Just a quick and interesting observation.
On Friday, March 10 2000 (today 11 years ago), NASDAQ Composite peaked at an intra-day high of 5,132.53, it closed at 5,048.62, this is the all time high for NASDAQ.
On Monday, March 13 2000, the dot.com bubble bursted and it declined in 19 months to an intra-day low at 1,108.49 on October 10 2002. A decline of 78%!
Today, NASDAQ is at 2,700, almost 150% up since October 2002.
Again, greed dominated until March 10 2000, and this was unprecedented greed. Bill Gates net worth at the time was $100 billion, because Microsoft shares were traded at almost $60 (split adjusted). Craziness was dominating the market.
As a value investor what I do is I follow craziness. I look where craziness is taking place on the market, in 1999 - 2000 it was tech-stocks, in 2006 - 2007 it was the housing/credit market, once every 10 years we will have a heavy craziness taking place somewhere on the market. It is not difficult to spot it, but it is important to pay a close attention to it and be ready when the bubble bursts and the market goes south, this will create a value for future investing.
In the words of Warren E. Buffett "...be fearful when others are greedy and be greedy when others are fearful."
Happy investing!
Damian Kosutic
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