11/9/2023 0 Comments Nasdaq 2000 crashMany companies did not survive the crash, and the whole US economy was heavily affected by it. However, the bubble then burst in 2002, and the stock prices fell to around 78. Grantham also reeled off several reasons he expects the American economy to contract fairly soon: Consumers have virtually exhausted their pandemic savings, the moratorium on student-loan payments has ended, the leading economic indicators are deteriorating, corporate credit is tightening, and the US government faces the prospect of paying onerous amounts of interest on its record amount of debt. From 1995 to 2000, Internet-based companies’ stocks at the NASDAQ Composite Index experienced exponential growth of over 400 in their prices. "The nice bear market will be hopefully less than a 50% decline, but it won't be a huge amount less from the peak than 50% in real terms." "The simple arithmetic suggests you'll either have a dismal return forever, or you'll have a nice bear market and then a normal return," Grantham said. He underscored that the "Magnificent Seven" stocks - which include Apple, Tesla, and Nvidia - had accounted for virtually all of the S&P 500's gain this year. The markets guru said he was bearish on stocks because they were heavily overvalued and had historically returned 5% more than 30-year Treasurys, which seemed virtually impossible at their current levels. As a result, the forward P/E ratio for NASDAQ. While he called the dot-com bust and financial crisis, the " superbubble" in stocks, housing, and commodities he diagnosed at the start of last year is yet to burst. The 2000-crash was the dot-com bubble crash, where investors irrationally priced the dot-coms and related companies, many of which had no earnings. Grantham, the cofounder and long-term investment strategist of the asset manager GMO, is a bubble historian who's known for making dramatic predictions.
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