Posted on 11/26/2013 4:55:42 AM PST by SeekAndFind
The stock market may very well be overvalued right now.
Indeed, with the Nasdaq Composite Index COMP +0.07% finally trading above the 4,000 level this week, the first time in 13 years, comparisons to the Internet bubble are perhaps unavoidable.
Nevertheless, a sober assessment of the data shows that the market today is well less overheated than it was in December 1999, the first time this index traded above 4,000. In other words, whatever else you say about what’s happened over the last 13 years, at least some of the overvaluation that prevailed at the top of the Internet bubble has been worked off.
Consider the data in the accompanying table, which focuses on several popular valuation metrics. I think you will agree that whatever else you think about the market’s current valuation, the situation today is far different than what prevailed in late 1999.
(Excerpt) Read more at marketwatch.com ...
4,000? How about when it closed above 5,000?
There was’t much time between 4000 and 5000. Unfortunately, there also wasn’t much time between 5000 and 2000.
Another article in which the numbers are not adjusted for inflation.
$4,000 today has the same buying power as 2,853.40 in 1999.
Also, the childish fascination with numbers ending in zeros is pretty foolish.
The Nasdaq index is calculated using a market weighted capitalization method on all stocks in the index. It’s not measured in dollars. ie: $4,000
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