Hi, as a longtime lurker on here curious to hear your guys’ thoughts. Obviously we can all see the shitshow in the markets today, which prompted me to post this.
YTD the Nasdaq 100 is down >20%. Across the wider Nasdaq the situation is worse in that big tech is holding up the index, with numerous mid-size tech companies down well over 50-60%. I realize the Nasdaq is still massively up from a few years back – but that could also be an argument for a continued decline/tech staying flat for a long long time afterwards (think about the number of years post 2000 it took for tech to recover).
Also makes me wonder if we’ll see a similar post-dotcom effect where tech “stops being cool” in terms of working there, given for the last decade junior software engineers have been easily earning $200k+ through stock options/RSUs. Will that now end? I realize the contraction of QE has hit the whole market but tech has been particularly hammered.
On the flip side, the companies in the Nasdaq 100 are nothing like the dotcom era. I was only a teenager back in 2000 but from reading up on it the majority of dotcoms were much more akin to Nikola, Lordstown, Contextlogic etc – ie companies in industries that would grow but the company itself had no realistic longterm future. Compare that to today when big tech companies are near monopolies and are endlessly churning out monster revenue and profits. Yet that doesn’t necessarily mean they won’t stagnate in terms of their valuations over the next few years given how much the Nasdaq has risen in the last decade.
Or is this a fantastic buying opportunity, ie once the market adjusts to QE being withdrawn we’ll see a strong recovery rally over the next few months or in 2023? I realize no-one really knows what’s going to happen, but interested to hear your guys’ thoughts.
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