DOT COM DO-OVER Part 2. Are you ready?What makes 2012~2017 different from 1995~2000? Can you tell me what key factors will prevent a repeat DOT COM (technology) crash?
In 1995~1999, the US was the single biggest and most advanced player in the technology field. Investment poured into these US tech firms as it was the only game on the planet.
In 2012~2017, the US was the single biggest and most advanced economy in the world and tech (FANGs) continued to lead the US markets ROI. Global investment in the US tech market continued to soar and this advancement spilled into other global markets (China, Europe and SE Asia) as expectations (HYPE) continued to soar.
Global markets have shown parallels to the US market with regards to price valuation based on the success (ROI) derived from US investments. If GOOG has risen by n%, the XYZ (foreign company) should be worth comparable values. Think of SNAP, TWITTER, Alibaba and other foreign tech firms. What drives this valuation? How are these firms considered for valuation?? Is it pure HYPE?
Look at the correlation between this chart and the earlier DOT COM chart I posted? See any similarities? Could we be one global event away from total market collapse? All it would take in my opinion would be :
_ Further contraction in the NQ setting up a "right shoulder". (roughly 4~12% correction from highs followed by a small rally).
_ Public perception to continue to HYPE the tech field while erosion in the major markets continues.
_ A single (or multiple) global events to provide the catalyst for the crash (NK, EU, China, OTHERS).
The similarities are freaky and the fact that so many people are missing this. Be aware folks. We could only be 12~24 weeks away from something catastrophic.
XCI trade ideas
Revisiting the DOT COM bubble. Could we see a DO-OVER?Pay attention folks. The NASDAQ and the global markets are setting up for a repeat of the DOT COM bubble burst. In the late 1990s, the DOT COM rise was attributed to a number of factors, most importantly the unique situation where the US was leading the global in technology advancements and web services. Investment in these firms was focused on hope and dreams that tech startups would achieve untold success and profits. Hundreds of billions poured into startups and small shops in the hopes that they would be able to grasp just small percentages of the market and return value like Yahoo, AOL and others. Then came the crash.
The realization of value started near the end of 1999 (after an extended HYPE phase). It became evident that GROUP THINKING resolved the risks to nearly non-issues. People purchased shares because it would never end - but it did. And the Sept 11 terrorist attack in NYC was the icing on the cake in terms of changing public perception. After these attacks, the realization quickly became clear that "technology was not all that" and that other issues were more pressing. Thus, a nearly 60% decline from the highs began.
Could we be setting up for another, almost exact, price move in the near future? Check out this post and the next one I'm submitting.
DOT COM DO-OVER in the next 12 month? What makes 2012~2017 different from 1995~2000? You tell me?