All the talk lately is about the much belated return to 5,000 on the Nasdaq, a level not achieved since just prior to the bursting of the Internet bubble in 2000. The tech-heavy index has risen about 15% over the past year and has jumped more than 100% over the past five. Now shares of the companies in the index trade for 31 times trailing earnings, a premium of 67% to the valuation of the stocks in the S&P 500. You can’t help but wonder if the Nasdaq is in for another tumble. To be fair, things are… Read More
All the talk lately is about the much belated return to 5,000 on the Nasdaq, a level not achieved since just prior to the bursting of the Internet bubble in 2000. The tech-heavy index has risen about 15% over the past year and has jumped more than 100% over the past five. Now shares of the companies in the index trade for 31 times trailing earnings, a premium of 67% to the valuation of the stocks in the S&P 500. You can’t help but wonder if the Nasdaq is in for another tumble. To be fair, things are not the same as they were in 2000. Back then, the index reached a valuation of 175 times trailing earnings and startup tech companies dominated the price action. Today, tech companies make up just 55% of the largest 100 companies in the index, followed by consumer stocks (27%) and health care (14%). But just because it’s not an obvious bubble does not mean we can sound the all clear. #-ad_banner-# The Bubble Chorus Grows Some notable investors have joined a… Read More