Just as 1989 will forever be known as the year Berlin Wall was toppled, 1999 may is likely to be known as the year the Iron Curtain of Wall Street came down.
Certain terms have been totally redefined as a result of the Internet, and this transformation is crucial in order to comprehend the magnitude of change caused by the Internet.
For instance, the term "consumer," has been reinvented in the Internet age, so that it is no longer an inappropriate legacy term inherited from the 1950s. The consumer concept is somewhat inappropriate when it comes to the Internet, because we no longer are consuming only after finish our 9-to-5 jobs and on weekends, rather, we are buying software and CDs, sending gifts, and accessing sports scores throughout our wired day.
Indeed there is no way that Amazon.com could generate $250 million in revenue in a single quarter, or AOL could generate an average of $80 in revenues per subscriber, or CNET: The Computer Network (publisher of News.com) could report $80 million in revenue to its participating merchants without the transformed notion of the consumer and when consumption takes place.
From my vantage point, it's undeniable that 1999 will be remembered as the year that traditional definitions of the terms "Wall Street" and "investors" were overhauled, largely as a result of the Internet.
Until very recently, when we thought about Wall Street and its investors, we thought about the great legacies of the 19th century. The stodgy look-and-feel of the Wall Street Journal, commercials on CNBC about big discount brokers, neoclassical buildings filled with men in three-piece suits making very important decisions all came to mind.
Ironically, those selling such imagery are the very companies that benefited most when the recent revolution took hold--when the stock market and the Internet converged.
What has happened is that firms that traditionally controlled the majority of investment decisions have lost ground--not to competitors, not to a new hedge fund headed up by some big rock-star, and not to a new investment group with a particular area of focus, but simply to hundreds of thousands of individual investors that have decided to take financial matters into their own hands.
The question to ask is, who's buying new subscriptions to the Wall Street Journal and Barron's? Who's watching CNBC, Bloomberg News, and CNNfn?
Clearly, many of these readers and viewers are traditional investors, but I'm willing to bet that the individuals who make up the great new majority of them are not. The emergence of this new force on the investment scene only becomes more obvious when one looks at--dare I mention it--newsgroups.
While any proper investor will shun even the mere idea of looking at newsgroup threads, their impact has been felt by all. The so-called retail investor has become an essential part of Wall Street.
I know that it used to be said that if a cab driver was talking about stocks, the market had peaked and it was time to sell, but I've got news for you: if a cab driver is not talking about stocks, he's sheltered himself from popular culture and basically is not aware of what's going on.
What should investors do in this new world order? Well, probably more hands-on homework with some of the services and companies in which they are investing. In order to invest intelligently in a great deal of these companies, whether they are business-to-business companies or business-to-consumer companies, a more aggressive use of the company's product and service will be essential.