Tech Tock Tech Tock…
News
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Posted 17/05/2017
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6283
Remember the dot-com crash? The NASDAQ dropped nearly 80% very very quickly.
Right now we have the NASDAQ hitting new all time highs, and don’t think it is just a contained ‘tech thing’ either. The S&P500 (the world’s biggest index) has relied on just 10 companies for nearly half of all gains year to date (and that is scary enough). The first 5 are all tech: Apple, Google, Facebook, Amazon and Microsoft. The table below shows the performance, and more amazing still the relative size (far right column)…
![](/root/NewsArchive/Images/2017/5/SP500-20top-2010-20Mar17.webp)
Now let’s look at the NASDAQ now compared to the dot-com bubble:
![](/root/NewsArchive/Images/2017/5/nasdaq-20may17.webp)
But the dot-com bubble was because the market got carried away with the concept rather than the reality (Snapchat anyone?). It ‘was different this time’. No it wasn’t. What about this time?
![](/root/NewsArchive/Images/2017/5/nasdaq-20v-20EPS.webp)
No surprises then that Bank of America Merrill Lynch’s latest Fund Manager Survey found it was the most crowded trade:
![](/root/NewsArchive/Images/2017/5/most-20crowded-20trade-20May-202017-0.webp)
Because like last time confidence was soaring, everything was awesome, fundamentals didn’t matter:
![](/root/NewsArchive/Images/2017/5/nasdaq-20consumer-20confidence.webp)
As a reminder, if your shares drop 80%, you need to make 500% on what’s left to just get back to square… But it’s probably nothing….