by Mish

It’s Only 1997

Bloomberg explains In Dot-Com Bubble Time, It’s Still Only 1997 for U.S. Equities.

“Terrified that rallies in Facebook Inc., Inc. and Google portend a millennial catastrophe along the lines of the dot-com bust? Relax. Going by one doomsday clock, it’s only 1997 in bubble years … when there was still 2 1/2 years and 60 percent to go in what became the longest bull market on record.”

It’s Different This Time

The Wall Street Journal says This Time Is Different: Two Reasons Not to Be Alarmed by the Nasdaq Record.

The Nasdaq Composite crossed the 6000 mark on Tuesday morning, setting another record in a year that is already a hot one for the index, and further putting the old dot-com days in the rear-view mirror. But there are at least two notable old records it has not yet surpassed. One is a measure of how far the index still has to go, the other is a mark nobody really wants to see again.

  1. Inflation-adjusted Nasdaq. Adjusted for inflation, the Nasdaq Composite still has not broken its record high, fully 17 years after that peak, according to data from the Journal’s Market Data Group.
  2. Price-to-earnings ratio. The dot-com boom was such a spectacular feeding frenzy that by one measure of valuation, the Nasdaq Composite is not even at 40% of its peak.
    The companies in the index collectively traded at 27.5 times their last 12 months of earnings, according to Thomson DataStream.

Shiller P/E Ratio

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Base image: Shiller PE Ratio

While waiting for that final 20% (and why should it stop there?) relax. Repeat after me: It’s not bubbly, it’s Bubblicious. Enjoy the ride.

Besides, there cannot be a bubble because, as we all know, it’s different this time. Honest!

Inquiring minds may also wish to consider Reader Asks: Can the Bubbles Last Forever?

Mike “Mish” Shedlock

Don't Worry, It's Only a "Pre-Bubble"

Ray Dalio, who embarrassed himself saying "You’re Going to Feel Pretty Stupid Holding Cash" offers more silliness.

Margin Debt Hits Record High Coinciding With Extreme Consumer Confidence: Analysts Say “Don’t Worry”

The Wall Street Journal reports Margin Debt Hit an All-Time High in February. Given that Margin debt has a history of peaking right before financial collapses this seems like a warning to me but analysts say it’s different this time.

Axel Merk on Volatility, Correlation: This Time is Different. Really?!

Axel Merk at Merk Investments discusses volatility and the next thing likely to blow sky high: Correlation strategies.

Auto Sales Final Numbers: Down 5.7%, Two-Year Low; Don’t Worry, It’s Just a Plateau!

The final motor vehicles numbers for March are now in. First Quarter GDP estimates will dive as sales were far below the lowest estimate.

Things That Don’t Matter

An old saying goes three steps forward and two back. In a guest post by Jason Leach, he wonders Six Month Window and a Fiscal Fumble?

It’s time to shift the arrow.

Yes, Mish readers I am pleased to announce that housing has now reached “A permanently high plateau”. I offer the following quotes from a New York Times article as evidence:

Don’t Worry Weakness is Transitory: Fed Expects a Second Quarter Rebound, Higher Equity Prices

The word of the day is transitory. That’s my take on the release of the March 14-15 FOMC Minutes.

Don’t Worry, Here’s 10 Reasons There Won’t Be a Recession

There will not be a recession any time soon. I can cite ten reasons why.

Hyperinflation Silliness (Times Two)

The hyperinflation proponents are back at it. This time in two parts, led by Jeff Nielson. The most absurd part of Nielson’s claim is his statement “Hyperinflation has already occurred“. His claim is in reference to the US, not Zimbabwe.