The comparisons seem to be nonstop and it leaves us all wondering if we are doomed to the same fate. A lot has changed since then. There are many new trading products that help hedge against a crash and the “circuit breakers” are much quicker to pull the plug.

But is it enough? And didn’t we feel the same way then? That we were so advanced, how could it happen? Take a look at what the markets were focused on back in February 2000 leading up to the crash in early March of that year. It is important to see these as they could be written today:

“Upside-Down Market Has Its Own Rules for Investors” Wall Street Journal from Feb 2000. Could be true today with markets seeming to accept unprecedented valuations of AI companies.

“Technology Shares Lead Nasdaq Composite Index to a Record High” New York Times Feb 9th, 2000. This sounds exactly like what we have been reading again and again. Not only were markets rallying to new levels, those breakthroughs were big news each time. What you don’t see in this snapshot is that traders had become equally as desensitized to new highs as we are now.

Here are a few more that may make your stomach queasy.

“Rate Increase Pulls Dow Below 11,000, but Nasdaq Holds Solid” from the New York Times, February 3rd 2000. Many forget that pending rate increases were a big issue then making it harder for startups to get capital.

“Tech Shares Added to Index” from the Wall Street Journal, February 2000. This sounds very similar to the attention being paid to SpaceX getting added to the NASDAQ 100.

This last one may give you chills.

“Nasdaq Shatters 5000 Barrier as Tech Stocks Soar” March 9, 2000 (two days before the burst) from WIRED magazine. The fact that new highs were absolutely clueless to what would begin just two days later.

This is all a strong reminder to be cautious about putting to much faith in headlines.

Keep learning and trade wisely.

John Boyer

Editor

Market Wealth Daily