The Nasdaq’s unique status grows curiouser and curiouser. Here in 2020, the market capitalization value for Nasdaq-listed stocks surpassed the collective value of ALL foreign shares in existence.
It’s as if tech mania can do no wrong.
During the raging stock bull, you wanted to buy the growth-oriented Nasdaq. Knee deep in an ugly recession? The growth-oriented Nasdaq is still “safer.”
Granted, the 2020 Nasdaq may be spearheaded by juggernauts like Apple (AAPL), Amazon (AMZN), Facebook (FB) and Microsoft (MSFT). Obviously, they will survive recessionary pressures.
However, the 2000 tech bubble had its ultra-profitable winners too. For example, the “Four Horsemen” — Cisco (CSCO), Intel (INTC), Dell (DELL), Microsoft (MSFT) — comprised the lion’s share of the Nasdaq 100 (QQQ). That didn’t stop the Nasdaq 100 from losing 80% of its value in the 2000-2002 bear.
Indeed, profitless dot-com corporations represented a huge chunk of the stupidity in 2000. Yet the 2020 stock bubble has its version of money-losing operations as well. They’re called “unicorns.”
Unicorns include names like Square, Snap, Uber, Pinterest, Spotify, Tesla, Beyond Meat and Slack. Are they magically safer than the dot-coms of yesteryear?
If the Nasdaq is safer in 2020, that safety is a byproduct of the Fed’s money printing schemes. Trillions of dollars in Federal Reserve QE wind up in Nasdaq-listed stocks. For now. When solvency issues come to light, investors may look elsewhere for safety.