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Nasdaq 4000 — This Time It's Different?

Posted by Unknown on from the new-and-exciting-bubbles-to-pop dept.

Hugh Pickens DOT Com writes, quoting USA Today "The NASDAQ has topped 4000 for the first time in 13 years, but much has changed since then. ... Tech investors in 2000 were right about the possibilities of the Internet and mobile computing. But they were dead wrong about which companies would be in the vanguard ... The recovery of the NASDAQ has been a complex tale of creative destruction, where old companies that once fueled the index have been pushed aside by new players. Back in 2000, Microsoft, Cisco Systems, Intel, Oracle, and Sun accounted for 8.9%, 8.5%, 7.1%, 3.6% and 2.6%, respectively, of the value of the NASDAQ composite. Today, companies that were just starting out or didn't even exist — think Google, Amazon, and Facebook — are in the top 10, accounting for 4.7%, 2.7% and 1.5% of NASDAQ's value. Microsoft, Cisco and Intel's weight has fallen sharply. Apple, which wasn't in the top 10 in 2000, is a behemoth at 7.9%. So is the NASDAQ enjoying a long overdue catch-up with the rest of the market, or is the broad market overpriced, with the NASDAQ being pulled along for the ride? 'The reality is that the only thing that's the same from Nasdaq 4000 in 1999 and Nasdaq 4000 in 2013,' says Doug Sandler, 'is the number 4000.'"

6 of 241 comments (clear)

  1. Good news for all us have-nots!!! by TWiTfan · · Score: 5, Funny

    Now it's bound to trickle down to us, right?

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    The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
    1. Re:Good news for all us have-nots!!! by i+kan+reed · · Score: 5, Insightful

      Pretty on the nose there. The headline asks "This time it's different?" The answer is "yes, this time the employees aren't seeing any of the money"

    2. Re:Good news for all us have-nots!!! by Anonymous Coward · · Score: 5, Insightful

      Battered down? More like bought themselves into paycheck to paycheck living.
       
      Need proof of this? Take a look at your neighbors. If they're anything like the typical American family today they're driving a car that is worth nearly as much as their home, both of which they're still likely making payments on unless they're in their 60s. 3-4 TV, 3-4 cable boxes, 3-4 media players, hundreds of movies that they've either never watched or watched twice and will never be seen again. Smartphones for dumb kids and 60 dollar video games that have even less ROI than the BluRays and DVDs. Big cable bills for 850 channels that never get watched. Trips to Disneyland that cost more than a year's tuition for junior to go to state college. 40 dollar t-shirts with a NFL teams name printed across it. Tablets and MP3 players that become paper weights after a year because of the flawed perception of obsolescence. Half a day's wages to watch the latest CGI frag-fest with average shot lengths under 2 seconds and music/sound that's louder than a train...
       
      We've gone crazy is what it is. We consume like we're millionaires even thought we see the bills coming in and knowing it's not going good. But no biggie... bankruptcy is there to save us all, right?
       
      People who blame companies for what people consume are about as insightful as people who blame spoons for obesity. Markets don't create themselves without consumers. Not in the long term anyway and certainly in no great numbers. Wasteful spending is the order of the day because people have no desire to live lives that are practical and sane.

  2. Re:BFD by dsginter · · Score: 5, Informative

    $4000 year 2000 dollars are now inflated to $5424

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  3. Quick and dirty analysis post. by Anonymous Coward · · Score: 5, Interesting

    This runnup is mostly QE - the Fed printing money - and also the fact that corp profits are at record levels.

    But it can't continue forever. I don't see in the fundamentals how corp profits can continue their upward trend. Corp America has cut expense to the bone and getting anymore productivity increases out of their employees just won't happen.

    As far as QE is concerned, that money is being borrowed by the hedge funds and other institutional investors very cheaply and funneled back into the market - among other investments like housing. But whenever "tapering" is mentioned, you always see a sell off.

    But that's the market.

    As far as the economy in general is concerned, we are not recovering - we are recovered. This is all there is, folks and the policy makers are too chicken shit to admit it.

    So, what does that mean? As soon as corp profits slide, expect a bit of a sell off but not a crash because all of this QE has inflated asset prices Although, if interest rates spike, there could very well be a huge (20%) correction.

  4. Re:Facebook is still overvalued by tjb · · Score: 5, Insightful

    Over the last 12 months, Facebook, had revenues of nearly $7B and profits of about $1B. You can argue that their stock is overvalued (and I'd tend to agree), but they clearly have a pretty solid business plan.

    http://finance.yahoo.com/q/ks?s=FB+Key+Statistics