NEW YORK (CNN/Money) - We call it 9/11, but it's come to mark more than the events of one terrible day.
It's become a sort of dividing line between a period of exuberant innocence and a more sober, sadder time. The bursting of the stock bubble began in 2000, corporate scandals were events of 2002, but they all fit into the same before and after picture.
Trust doesn't come as easily anymore, and everybody has a heightened sense of risk. The first thought when the power went out in the Northeast last month? Terrorism. Wall Street offices cleared out fast -- far faster than they did on the morning of September 11th when many people reckoned a small plane had strayed into the World Trade Center.
But trying to quantify, exactly, the effects of this heightened sense of risk is something we just can't do. We know, for instance, that companies have devoted far more time and effort toward security than before, and that good managers are mindful of the terrorist threat and the potential that business will slam to a halt.
But is it the terrorist threat that's kept companies to the sidelines, preventing them from hiring back workers? Maybe it's just that they've seen so many economic false starts over the past three years that they've become gun shy. Maybe it's that they're still working off the excesses of the bubble years, or that the accounting scandals have cowed them into conservatism.
Absent the threat of another terrorist attack in the United States, there are still huge geopolitical risks lurking, and those, too, are hard to sort out. Would we be in Iraq if it had not been for September 11th? Did the war in Iraq make the world a safer place? How long will our troops be there and how much money will we have spent when it's all over? What will the economic effects of that be?
For investors, the persistent question is whether the prices they're paying now for stocks adequately compensate them for a less-safe world. Valuations look the same if we look at them based on the past year's earnings -- the S&P 500's price-to-earnings ratio of about 20 is right where it was September 10, 2001. But with the economy at the beginning stages of an apparent growth spurt, perhaps current prices are justified. We'll see.
Outright prices are lower, of course, if we are talking about the S&P 500 or the Dow. If we're talking about the Nasdaq, they are not -- it is up around 8 percent from where it was before the attacks, and in fact investors have been buying many of the same stocks that drove the market in 1999, back when the world was such a different place.
Maybe it's nostalgia at work. We miss our old lives. We want them back.