About this blog

Whether we like it or not, economics, and therefore money, is at the center of our lives. Much of what is seen and heard through the news is grim, at best. What does it all mean? How could this happen to the Greatest Country on earth? Weren't we taught that the "free market" could do no wrong, and that it could right itself? At times it appears that policy makers and citizens alike only talk about the economy when the apparent armageddon is near (hence the "contempt" in Econ-Tempt). While I am by no means a professional economist, hopefully I can help clear the air and encourage continued discussion about the role of the government, the free market, risk allocation, and the average citizen in today's increasingly confusing economic climate. Thank you for your support, and enjoy!

Disclosure: I wrote this blog and all posts myself (unless otherwise notated with hyperlinks/sources). All opinions are solely my own and not representative of my employer. I am not receiving any compensation for these entries, and I have no business relationship with any company or entity mentioned in this blog unless otherwise notated in a specific post. Personal portfolio disclosures will be made in blog posts if relevant.

Wednesday, November 27, 2013

Tech Stock Bubble a la '99 - '00? Not according to Forward P/E

With the NASDAQ recently hitting 4000, a number not seen since the year 2000, the tech bubble hoopla is again center stage. However, as it was so eloquently put on CNBC, there is more to the story. Looking at the NASDAQ's forward P/E ratio, we are nowhere near the exorbitant and unjustifiable multiples we saw during the last bubble:


As you can see, even looking at the low end of the Forward P/E range in '99 and '00 and the high end of this year, we are significantly below undisputed trouble. However, as I have said before, we cannot use any one metric alone to judge this complex market. Be that as it may, at least we are not judging the viability of tech companies by "eyeballs" anymore...
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