Comments on: So much for that idea: Tech stocks have fallen from 1999 to 2008

Call it the Nasdaq's lost decade, or at least its lost nine years. If you bought shares in most tech companies in October 1999 and sold them today, you would have lost money. And then there's inflation.

[aztracker1]

How about a review comparing today vs. early 2002 when everything was tanking last time around?

[Kwasiowusu]

Yup.
Or even comparing Sept 26th '99 to Sept 26 2008, when the Dow was still over 11,000 and higher than the '99 level?
With stocks up sharply today, nad likely to end this week sharply up, I am willing to bet that a like to like Dow Oct 18 '99 comparison to Oct 18 2008 comparion will be quite different from the above figures.
This snapshot is not too relevant.

[sachingorde]

If you factor in the multiple splits in certain stocks, that will give more accurate picture for comparison.

[swrobel]

Why would you not show the change as a %?

[bomber889]

Hmm, I guess this title is a little misleading. It should probably read "Tech Stocks Have Never Made It Back From 1999."

Too much doom and gloom. It makes it sound like everything is horrible in tech (it never really recovered). However, using his numbers, it looks like things are pretty good for these companies --- just do the math, if you invested equally in all the companies listed above on October 10, 1999 and sold them last Friday, you would have been up over 63% --- a positive return or 5.6% year-over-year, which is better than the average inflation for this period (2.71% --- http://inflationdata.com/inflation/inflation_Rate/HistoricalInflation.aspx) (so I don?t agree with the author on the inflation).

As for comparing the lows of today vs. the lows of 2002, let?s try comparing the highs of 2000 to the highs of last year. First, you can see that tech never regained its losses from that bubble (NASDAQ was still down 44.46% on October 9, 2007 - the Dow?s highest day - from its high of 5,048 on March 10, 2000), but you still would have made over 33% gain if you invested in the companies above and sold them from peak to peak (now this is 4.2% y-o-y, which is less than the returns above, though better than inflation, and still pretty good return --- though I guess not that great for the risk level of this sector, but anyway...).

I don?t know what comparing October 18, 1999 vs. October 18, 2008 (which is actually a Saturday and there would be no trading on this date --- so, let?s just call it Friday the 17th) would accomplish. Would it just show that this week was better than last week, and that this week was better than that of 9 years ago? I guess. But how does that really matter? I guess we could go back and compare random periods of time when these companies were at their highs vs. random days of lows. That does nothing but show volatility (and I guess it also shows how overvalued some firms were in the last bubble --- remember when most investors thought companies like pets.com were worth billions of dollars).

It seems that the bottom line is tech [market value] has never been the same as it was in the nineties. However, if you had invested in these firms, your portfolio would be up for the decade.

Here?s the numbers I used (sorry for the formatting, that?s what happens converting a table to text though):

Oct 10 1999 Oct 10 2008 Mar 10 2000 Oct 9 2007
Amazon 78.62 6.25 -28.45% 66.88 95.32 42.52%
Apple 18.49 96.80 423.53% 31.44 167.86 433.91%
Cisco 33.28 17.23 -48.23% 68.19 33.08 -51.49%
Dell 39.88 13.29 -66.68% 51.25 27.91 -45.54%
eBay 17.83 16.73 -6.17% 24.16 39.1 61.84%
EMC 31.87 10.12 -68.25% 63.64 21.81 -65.73%
HP 26.59 37.00 39.15% 51.58 52.11 1.03%
IBM 86.55 87.75 1.39% 97.2 116.5 19.86%
Intel 33.59 15.19 -54.78% 55.01 25.27 -54.06%
MSFT 39.03 21.50 -44.91% 42.53 29.66 -30.26%
Oracle 11.03 16.68 51.22% 40.81 22.59 -44.65%
RIM 5.46 55.28 912.45% 22.5 115.52 413.42%
Sun 90.00 4.80 -94.67% 188.38 23.84 -87.34%
SAP 32.55 33.87 4.06% 78.61 56 -28.76%
Yahoo 44.53 12.29 -72.40% 89.03 28.37 -68.13%

NASDAQ 2,816.52 1,649.51 -41.43% 5,048.62 2,803.91 -44.46%
Dow 10,470.25 8,451.19 -19.28% 9,928.82 14,164.53 42.66%
S&P 1,301.65 899.22 -30.92% 1,395.07 1,565.15 12.19%

[bomber889]

         Oct 10 1999    Oct 10 2008
Amazon   78.62          56.25       -28.45%
Apple    18.49          96.80       423.53%
Cisco    33.28          17.23       -48.23%
Dell     39.88          13.29       -66.68%
eBay     17.83          16.73        -6.17%
EMC      31.87          10.12       -68.25%
HP       26.59          37.00        39.15%
IBM      86.55          87.75         1.39%
Intel    33.59          15.19       -54.78%
MS       39.03          21.50       -44.91%
Oracle   11.03          16.68        51.22%
RIM       5.46          55.28       912.45%
Sun      90.00           4.80       -94.67%
SAP      32.55          33.87         4.06%
Yahoo    44.53          12.29       -72.40%

NASDAQ    2,816.52      1,649.51       -41.43%
Dow      10,470.25      8,451.19       -19.28%
S&P       1,301.65        899.22       -30.92%

[bomber889]

My Bad --- silly formatting: Try this:

Oct 10 1999 to Oct 10 2008
Amazon -28.45%
Apple 423.53%
Cisco -48.23%
Dell -66.68%
eBay -6.17%
EMC -68.25%
HP 39.15%
IBM 1.39%
Intel -54.78%
MS -44.91%
Oracle 51.22%
RIM 912.45%
Sun -94.67%
SAP 4.06%
Yahoo -72.40%

NASDAQ -41.43%
Dow -19.28%
S&P -30.92%

[buggermenot]

Either your analysis or explanation is overly simplistic.

The only way I can read the article is to assume I held these stocks during this time, so what would I have to show for it (splits, dividends...)? How about versus nontech stocks. How about giving percentages instead of difficult to compare $s?

[declan00]

The article noted that the table accounted for splits and dividends. I also included the DJIA and S&P for nontech stocks. You're right that I probably should have included percentages, though.

[bp92]

In the time frame referenced above, here are the splits totals:

ebay 8:1 (2:1 thrice)
RIM 6:1 (2:1, 3:1)
Yahoo 2:1
HP 2:1
SAP 3:1
SUN 1:4 (reverse split)
Oracle 4:1 (2:1, 2:1)
Cisco 2:1
EMC 2:1
Microsoft 2:1

[declan00]

The table accounts for splits, reverse splits, and dividends.

[amurto]

I don't you mentioning stock splits. For example RIM split their stock by 3 a few years ago. So the $60 stock now is closer to a $180 when compared to 10 years ago.

[declan00]

Excerpt from the article (did you actually read it?): "Those numbers, by the way, are adjusted for stock splits, inverse splits, and dividends."

[amit_kumar13]

I think the author (i.e. declan00) doesn't really understand what split means.

[DarkHawke]

Isn't your time frame too narrow? Like by ten years? I've heard it said that stock investments will always appreciate over a TWENTY year period, even if the twenty year period you choose includes the REAL great crash that signaled the Depression. What do the numbers look like if you go from 1988 to 2008?

All this apart from the fact that the Dow just had its largest single day gain ever today. Great timing on this article, eh?

[kevin-p]

Two words: diversified portfolio.

[gochichi]

Yeah, that only goes to show you how totally imaginary the stock market is.

Microsoft is a great company, they spend a little and make a lot... how that's not a good stock is beyond me. The stock market is a bunch of "moods" put together and not based on reality whatsover.

AOL-Time Warner anyone? A couple of BANKS (banks, you know, the ones that are so unbeliavably irresponsible as to go bankrupt by following their own advice) said, "Apple stock is no good" and the Apple stock took a good dip. Then a couple of days later another couple of banks said, "that prediction was wrong, Apple stock is going to still do great". So the stock recovered a bit. Nevermind the actuality of the company, nevermind that the whole technology of which iPhones are made from is already paid for and costs are low and they are going world-wide with them, nevermind anything the actual company is doing... it's a bunch of moods, it's investor PMS that has stocks all messed up. World-wide iPods, iPhones, and computers all three of which are high margin.

I see no reality to any of this, Microsoft is for sure a great company and since they've been raking in the cash since 1999, I simply don't see how that stock could be worth less. I know that Vista is supposedly a "flop" but when you spend $1.00 developing something and make $1000.00 from that $1.00, is that really a flop? I really don't get it. The stock market is bogus, it's junk and the whole system needs to change so that it's based on some sort of actual assett.

Communal gambling= stock market... really? Is this system for the common good? I mean, I get that the speculator crowd is all over it, but it's ludicrous for the rest of us.

Poor Intel, poor Microsoft... the fact that this system is broken weighs heavily on them. I mean seriously, could Intel be doing a better job at supplying the planet with chips? That stock is down? My goodness. If there were any merit to stock market prices, both of those companies FOR SURE would be worth more year over year. For sure, Apple's stock price wouldn't depend on some junk-bank's ill-formed vision. I mean, c'mon... these banks, they've literally proven their incompetence to us, and we're still basing our actions on their "sage" advice?

Everyone, just a get a grip of yourselves... quit your mass hysteria and open your eyes to the fact, that in fact, there are no facts out of which to base your hysteria. Your hysterical actions are the only thing causing hysteria.

As to stocks "crashing further", I doubt they will... the fickle, hysterical types went crazy and lost a bunch of money in the process. Those that stayed put, are the type to stay put, and they'll continue to stay put because they are the staying put kind. If you're gonna jump out of windows over market fluctuations you may as well do so now, so that we can move on.