Tags: Experts | Nasdaq | bubble | 2000

Experts: Nasdaq Isn't a Bubble

By    |   Thursday, 26 December 2013 06:57 AM

The Nasdaq Composite index is trading at its highest level since the dot-com bubble of 2000, leading some financial commentators to question whether another bubble is brewing.

Many experts say the answer is no. One reason for their bubble skepticism is that the Nasdaq is much more diversified now.

In 2000, technology companies accounted for 57 percent of the index, whereas now it's 42 percent.

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

"The Nasdaq has really grown up over the last decade. It's a lot more mature now," Kim Forrest, senior equity analyst at Fort Pitt Capital, told CNNMoney.

Consumer services now represent 22 percent of the index, up from 0.5 percent in 2000. And healthcare amounts to 14 percent of the index, up from 4 percent back then.

"The Nasdaq is definitely not nearly as lopsided as it used to be," Ryan Detrick, senior technical analyst Schaeffer's Investment Research, told CNNMoney. "Having more diversification gives the index a whole different feel and helps its safety factor."

Biotech companies Gilead Sciences, Celgene and Amgen are making their presence felt in the index. "Biotech companies are now making money, which wasn't so much the case a decade ago," Detrick said.

The Nasdaq closed at 4,155 Tuesday.

As for stocks overall, Henry Herrmann, CEO of money manager Waddell & Reed, told The Wall Street Journal that while they aren't cheap after this year's sharp rally, "more money will come into the stock market" next year, because "there is no alternative."

He said, "Bonds simply don't get you there."

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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The Nasdaq Composite index is trading at its highest level since the dot-com bubble of 2000, leading some financial commentators to question whether another bubble is brewing.
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Thursday, 26 December 2013 06:57 AM
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