Reactions to stock carnage: "The bubble has burst"

Tim Draper
Founder and managing director at the venture capital firm Draper, Fisher Jurvetson

It presents a buying opportunity, but I really look at this as a result of Judge Jackson sending a chill down the spine of every venture capitalist and Wall Street investor. Because that case sent a message that a company can get big but not too big because government will make life miserable. People are thinking -- consciously or not -- that no company will be allowed to get as big as Microsoft. The decision was criminal. Jackson does not understand what he's done; he does not understand what he's doing.

Also, the market's gone down significantly because of margin calls: They get called in and investors have to sell so it spirals. So maybe this was the last of it or maybe it will be a few more days before it pops back up. But it won't pop up to where it was.

Still, the Web is changing the world economy no matter what: Wall Street can swing up and down, but the overall trend is toward value creation. No matter how Wall Street values these companies, there is still a tremendous amount of opportunity.

One other thing is that it might be possible that this [drop] is, in effect, a sign that companies are having trouble growing beyond a certain size because they're having trouble finding qualified workers. Companies like Hewlett-Packard may be limited in their growth because we haven't built our work force, our farm team. We've got to fix education -- put school vouchers in place to allow the population to become educated so they can participate in the economy -- or we need to allow for more HB-1 visas, loosening immigration to let in more professionals from other countries.

- - - - - - - - - - - -

Kevin Hassett
Resident scholar at the American Enterprise Institute, and author of "Dow 36,000"

There's no reason to panic. Investors should keep holding, keep buying. People need to learn that making money in the stock market is hard work. You have to keep holding when everyone else is panicking. That's how it works.

The market could go down more in the next few weeks, more in the next year, but if you hold onto stocks for longer than that -- for the next five years -- the market will return.

It's all short-term bad news. The Microsoft case has inspired fear, as people begin to worry that government is going to get involved; Greenspan has implied his desire to see the market drop; and there are all the experts out there trying to scare people out of the market. I think Greenspan has been wrong about the market for four or five years, and now he wants to be proved right.

Ultimately it boils down to whether companies are making money and historically American firms steadily increase their profits. Even in the midst of more difficult times, with racial strife and war, they've profited. So I don't think there's anything to justify what we're seeing today. Five years from now will we remember today? We might talk a little bit about it, but investors will largely forget -- and move on.

• View blog reactions