The recent decline in Nasdaq has raised fears of a net taking place in technological actions after years of IA media threshing.
He experienced comparisons with the Dot-Com bubble, which led to the Nasdaq down 78% when he jumped in 2000.
Market professionals say to BI that there are important lessons from 2000 in which investors should think in 2025.
It has been 25 years since the dowry crash, and investors sail again technological bubble reach unsustainable levels.
The Nasdaq Composite culminated on March 10, 2000 and subsequent relaxation would last almost three years, lowering the technological index by 78% to its hollow in October 2002.
The Nasdaq down 13% in the last month, the Recent stock sale Some investors wonder if it is the start of a much longer and more painful correction after years of bullish exubence. Does that seem familiar?
Here is what investors and strategists told Business Insider of some of the lessons hard learned by the Crash of Commun Points.
Whether you look at the Dutch bubble of the 1630s tulips or the Japanese real estate bubble of the 1980s, all market cycles undergo the same phases as investors should be aware.
Ted Mortonson, managing director and technology specialist at Baird, told Bi that these distinct phases include overexuberance, complacency, concern / fear, panic and capitulation.
Dr Jean-Paul Rodrigue, Hofstra University
“Until each phase of the cycle felt, the stockings cannot occur,” said Mortonson.
Dortonson believes that the current market cycle is in the concern / fear zone, which suggests that there is more drop to come.
“We will materially sell in early April fears of growth deceleration,” said Mortonson, adding that the results of the profits in the first quarter will be riddled with failures and advice down in the middle of the continuous uncertainty of President Donald Trump.
According to Giuseppe Spette, president of reflexivity, the assessments of shares should be closely monitored by investors.
The price ratio / long -term benefit of S&P 500 A peak at around 24x in 2000. He recently approached these levels but quickly withdrew, exceeding about 23x in 2021, then again earlier this year.
“The Dot-Com Bulle and 2021 show that 23x-24x Forward P / E is as much as the market is capable of supporting,” said Sette à Bi by e-mail. “Whenever you see 22.5x p / e, a withdrawal is close.”
Although the current stock market is not riddled with companies without profit as it was in 2000, it has its fair share of companies Exchange to extreme assessments – But he also has important benefits to support these assessments.
A good example is NvidiaThe child displays AI boom. The chip titan has increased its net income by 788% Since 2023 and has been negotiated at a slight discount by the S&P 500, although it is on the right track to increase its income by 75% this year.
Although stock market assessments can become uncontrollable, it is generally for a good reason.
The promise of the Internet has proven to be real, and the same will probably be true for artificial intelligence, according to Spette.
“The Dot-Com bubble was” right “on the promise of technology, only the bubble came from 10 to 15 years too early. Now the technology is actually here,” said Sette. “In a 1.5-year-old case, we had an explosion of AI capabilities, and their progress only accelerated. Where will be in 5 years? At what distance from AG? Maybe this time is really different.”
So many companies in the Dot -Com era which collected the promise of the World Wide Web ended up making the gap, but consider that the big winners of that time – companies like Amazon and Ebay – have not only survived but are prospering a quarter of a century later.
According to Brian Belski, chief investment strategist at BMO and the only strategist of Wall Street to have cohered research from the Dot-Com bubble, the stock market is far from being in a bubble.
“It is not because asset prices increase that it is a bubble,” Belski told Business Insider.
“These are the first rounds. In 1999/2000, we did crazy things. As companies bought other companies with stocks, such as bad stock.”
This kind of behavior does not occur at the moment despite the AI boom.
THE Stock market Sleeping for years and has shown few signs of thaw, another sign that the bubble has not yet been swollen.
“In a bubble, everyone earns money,” said Belski.
“Why is AI not a bubble at the moment? Are you taking two steps back and thinking about it. Do the investment banks earn money on this subject? Consign massive primary or secondary offers? Do we see massive consolidation in the activity of mergers and acquisitions?”
Belski thinks that the word “bubble” is launched too often to Wall Street, and that has had a negative impact on the psyche of investors for years.
“The market has been humiliated for a large part of the last 30 years, and each time the market has risen, investors say” Oh it will fall! It will drop. “It is massively different from the late 1990s,” said Belski.
