The fear of "missing out" is what really gets people. I suspect the IQ range of people who jump on these fads are fairly evenly distributed from start to finish. Isaac Newton, frequently regarded as smart, famously pointed out the Tulip Craze was just that. But the fear of missing out eventually dragged him in too - and too late. He got hosed.
The Dot Com Craze made sense to those who understood internet commerce implications. What they didn't necessarily understand was that 1990s tech and consumer computer ownership wasn't up to those commercial ambitions. But those who invested in the more solid companies, like Amazon or existing companies like Microsoft and Apple laughed all the way to the bank if they held on.
For every Amazon, there were a hundred that went belly up, leaving investors holding a whole lot of nothing.
Yes, Amazon and a few others survived and thrived, over time. Though it took many years for most of them to make a profit.
People weren't investing based on knowledge. They were snapping up any company with a ".com" web site.
It was utterly insane. People were buying any company that launched a web site as an "internet play." I specifically remember one of the more absurd "internet plays" because I drive past the sleepy little town where they make Vermont Teddy Bears when I go to visit my brother.
This tiny, old, bland purveyor of cute stuffed Teddy Bears launched a web site, and the stock shot through the roof. Completely...freakin'...ridiculous.
The company is still there. It's still a small, boring business in rural Vermont. Still makes cute Teddy Bears (perfect for Valentine's Day). But those who "invested" during the mania got hosed because they had no idea what they were buying. Though probably not as bad as most, because unlike most ".coms," this company actually produced a product and actually made a (small) profit.