Tech Crash 2.0

Alex Pollak

Loftus Peak

Tech Crash 2.0? - What you need to know... The Nasdaq closed last night 4968, which is 80 points off the record reached in March 2000, after which the index fell more than 70%. It has taken almost 15 years to get back there. The question, given the rash of floats around the world, is this: are we heading for the same crash? Consider these data (pictured) sourced from Bloomberg. The PE ratio of the NASDAQ Composite as at 31 Dec 1999 was an eyepopping 151.6x. The number yesterday was 30.1x. Price to cashflow was 33.1x back then, compared with 15.2x now. And the all-important price/sales ratio was 4.8x, compared with 2.1x today. Further, a lot of those measures more than doubled between 1998 and 1999 - meaning that prices certainly rose significantly, but earnings didn't. Leading to prices which crashed. Are we there yet? Almost certainly not... but another year or two with new companies which don't have a profit, and only barely have a business plan, and we will be. As in all things, caveat emptor... (VIEW LINK)


CIO of Loftus Peak, a specialist global fund manager with a track record of successful investment in some of the world's fastest-growing listed businesses.

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