Jeremy Siegel dismisses possibility of another technology bubble

Q: The valuations of leading technology stocks are more reasonable today than in the dot-com years of 1999 and early 2000, even if some are stretched.  Are you concerned about the possibility of another technology bubble? 

Jeremy Siegel: We have always had momentum traders in the market, and momentum investing can be a fairly successful strategy.  People ride the wave with the belief that they can jump off before it crashes.  That, of course, doesn’t often happen.  But we are nowhere near the internet bubble.  That was a much more severe situation in 1999 and 2000.  That was the biggest momentum wave that I’ve ever seen. 

It’s difficult to beat the indexes, given the momentum for the artificial-intelligence-related tech stocks.  In some ways, that has taken all the oxygen out of the room, although they are delivering the bacon.  Earnings are coming through, and their valuations are nowhere near the stratospheric valuations that we saw 20 to 25 years ago.

~ Jeremy Siegel, "Tech is 'Nowhere Near' the Dot-Com Bubble," Barron's, July 29, 2024

Paul Schatz: Bull market climbing a wall of worry, on the verge of an "amazing glorious run"

In my 25 year career I've never seen a bull market more disavowed, more hated than this one.  People rationalize why the Dow should not be close to 17,000.  And until the masses stop worrying about why the Dow should be at any given point... this is how a bull market climbs a wall of worry.  Until the average person stops saying "it shouldn't be" and says "it should be," the bull market's gonna live on, much like happened in 2000 where the last couple of years everyone said "it shouldn't be here, it shouldn't be here."  And the final run up into the 2000 peak was this glorious run, albeit in very few sectors.  I don't think we're there yet.  I think before this bull market ends, you're gonna have an amazing glorious run in a narrow group of stocks and sectors and that's going to be the final straw that breaks the camel's back.

Paul Schatz, president, Heritage Capital, interview on Yahoo Finance, August 14, 2014

Mark Hulbert on bullish parallels to 1930s stock market

I admit that I’m not an expert in the analogy-drawing department, but that rally that began in late 1929 does not appear to be very analogous.

Another rally that is perhaps more comparable is the one that began in July 1932. It lasted nearly five years, and during it the Dow more than quadrupled.

The accompanying chart superimposes on that mid-1930s rally the Dow’s progress from the March 9, 2009, low until now. Within the acceptable tolerances of analogy-drawing, I’d say the market over the last two and one-half years is not that far off.

And, if this is the script the market is indeed playing out, a huge rally is in store over the next couple of years.

Is this analogy-drawing little more than shameless data mining? Probably not. I engage in it for this column simply to counter those who, equally shamelessly, try drawing their own analogies to the 1930s in order to reach bearish conclusions.

From a contrarian perspective, however, the analogies to that decade that the bears love to draw do have significance. It indicates just how robust is the wall of worry that advisers choose to draw an analogy to the very worst of the 1930s — when they just as easily could do so in another way and reach a quite bullish conclusion.

And, as we all know, bull markets like to climb a wall of worry.

~ Mark Hulbert, "Is stock market replaying decade of the 1930s?," MarketWatch.com, September 23, 2011