Twenty-one years ago this month…March 2000, what a time to be in stocks, I remember like it was yesterday. The world had gotten through Y2K without any issues, technology was changing everything (again), the much-loved NASDAQ had doubled in just the prior 12 months, Greenspan’s Fed was deemed all-powerful, and market optimism felt boundless. There was nowhere to go but down. Tech stocks peaked that month.
The CRB commodity index also doubled in less than a year but did not peak until 8 months later in November. Commodities, banks and Nortel (before it collapsed in fraud) held Canada’s TSX up until July, then gravity overcame it too.
Commodities surging then too: CRB doubled from Jan 1999 to Nov 2000, TSX peaked in July 2000, 4 months after NASDAQ. We’d made it through the dreaded Y2K, optimism was boundless and then… https://t.co/2hcB4dMtb2
— Danielle Park (@kdaniellepark) March 10, 2021
There are many parallels between 2000 and our present cycle. One big added negative this time: home prices then were not caught up in the market exuberance in 2000. Property prices had been pretty flat for a decade after their ’88-’90 decline and homeowners were nowhere near as indebted. No such luck today.
At this point, the next few months will be breathtaking no matter what happens next.
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