Thursday, February 26, 2015

A Reasonable High for the Nasdaq

The Dow Jones Industrial Average and the S&P 500 have both notched new all-time highs this week. Meanwhile, the Nasdaq has actually outperformed the two other indexes so far this year - it's up 4.9 percent, as opposed to 2.8 percent for the S&P and 2.2 percent for the Dow.


And the Nasdaq might, finally, set a new record, 15 years after reaching its all-time high during dot-com-mania. Although the index dropped on Wednesday, ten straight days of increases prior to that put the Nasdaq within about 80 points of its all-time record close of 5,048, set on March 10, 2000.

And the good news is that the Nasdaq might set that record in a much saner era, with reasonable valuations of its stocks. When the Nasdaq hit its record in March 2000, its stocks were trading at an average of a whopping 105.9 the last 12 months’ earnings. Now, that same number is down to 20.5.

No comments:

Post a Comment