--- title: Warren Buffett Skipped the Dot-Com Boom, Got Called Out and Beat the S&P 500 the Next Year description: Warren Buffett's approach to the dot-com boom and bust illustrates why investors should avoid acting on FOMO. authors: - name: Marc Guberti url: https://money.com/author/marc-guberti/ bio: Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations. at_money_since: 2024 articles: 470 covers: - Investing - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes published: '2026-11-11T14:00:18.000Z' section: Investing word_count: 439 canonical: https://money.com/warren-buffett-dot-com-boom-sp500/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![The White House Council On Women And Girls Hosts The "United State Of Women" Summit In D.C.](https://img.money.com/2026/11/Explainer-Warren-Buffett-FOMO.jpg) It’s normal to feel like you missed out during stock market rallies, especially if you have a large cash position. But that doesn’t mean you will necessarily underperform the market. Legendary investor Warren Buffett took some heat in 1999 for avoiding technology stocks, and he even gave his own performance a "D" grade that year. Buffett, however, was well-prepared for the dot-com crash and beat the S&P 500 the following year. It’s a lesson in not giving into the fear of missing out (FOMO) and to not make investing moves just because it feels like everyone else is doing it. ## What Buffett did in 1999 Buffett has consistently advocated for buying what you know, and for a while, Buffett didn’t know the tech industry very well. He hinted at that in his 1999 letter to Berkshire shareholders. “We don't own stocks of tech companies... we have no insights into which participants in the tech field possess a truly durable competitive advantage,” Buffett wrote in that letter while grading his investment performance a "D." He stuck with companies that he knew well and felt more confident about holding in the long run. While this strategy can result in missing growth opportunities like we saw during the dot-com boom, it also allowed Buffett to avoid much of the pain of the dot-com crash. ## The criticism A Barron’s [article](https://www.barrons.com/articles/SB945992010127068546) titled “What’s Wrong, Warren?” published on Dec. 27, 1999 captured much of the criticism Buffett faced at the time. It discussed how the investor may have been “losing his magic touch” and becoming too conservative. It said he wasn’t able to “make the next leap forward and adapt to the current technology-driven bull market.” A few months before the article was published, Buffett made a speech at Allen & Co.'s Sun Valley conference in July 1999, warning about high tech valuations. ## What happened next Berkshire shares lost 19.9% of their value in 1999, while the S&P 500 was up around 21% for the year. But in 2000, Berkshire’s stock rose 26.6% while the S&P 500 dropped by 9.1%. The Nasdaq Composite fared much worse, dropping by about 78% between March 2000 to October 2002. ## Focus on diversification and avoid FOMO Investors can buy stocks even when large crowds are rushing to buy the same ones, and the strategy can produce long-term returns. But it can also result in major declines. Financial advisors often recommend taking a page out of Buffett’s book and trying to avoid acting on FOMO. Focusing on maintaining a diversified portfolio and [investing](https://money.com/investing/) for the long term is typically a better move for investors saving for goals such as retirement. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/warren-buffett-dot-com-boom-sp500/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Stock Market", "item": "https://money.com/stock-market/" }, { "@type": "ListItem", "position": 4, "name": "Warren Buffett Skipped the Dot-Com Boom, Got Called Out and Beat the S&P 500 the Next Year" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/warren-buffett-dot-com-boom-sp500/#webpage", "url": "https://money.com/warren-buffett-dot-com-boom-sp500/", "name": "Warren Buffett Skipped the Dot-Com Boom, Got Called Out and Beat the S&P 500 the Next Year", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-11-11T14:00:18.000Z", "mainEntity": { "@id": "https://money.com/warren-buffett-dot-com-boom-sp500/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/warren-buffett-dot-com-boom-sp500/#breadcrumb" } }, { "@type": "Article", "headline": "Warren Buffett Skipped the Dot-Com Boom, Got Called Out and Beat the S&P 500 the Next Year", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/11/Explainer-Warren-Buffett-FOMO.jpg", "width": 1024, "height": 703, "caption": "Explainer-Warren-Buffett-FOMO" } ], "author": [ { "@type": "Person", "name": "Marc Guberti", "url": "https://money.com/author/marc-guberti/", "@id": "https://money.com/author/marc-guberti/#author", "description": "Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations.", "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2026-11-11T14:00:18.000Z", "description": "Warren Buffett's approach to the dot-com boom and bust illustrates why investors should avoid acting on FOMO.", "abstract": "Warren Buffett's approach to the dot-com boom and bust illustrates why investors should avoid acting on FOMO.", "@id": "https://money.com/warren-buffett-dot-com-boom-sp500/", "inLanguage": "en-US", "wordCount": 439, "about": [ { "@type": "Thing", "name": "Investment", "sameAs": [ "https://en.wikipedia.org/wiki/Investment" ] }, { "@type": "Thing", "name": "Stock market", "sameAs": [ "https://en.wikipedia.org/wiki/Stock_market" ] } ] } ] } ```