Fifteen years ago yesterday, March 10, 2000, the NASDAQ Composite Stock index peaked at 5,048.62; on March 10, 2015, it closed at 4,859.79, just 3.7% short of the all-time high.
Interestingly, there are only three companies that remain on the top ten NASDAQ list (see yellow boxes). Moreover, today’s companies are much more reasonably priced, per the P/E ratios below.
Also, the unemployment rate in March 2000 was 4.1%, compared with 5.5% in February 2015, suggesting that as people get back to work, there will be more spending and, therefore, more earnings for today’s companies.
As we approach the all-time high for the NASDAQ Composite, we think stock prices have further to go as the economy develops in an environment of reasonable P/E ratios.