Product Description

The Bubble and the Bear recounts the dramatic rise and fall in Nortel stock value and tracks its devastating effects on personal savings and investments in Canada. A brilliant analysis of Canada’s most damaging stock gamble.

A cautionary tale of stock market mania, drawing on interviews with Canadian investors who lost tens of thousands of dollars, Nortel employees, and the precious few analysts who foresaw the collapse of the stock.

The tech industry boom of the late 1990s led stock analysts to believe that Nortel and other telecommunications industry leaders were a sure thing, the stock that every Canadian should own. By the summer of 2000, Nortel had a market capitalization of almost $375 billion. Nortel figured prominently in the portfolios of most every pension fund in the country, as well as in many mutual funds and RRSPs, as investors were determined to ride the biggest wave on the Toronto Stock Exchange (TSE).

Hunter demystifies the tech industry and the bubble economy’s “irrational exuberance,” which took hold of the stock markets as tech companies rushed to build a global communications infrastructure. When Nortel began to dominate the TSE, it also caught the eye of U.S. analysts, driving the share price up further and making it an active contender on the New York Stock Exchange.

• Why did mutual funds and pension plans gamble so heavily on Nortel?
• Why were most analysts cheering from the sidelines, unprepared for the dramatic revenue shortfall announced in February 2001?
• How did Nortel get away with presenting earnings that made losses disappear?
• Is there any evidence of negligence or wrongdoing?

All these questions, and more, are answered in this account of Canada’s most costly stock gamble.

Product Details

• Amazon Sales Rank: #302803 in Books
• Published on: 2002-10-15
• Released on: 2002-10-15
• Original language: English
• Binding: Hardcover
• 480 pages

Amazon.ca
At the start of the new millennium, Enron dominated the business news in the U.S., but it was Nortel that grabbed the Canadian headlines by the throat. The saga of the telecommunications giant may have lacked Enron's element of venal criminality, but Nortel's own sorry story has proved equally important. The seemingly invincible behemoth--once the stock of choice for a vast number of mutual funds and pension plans--came tumbling down in 2001, affecting millions of Canadian investors, large and small, in the process. Douglas Hunter's account of the rise and fall is subtitled How Nortel Burst the Canadian Dream, and that's not an exaggerated claim. The crucially important Nortel story is told clearly and effectively by Hunter, an experienced business journalist who previously authored a biography of Canada's largest family brewer, Molson: The Birth of a Business Empire.

The author tells this "cautionary tale of stock market mania" via interviews with investors, Nortel employees, and stock analysts. He's especially critical of analysts and the business media (termed "the chattering classes") for getting caught up in all the hype, boosting Nortel stock to giddy heights during the tech stock boom of the late '90s before, inevitably, it crashed and burned. In dollar terms, share value went from a high of $124.50 (U.S.) in July 2000 to a low of well under $1.00 (U.S.) by September 2002. In his preface, Hunter notes that "the pathologies of the analyst industry are so vast that they deserve a book of their own," but his critique is a good start.

"A hot stock behaves like a hurricane, generating its own weather," Hunter writes, showing his knack for a well-turned phrase. After following the devastation of Hurricane Nortel, investors who read The Bubble and the Bear may just want to keep their money under the mattress. --Kerry Doole

Review
“The Bubble and the Bear offers a ripping good yarn. And a very instructive one -- for those who lost their shirts, as well as for those who didn’t.” -- The Gazette (Montreal)

“Much of the book is entrancing as Mr. Hunter charts the rise of Nortel, explaining the accounting behind it and the sound messages that the public ignored from those contrarians who sensed something was wrong.” -- The Globe and Mail


From the Trade Paperback edition.

From the Back Cover
“The Bubble and the Bear offers a ripping good yarn. And a very instructive one -- for those who lost their shirts, as well as for those who didn’t.” -- The Gazette (Montreal)

“Much of the book is entrancing as Mr. Hunter charts the rise of Nortel, explaining the accounting behind it and the sound messages that the public ignored from those contrarians who sensed something was wrong.” -- The Globe and Mail


From the Trade Paperback edition.