.

A dollar went a lot further in the 1990s than today: U.S. government figures say consumer prices today are about 37 percent higher than at the time the Nasdaq first reached its current level; alternate calculations put them at closer to 100 percent. (Remember that gas prices were at about $1.25 per gallon in autumn 1997, and single-family home prices at the time were generally less than half what they were as of this summer.)

Those numbers, by the way, are adjusted for stock splits, inverse splits, and dividends.

A 43 percent drop in the Nasdaq Composite index from its 52-week high is a serious downturn, especially when coupled with the bursting of the housing bubble and a virtual seizure of some credit markets. But it's a long way away from the Great Depression, which resulted in the stock market losing almost 90 percent of its value.

Then again, saying that a market crash isn't as bad as the worst economic catastrophe in recent history is rather like saying that getting shot by a .38 caliber pistol isn't quite as bad as getting shot with a .45 magnum. In a blog post last Thursday, economist Nouriel Roubini of New York University warned that "severe damage is done and one cannot rule out a systemic collapse and a global depression."

It's still too early to know how the dip in tech shares will affect Silicon Valley and other technology firms. Investor distaste for stocks makes it more difficult for companies to raise money that way; it also means that the stock option-fueled economy of the Bay Area slows down. We reported last Thursday on how tech companies are dealing with the financial hurricane; the Wall Street Journal also noted that while Silicon Valley may seem relatively insulated, some companies are putting their IT purchases on hold.

As of this weekend, there was some hope for disheartened investors: U.S. stock futures hinted at a 3 percent rise for the Nasdaq in advance of the market opening on Monday. Still, in this new era of stock-market revulsion and newfound appreciation for cash (and perhaps even gold), much of the recent news is far from promising.

"Start-ups that don't have traction and don't have that kind of hockey-stick-like growth on Alexa or Compete or whatever are going to have a really difficult time raising an additional round of funding," Digg founder Kevin Rose told us in a recent interview. "I think that a lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in."

Technology-related initial public offerings in the third quarter fell from 44 in 2007 to a mere 10 this year. Growth in cell phone sales may be moderating. No wonder angel investor Ron Conway warned his portfolio companies last week to cut expenses, fast.

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