The 2000 Bubble

Cisco stock is down about 8 percent today as I'm typing. It grew earnings more than 500 percent since the year 2000. Its stock failed near the 2000 peak in August 2021. Perhaps today's drop is part of a final dip before completing the base and breaking out. Or perhaps the all-time high is in the rear view mirror.

Intel made a new high, but has now lost its uptrend from the 1980s.

Microsoft fared much better, but it's price-to-earnings ratio of 60 in 2000 was a better value than nearly 40 now, in my opinion.

Apple was not a bubble stock in the 1990s, but I'll include it here as a warning about how late in the game it is for this cycle.

Amazon of course was a bubble stock in the early 1990s, but a deserved one. The company did better than most bulls would have guessed in 1999. Still, the stock would drop 95 percent from its high and didn't recover those losses until 2008. Amazon, Google, and Apple are among the most likely candidates for being the next Cisco or Intel. Not because of extreme valuation so much as their business models will come under attack from all directions.

Tesla is the poster-child for this era's excess. If Musk doesn't fold more businesses into Tesla, I wouldn't be surprised if it ends up like JDS Uniphase. The company split in 2015, the spun-out unit is in blue.