August 2022
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August 8, 2022

Financials Matter

"It's Not Just About Finance"

Is This the Ghost of Dot.Com?

 

Geesh!

It was only a few days ago when we asked “Is FANGMAN Singing or Teasing?” (Facebook, Apple, Netflix, Google, Microsoft, Amazon, and Nvidia).

It’s where we wrote about the above-mentioned stocks being quite overpriced – to the tune of a combined market cap of $8.4 Trillion – equal to the combined GDP of Japan AND Germany.

So, here we are – only three trading days later – and FANGMAN has lost over $1.1 Trillion in value.

Hmmmm!

For those of you who remember the Dot.Com bubble bursting in March of 2000, here’s a friendly reminder as to how the NASDAQ performed between 2000-2002.

NASDAQ chart.

During the Dot.Com mania, the Nasdaq had a closing high of 5,048.62 on March 10, 2000. It then proceeded to lose 78 percent of its value over the next 2-1/2 years. It reached a closing low of 1,114.11 on October 9, 2002.

If you were “an investor” in the Nasdaq with a “Buy and Hold” strategy, it took you over 15 years just to get even.  (Read:  “I Made My Money by Selling Too Soon” HERE)

This brings us to the question… “Is this the Ghost of Dot.Com?”

Back in 2001 – only one year into the 78% Nasdaq decline – New York Times reporter Ron Chernow described the devastation like this on March 15, 2001:

 

“Let us be clear about the magnitude of the Nasdaq collapse. The tumble has been so steep and so bloody — close to $4 trillion in market value erased in one year — that it amounts to nearly four times the carnage recorded in the October 1987 crash.”

 

Cue up today’s young, starry-eyed Robinhoodites – aka Millennial Day Traders – who’re convinced that the markets only go up.

Ironically (or NOT) the recent air-pockets in the markets are usually a harbinger of things to come.

They don’t remember that of the $4 Trillion of investors’ money lost back in 2001, Wall Street Banksters got off with slaps on the wrist’s penalties of a mere $875 Million.

Do the math…that’s a fine of 0.00021875.

Keep in mind, no one went to jail.

So, if what we’re seeing today is The Ghost of Dot.Com, how are you prepared to deal with it?

Be sure to read our September newsletter where we lay out two scenarios to plan around the imminent volatility rapidly approaching.

We also show you how to prosper AND thrive in Turbulent Times.

 

It’s Not Just About Finance.

 

 

 

 

 

 

 

 

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