Since the Nasdaq bubble burst

February 20, 2015

People are nothing if not resilient; entrepreneurs even more so.

At market close on March 10, 2000, the Nasdaq composite hit 5048.62, an all-time high. Today, Nasdaq edged back to those all-time highs but exuberance was yielding to reason. As this Reuters graphic shows, the list of the Nasdaq’s top 10 most valuable companies looked a lot different then.  Microsoft sat atop that peak-of-the-bubble market, with a market cap of $525.4 billion; but Facebook didn’t yet exist, Google wasn’t public and Apple closed the day at $4.49, about one twenty-eighth of its price today.

In the intervening years, Cisco and Intel have fallen out of the top 5; Oracle, Sun Microsystems and Yahoo! have tumbled from the top 10; and Dell has gone private. Microsoft shed $166 billion in market cap and fall to second place behind Apple, which at $754.9 billion in market cap beats Microsoft’s $358.8 billion and Google’s $337.7 billion combined.

In his book Zero to One, Peter Thiel writes:

The Nasdaq reached 5,048 at its peak in the middle of March 2000 and then crashed to 3,321 in the middle of April. By the time it bottomed out at 1,114 in October 2002, the country had long since interpreted the market’s collapse as a kind of divine judgement against the technical optimism of the ’90s. The era of cornucopian hope was relabeled as an era of crazed greed and declared to be definitely over.

As we now know, greed was just taking a nap, soon to be awakened by sub-prime housing money, and technical optimism today runs stronger than ever in a millennial generation that remembers the dot-com bomb as a history lesson. One can be certain that in 15 years the Nasdaq will in look different than it does today, a fact that in itself serves to energize the future leaders of 2030’s tech giants, whether they know it yet or not.

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