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Janet Yellen Was Half Right
Just over a year ago, Janet Yellen did the unthinkable. In a moment of clarity, The Fed called out two darlings of the momentum-chasing euphoria-driven stock buying frenzy for 'special' treatment when Yellen uttered the Cramer-mind-blowing fact that "small cap social media and biotech stock valuations were substantially stretched." It appears, judging by today's market, that she was half right...
The equal-weighted basket of nine social media stocks (Angie's List, Demand Media, Groupon, Jive Software, King Digital, Pandora Media, United Online, Yelp, and Zynga) is down 23% since Yellen's truthiness (underperforming the broad small cap universe by almost 32%). However, Small cap Biotechs have soared rather than stalled - now up almost 89% since The Fed chair's drubbing.
Of course - she is actually right about both but timing is everything (just ask Greenspan) as small cap biotech valuations move on to be "substantially stretched"-er.
Charts: Bloomberg
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Down with the Banksters!
Stupid crackers
Half right from the half-wit.
Mr. Janet Yellen is half right as Obama is half Black.
/sarc
Well when I biotech can buy a patent for a $2 drug, then repatent it , and sell it for $2000 maybe the values aren't stretched.
Of course if nobody can afford insurance to pay for the $2000 drug then maybe the valuations are stretched after all.
why would angies list be listed ???
Their are lots of stupid people in the world.
biotechs are riding the obambamacare gravy train. they should be valued at 50 times sales. that chart says they are cheap.
Greenspan admitted he was only right 1/3 of the time.
Bernanke was never right
So if yellen was half right, then things are improving, but I'm still not seeing it. The only ones benefiting from the Club FED are their Banker Buddies (go figure) and the biggest Corporations. Unless your a club member, forget it.