How Does This Compare to the Dotcom Bubble?

Tale of the Tape

Good evening folks. 

Stocks ripped again today and, more and more, we’re hearing the following question.

“How does this compare to the dotcom bubble?”

Look, there are similarities, sure, you got your abject speculation and your insane stock moves of the day. Plus, there’s this growing perception of a complete disconnect from reality. To name a few.

And there are differences too. There’s little euphoria at least so far, plus real tech mega-caps, which make gobs of money, like Apple – are shouldering a significant amount of the advance.

But here’s the poetry and the only honest reply to the question: 

There’s no way to know for sure until it’s all over and we’re performing the post mortem.

Sorry kids… Place your bets.

Here’s your closing prices on the major equity indices for Monday, July 6, 2020:

S&P 5003,179+1.59%
Nasdaq10,433+2.21%
Russell 20001,442+0.77%
Dow Jones26,287+1.78%

Nasdaq Freaks

The Nasdaq composite has been an absolute freak in 2020. Here are a few notable performances from today. 

Amazon crossed the $3,000 mark while its market cap skyrockets to $1.5T. 

With this milestone, the stock is now a 500 bagger from the low close of 6.01 in October 2001. LOLZ!

Tesla continues to go berserk. $TSLA jumped another 13.5% and is now up 227% YTD. 

Get this, JP Morgan analyst, Ryan Brinkman, raised his price target on Tesla from $275 from $295. The stock is almost at $1400/share. Ryan might be worse than a weatherman. A bad weatherman 😂

Netflix closed at all time highs. $500 incoming?

Facebook gained 3% and is only a stone’s throw away from ATHs. Remember the advertising boycott?

China 🇨🇳

China stocks have been rockin’. It feels like Xi and Trump are trying to see who’s got the bigger, uh, stock market. 🙂

Today iShares China ETF, $MCHI ticked levels not seen since February 2018. Check out the weekly chart.

$MCHI is only 1.3% off its highest close ever. Will China break to new highs? Place your bets… 

Nio, the Chinese electric car maker jumped 22.71% today. $NIO is trading at its highest level since its IPO in September 2018. 

The Stocktwits’ $NIO stream was poppin today. Message volume was up 38% with nearly 11,000 messages, the highest total all summer. 

Ivy League Shmivy League

Today, Harvard announced that course instruction for the full 20-21 academic year would remain online.

The Ivy Leaguer will still charge almost $50,000 in tuition.

Sorry guys but we’re calling bull hockey.

There’s this whole theory about how COVID-19 and the quarantine accelerated certain technology trends related to the cloud, digital media, working from home, etc. It’s part of the reason why companies like Zoom, Datadog, and Netflix are running so fast and so far.

Let’s stop and think a minute about traditional universities and the disruption they have coming to them. Maybe COVID is also accelerating the disruption in this space as well.

The private colleges especially have been charging a ton and raising tuition faster than inflation. Student debt is out of hand and we’re being kind.

Meanwhile, there is so much incredible information accumulating on the internet for free.

You could spend hours a day forever listening to podcast interviews with geniuses and never run out of content. Ever.

Let’s name just a few in the finance space:

Investors Field Guide
Masters In Business
Capital Allocators Podcast
Infinite Loops
Animal Spirits
Planet Money
Choiceology

That’s over 1000 hours of awesome and this is only a small sampling. Your move Harvard…

Oh, and to everybody who’s saying, “yeah but kids go to Harvard for the network not for the education.” 

Well, that’s getting disrupted too.

Now, if you’re brilliant, you can find potential mentors and professional networks online and build the attention of others like Julian Bass catching Disney Executive Chairman Bob Iger’s eye. No Ivy required.

Uber to Buy Postmates

Earlier today, Uber agreed to buy Postmates, a food delivery startup, for $2.65 billion. The acquisition will be an all stock transaction slated to close in Q1 of 2021. 

Uber layed off 14% of its workforce in May and took a $2.9 billion loss in Q1 of 2020. The company did see revenue from the UberEats division grow by 53% with bookings up over 54% year over year. Combined, Postmates and Uber will have a 37% share of food delivery sales in the United States.

$UBER closed up 6%.

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