The dot-com period, roughly between 1995-2000, was characterized by extreme investor optimism for Internet-based businesses. This period was also marked by young, bold managers, who made a good deal of money by reaching consumers only over the Internet. Arguably, the dot-com boom was a case of too much too fast and was consequently followed by a crash in March 2000. Jose Menges is a business student at a California State University. For his senior seminar course, he has been asked to compare the stock performance of Internet-based companies with non-Internet-based companies during the dot-com boom-bust period. He collects monthly data on the adjusted closing prices from 1999 to 2000 for four companies. Amazon (AMZN) and eBay (EBAY) are chosen to represent the Internet-based companies, whereas Coca-Cola (COKE) and Johnson and Johnson (JNJ) reflect non-Internet companies. A portion of the data is shown in the accompanying table.

Data for Case Study 19.1 Monthly Adjusted Closing Prices for Four Firms, 1999-2000

In a report, use the sample information to:
1. Compute monthly returns for all companies for 1999 and 2000.
2. Compare the stock performance for the Internet-based companies with non-Internet based companies in the dot-com boom-bust period?

Month AMZN 58.47 EBAY 11.57 13.92 COKE 44.00 JNJ 33.93 34.13 January, 1999 February, 1999 64.06 December, 2000 15.56 8.25 30.844 41.86