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Source: WSJ interactive
Great piece in today’s WSJ comparing the Nasdaq today versus 12 years ago:
“In November 1999, the technology world was ablaze with an investment frenzy that favored unprofitable, unproven companies that were valued for their potential “clicks” and “eyeballs.”
Now, the biggest 100 Nasdaq-listed companies look a lot more like their more sedate counterparts on the Dow Jones Industrial Average.”
What are the key differences between 1999 and 2012?
-Tech stocks are cash rich (in some cases, crazy rich)
-Almost half pay dividends.
-Raise money in the bond market, carrying 10X debt than 1999 at ultralow rates;
-Price-to-earnings ratios are average.
-Companies are much more stable, earnings more reliable multiples more rational
-Tech stocks are once again outpacing rest of the market — Nasdaq up ~15% YTD vs 5.8% gain for the Dow
Good stuff . . .
A Coming of Age for Nasdaq
Tech-Heavy Index’s Solid Profits, Sane Valuations Differ From Bubble Era
By JONATHAN CHENG
WSJ, March 11, 2012