Tech Stocks Soar Past DotCom Bubble Highs: "It's Not Your Father's Market"

Tyler Durden's picture

"Buy and Hold"... for 17 years to turn a profit.

After a nine-day winning streak the S&P 500 Technology Sector has finaly surpassed its dotcom bubble peak. Today's 992.29 close is above the previous record of 988.49 on March 27 2000.

As The FT notes, the S&P 500 technology index tumbled more than 80 per cent from its March 2000 peak as a wave of young Silicon Valley companies failed. Seventeen years ago, Cisco, Microsoft, Intel, Oracle and IBM were the largest US technology behemoths. While Microsoft remains, it has been usurped by Apple and Alphabet, and joined by Facebook and Visa.

But there's no ned to worry this time...

“The business models of leading technology companies are some of the best we’ve ever seen,” said Rahul Narang, a portfolio manager with Columbia Threadneedle. “These platforms are asset light, grow fast from network effects and are durable as they scale.”

 

“It’s not your father’s market. This is not what it was in Y2K,” said Howard Silverblatt, senior index analyst with S&P Dow Jones Indices. “The make-up and characteristics are different. Earnings are a lot more solid now. There are price-to-earnings ratios now, compared to ‘I wasn’t making any money back in 2000’.”

 

“If valuations got to where they were back in 2000, would I get nervous? Yes, absolutely,” Mr Tierney added. “But we’re far from those valuations. Yes there are a few companies like Netflix and Amazon with nosebleed valuations — but most are not.”

 

“We want to remain in tech because it’s one of the sectors you are seeing such good earnings growth,” said Jim Tierney, chief investment officer of AllianceBernstein’s US concentrated growth fund. “Ultimately stock prices follow earnings. Growth is accelerating not decelerating so you need to be there.”

Of course, inflation adjusted, The Tech sector has a long way to go yet (still 30% off its highs)...

 

"it's definitely different this time"

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Row Well Number 41's picture

It's as if a million counterparties screamed out in terror, and were suddenly silenced.

Jim Sampson's picture

But stawks aren't up/down 20% each day...  we still have a ways to go until we get those crazy swings.

AVmaster's picture

Eww, yuck... gonna bail out before my parachute catches fire...

jamesmmu's picture
BUBBLES POPPING? Treasury Yields, Corporate Tax And US Dollar Tumble … GINGRICH: Boost Economy or Face Cataclysmic Losses in 2018

http://investmentwatchblog.com/bubbles-popping-treasury-yields-corporate...

Yen Cross's picture

  There's no way c/b's exit from this imploding financial "supernova".  The cracks are already opening in Japan, and it's going to get worse.

  Europe has a massive bond crisis brewing, and the only real producers Germany, Italy, France, have yugge macro geopolitcal issues to deal with.

  Italy is facing Italexit, Germany faces refugee crisis, , France just lost it's top military commander, and is over run by muzzies.

 I forgot the " basket case called Spain", and it's sovereign debt issues.

BullyBearish's picture

yes...they DEPEND on this system WORKING to keep them in power...they've stretched it as far as they can and they know that to go much further is to BREAK the system and jeopardize everything they have "worked" for...almost time to LET the pendulum swing back, as soon as they're PERFECTLY ready to take full advantage of it...

ElTerco's picture

Get ready for the front-running Dump that follows the Pump.

Yen Cross's picture

 Some people say OPEX doesn't matter on Friday.

  Maybe it doesn't, because the contracts were purchased knowing an ECB policy meeting was going to be held 24 hours before.

 WE shall see.

ThrowAwayYourTV's picture

Ha! I was just thinking that today. This feels just like the dotcom bubble when all these overnight millionaires starting acting like major assholes. The wives and kids were the worst. Man I saw dogs getting kicked, brand new stuff getting trashed and people acting like anyone without a jet was a piece of shit.

One of the best thing that happened in my lifetime is when it popped and they all went away. Back to the old money where the guy got off a 30 million dollar jet in a suit, walked into the bathroom and came out wearing blue jeans and a t-shirt and was polite as hell.

Money turns young people into major assholes if you ask me.

Bunga Bunga's picture

Should have bought real estate, nothing can go wrong. /s

Anon2017's picture

Lots can go wrong and does go wrong. Ask the last private owners of Northland Center, a one time mall in Southfield, MI just north of Detroit. As of late 2015, the mall was owned by the city of Southfield (for back taxes?), which was planning to demolish most of it. There is nothing like the arrival of the Dindu crowd to destroy a real estate investment.

Anon2017's picture

Intel still trades more than 50% below its 2000 peak, and that number is not adjusted for inflation. 

CoCosAB's picture

"Of course, inflation adjusted, The Tech sector has a long way to go yet (still 30% off its highs)..."

 

SHIT!!!

 

That's a lot of QQE for the FRS to print! And ZIRP might not even BE ENOUGH... Let's go shit crazy and DIVE to NIRP!

saveUSsavers's picture

Hey MOFO parasite, it's all LEGAL FRAUD NON-GAAP now, so you MOFO writers need a broomstick where the sun don't shine was that around in 2000?

PARASITIC SKIMMING COCKROACHES need fumigation

The Count's picture

Freakin bunch of cow manure the stock market. Devised so that the masses get a massive (pun intended) haircut ever so often
and the real owners of America can remain in the shadows.

yogibear's picture

Ask  William Dudley, NY Fed Head, when he and his buddies plan to stop inflating the bubble.

Usually once the last poor retail buyer is sucked in. 

They'll keep pumping it up until all the retail people pile in.

0valueleft's picture

Never go full retail.   I'm a lead farmer Mother Fucker!

Last of the Middle Class's picture

After the near complete 180 Her royal twat at the Fed made last week, who DOESN'T think that's suspicious as hell.