Railroads. Radio. Nifty Fifty. Personal Computers. Biotech. Internet
You see that every few decades there are new bubble/booms. And in every new boom there is a bubble in a few of the leading names.
In the most recent Internet boom the stocks everyone had to own were the “Four Horsemen” of Microsoft, Intel, Cisco & Dell. They peaked with a market value of nearly $1.5 trillion. Combined they bottomed just a few years later with a value of of $250 billion, a loss of 80% from peak to trough. They have since doubled off their respective low-water mark to a market value of about half a trillion.
Today that group is comprised simply of Apple, Google & Amazon. Currently they sport a market value of just over $1 trillion. At their low water mark, at their 2008 lows, they traded with a market value of about $170 billion. They are up almost 500%.
In each bubble/boom, the names that “everyone must own” become ridiculous, yet are justified at their time. Today is no different.
If you enjoy the content at iBankCoin, please follow us on Twitter
Percentage increase =
[(Ending value – Starting value) / Starting value] x 100
So, for the three companies you speak of:
[(1 trillion – 170 billion) / 170 billion] x 100 = 488%
Dell from 1996 to 2000 where it increased from $0.72 to $60:
[(60 – 0.72) / 0.72] x 100 = 8233%
Whoops. I hit the 5 twice, by accident…corrected
Wait, are you saying I can’t get rich buying the Nifty Fifty?
Grpn,lnkd,FB,znga
What will the next batch be?
bonds.it’s a new bag by loui vitton, all the masses will be holding one !