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Invesement Perspectives: Maybe it's not "Just like 1999"

Global equity markets continue to rise on the back of a surging US equity market. The source of the gains remains largely in the large cap technology sector, and specifically to companies that are portrayed at the forefront to the AI boom.

Investment Perspectives: maybe its not just like 1999

The feeling of euphoria is leading some very well-seasoned investors to draw parallels to the late 1990s tech boom (and eventual bust).1

Pricing and profits are feeling disconnected

For those who study the history of markets such observations may resonate. The consequences of AI are almost certain to be profound, much like the rise of the internet in the 1990s. And like the 1990s maybe markets are getting ahead of themselves, and a meaningful correction is in the offing.

Certainly, if we look at the long term relationship between US corporate profits and the S&P 500 there appears to be a similar price-profit disconnect that occurred in the late 1990s. This seems like a red flag.