The Magic NASDAQ Record Number: 6,941

Fox Business News ^ | 04/27/2015 | Elizabeth MacDonald

[SeekAndFind]

The Nasdaq has surpassed the psychologically important dot-com record, but it would have to rise another 36% to 6,941 to truly be in record territory, taking into consideration inflation and the drop in the value of the dollar since 2000. It could still get there, since Apple (AAPL) and Tesla (TSLA) have yet to report earnings.

Still, after 15 years and two recessions, one great, the Nasdaq has beaten its nominal all-time closing high of 5,048.62 reached on March 10, 2000. The Nasdaq then plunged a sickening 78% by October 2002. Meanwhile, the Dow has hit new all-time nominal and inflation-adjusted 2000 highs.

Analysts say there are many bullish arguments for why the Nasdaq will power beyond its inflation adjusted high. Valuations are cheap now versus the dot-com era of Webvan and sock puppets at Pets.com. Back then, stocks were speculatively valued based on revenue per eyeballs or clicks. The Nasdaq traded at a gut-clenching P/E ratio of 107 during the final days of the Internet boom, compared with today’s P/E of about 25, which is still rich compared to the S&P 500’s multiple of about 18.

Back in the dot-com bubble era, the Nasdaq nearly tripled when it zoomed 189% in the two-year run up to its record close. That’s more than three times the ascent the Nasdaq has risen in the past two years. Also, the Nasdaq is more diversified today; the tech sector comprises 43% of the Nasdaq, versus 57% in the dot-com era. Stocks in consumer services and health care make up 21% and 16% of the index, respectively.

Still, the tech horsemen of the Nasdaq have helped deliver a momentum-driven, apparently solid multiple for the index as the companies that survived the dot-com implosion continue to power the Nasdaq today.

[BenLurkin]

Book value is the current vale of your stock. (at best — considering that the book vale of companies are usually overstated)

But what about PE you ask. True, it is the most common measure of value used. Everyone is speculating on their investments.

Sky high PEs can only spell trouble. Think tulips.

But I am not a financial expert and I did not stay at a Holiday Inn Express last night.

[norwaypinesavage]

The reason we are not measuring wealth by carving stones into circular rings is because of the creation of new wealth. The only reason wealth gets created is because people produce things of more value than their cost. This production can be as simple as planting wheat, or as complex as building and orbiting satellites. And, because of the ingenuity of man, the wealth in the world has increased more-or-less consistently through out history. One measure of this wealth is the value of stocks. I see no reason why they won’t continue to increase, as well, though maybe not consistently.