At this time on Fox Enterprise‘ Varney & Firm, David Bahnsen (The Bahnsen Group) was requested if the present market reminded him of the Dot.com Bubble. He mentioned it did, however not the half about all these nugatory dot.com firms that went bust. Huge firms like Cisco, Microsoft, and Intel additionally had parabolic up strikes, after which they’d parabolic breakdowns from which it took years to get well.
Within the dot.com bubble, there was a perception that firms with a pile of net pages have been going to make a pile of cash. At the moment, there’s a frenzy that’s derived from unrealistic expectations concerning AI. Sure, AI will likely be profitable, however the specifics have but to be seen, and there’s a trace of Tulip Mania within the air.
We do not know the way it will finally play out, however there’ll finally be a bear market, and we are going to see these so-called “bullet proof” shares get shot filled with holes. To reveal what can occur, lets have a look at what occurred to the shares of some strong firms in the course of the Dot.com bust. Simply to be clear, I lived by way of these days, and I can say that in the present day has a really related feel and look. Sure, 9/11 contributed to the decline, however a lot of the injury had been finished earlier than then.
In 2000, pre-iPhone Apple was not the corporate it’s in the present day, however it was a strong firm. It then misplaced -82%, taking 5 years earlier than returning to its 2000 excessive.
Amazon was nonetheless a e book retailer. It fell -95% and took 10 years to get well.
Cisco was one of many biggies in 2000, and it fell -90% and took 22 years to get well.
Intel was one other favourite again within the day. It fell -83% and took 18 years to get well.
If any of those shares was bulletproof, it was Microsoft. It fell a meager -67% and took 15 years to get well.
Lastly, Oracle fell -85% and took 14 years to get well.
CONCLUSION: We have no idea how or when the inevitable “adjustment” will materialize, however we predict it’s certain to occur, as a result of it all the time, all the time, all the time does. We don’t imply to indicate that there will likely be losses much like 2000-2002. However there may be the historical past. Will we study from it?
Study extra about DecisionPoint.com:
Watch the most recent episode of the DecisionPointTrading Room on DP’s YouTube channel right here!
Attempt us out for 2 weeks with a trial subscription!
Use coupon code: DPTRIAL2 at checkout!
Technical Evaluation is a windsock, not a crystal ball. –Carl Swenlin
(c) Copyright 2024 DecisionPoint.com
Disclaimer: This weblog is for academic functions solely and shouldn’t be construed as monetary recommendation. The concepts and methods ought to by no means be used with out first assessing your individual private and monetary state of affairs, or with out consulting a monetary skilled. Any opinions expressed herein are solely these of the writer, and don’t in any means characterize the views or opinions of some other individual or entity.
DecisionPoint isn’t a registered funding advisor. Funding and buying and selling choices are solely your accountability. DecisionPoint newsletters, blogs or web site supplies ought to NOT be interpreted as a advice or solicitation to purchase or promote any safety or to take any particular motion.
Useful DecisionPoint Hyperlinks:
Value Momentum Oscillator (PMO)
Swenlin Buying and selling Oscillators (STO-B and STO-V)
Carl Swenlin is a veteran technical analyst who has been actively engaged in market evaluation since 1981. A pioneer within the creation of on-line technical assets, he was president and founding father of DecisionPoint.com, one of many premier market timing and technical evaluation web sites on the net. DecisionPoint makes a speciality of inventory market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and weblog contributor.
Study Extra
