Some people would say we were already in a Nasdaq bubble. It is quite plausible that we are having, perhaps enjoying, dotcom boom 2.
But right now we do not have 20/20 hindsight to help us much.
As we are not predicting the past it is hard to know what is coming up.
I have wrotten a fair amount of “this is a bubble” pieces on Forbes and the recent “chicken little” squark on Tesla was very well timed.
But how about the whole Nasdaq market? Is it going the same way as Tesla.
Yes and no.
Yes Nasdaq is in a boom. Yes will likely hit bubble territory and if it does it will bust, however right now, we are still in a boom phase.
Here is the key chart pulled off my site ADVFN.
So you have to look at this chart with out hindsight. This is what the dotcom boom looked out without hindsight.
The key of course it the exponential shape of the graph.
The current boom, does look like this. It looks like an early stage of this ride.
The final madness off a boom is a near vertical rise, a ballistic rally that in the case of the Nasdaq took the from just below 3000 to a final high above 5000 in 5 months.
Here is a comparative of todays set up with the 3 year lead up to the explosive rally of 2000.
The charts are eerily similar.
Here is the lead up to the dot com boom.
…and this is now, likely a lead up to a boom market crescendo.
So the thing to look for and perhaps be positioned for is the final massive rally as the current boom turns into a full scale bubble.
Then if it occurs, don’t confuse brains with a bull market and be prepared to bail out with your loot.
The key point is stocks and indexes cannot maintain vertical ascent. So when a market or stock chart forms a full fledged exponential get ready to push the sell button. However you don’t have to be early on that, you can let the rollercoast start its decent and still leave with whale sized profits on your speculative campaign.
So how high could it go?
Well 5000 on the Nasdaq in 2000 would have to be 6800 today adjusted for inflation.
Now wouldn’t that be lovely.