The NASDAQ is +50% off its March 2020 lows, the S&P 500 is nearly back to its all-time highs, all while COVID-19 ravages the United States and crushes the global economy. GDP is expected to fall massively this year, hopefully rebounding when a vaccine is out in 2021. Tech stocks like Tesla Inc (TSLA) have soared 350% off their March 2020 lows, now trading at levels where no fundamental metrics come close to any sort of sane valuation. Even names like Microsoft (MSFT) and Apple Inc (AAPL) are trading at historically nutty valuations. While all these things scream bubble, the below tweet is likely the biggest signal and most scary of them all.
Seeing things like this remind me of every bubble top I have lived and traded through. Everyone always says ‘it is different this time’ but it never really is. The dot.com bubble, the housing bubble and many mini-bubbles in between, I have seen and traded them all. This is scary and shocking but investors did this in the late 1990’s as well as buying houses at insane levels with mortgages they could never afford in hopes of flipping the houses and selling them a month later for millions in profits in 2007. We all know how this ends and it is not well. I implore average investors to be careful and smart.
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