The Austin Report warned of the coming Dot Com Bust a year ahead of unwinding of the NASDAQ bubble between 1995 and its peak in March 2000 and subsequent crash. The internet driven frenzy of NASDAQ Stocks rose 400% only to fall 78% from the October 2002 peak giving up all its gains during the bubble. Many investors lost everything speculating on the hype of companies who had never made a dime of profit.
Is High-Tech History About to Repeat Itself?
Clearly, Stocks trade at historic highs. Today, we’re again sounding warnings. But, these are not our lone opinions, they’re warnings published in Bloomberg with headlines today that read:
Goldman Team Sees ‘Unsustainable Excess’ in Parts of U.S. Market
By Joanna Ossinger January 24, 2021 READ HERE
Another Warning Today from Yahoo! Finance
Goldman Sachs warns of a dangerous bubble in these 39 stocks
Brian Sozzi · Editor-at-Large, January 25, 2021
Goldman’s U.S. equity chief David Kostin writes despite Goldman’s Research showing—
“U.S. stocks today trade at the upper-end of historical metrics for:
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Price-to-earnings,
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Price-to-book,
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Enterprise value-to-sales,
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Enterprise value-to-EBITDA
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Market cap to GDP…”
Goldman includes a list of 39 Stocks that are highly overpriced and subject to correction if financial results of the companies fail to live up to the market hype. READ HERE
ANOTHER ARTICLE FROM BLOOMBERG.COM
Bubble Fears Everywhere But All Investors Can Do Is Keep Buying
By Cecile Gutscher and Sam Potter January 25, 2021. READ HERE
Austin Report Opinion: We fear for a crash of epic proportions in certain high tech areas. It feels to us like a replay of the Dot Com Era boom and bust. Overall, the U.S. Stock Markets are beyond “frothy” and beyond “bubble-like” and clearly in a liquidity driven market where evaluations in most areas are very risky and very high.
Optimism is great, euphoria is dangerous, especially when investors are unwilling to acknowledge the reality of a worldwide pandemic which continues to further damage the world economy and specifically the consumer-driven U.S. economy.
For all the market optimism that abounds, we believe that the global economy will need a powerful recovery to justify lofty valuations in global stock markets. Bubbles like this always end in a bear market for Stocks like the Dot Com Bubble. Market insiders made huge gains but the average investors watched the irrational exuberance of 2000 end in a 78% crash from the October 2002 peak giving up all its gains during the bubble.
