Saturday, March 15, 2014

Remember February 2000? We're Back

The chart below helps visualize the insanity currently taking place in the IPO market. 74% of the companies taken public in the last six months are losing money. The only example of a period close to this type of liquidity driven euphoric climax was the original dot com bubble back in February 2000. The NASDAQ would peak just a few weeks later before falling 80% (see second chart below). It is staggering that we can be back to this point in less than 15 years. If you like to play Russian Roulette, now is the time to jump into risk assets for the grand finale. You'll notice that at market bottoms investors demand proven companies that are profitable before risking their capital.


Here is the NASDAQ in February 2000 (and then after), the last time we went on this ride:



No comments:

Post a Comment