Are we witnessing the collapse of another Dot Com Bubble? As I mentioned in a previous post, 2016 may very well be the year of stock market crash and a deep recession. And the signs seem to point to that so far …
Look at the performance – as measured from their recent highs – of the top tech stocks and some other IPO darlings of the last couple of years:
Facebook and Google down 15% & 10% respectively
eBay down 20%
Amazon, Apple, Salesforce, Alibaba, Priceline, Expedia and First Data – down 30%
Yahoo, Netflix, Ferrari, Match and Square – down 40%
Tesla, Box and Shopify – down 50%
LinkedIn, Pandora, Shake Shack and Yelp – down 60%
Tableau and Twitter – down 70%
GoPro – down 90%
Looking at the bigger picture, the 462 information technology stocks in the broad Russell 3000 index have shredded a total of $529 billion this year, thanks to their average decline of 14% (source).
As you can see in the featured picture, during the first Dot Com Bubble, the crash continued for 2.5 years, from March 2000 to Oct 2002. So, this drama may last for a long time as well.
And, oh, guess what is up 8% this year so far? Gold!
Good luck and be cautious.