Is there a 2001 dot com feel going on right now?

[El Presidente]

Is there a 2001 dot com feel going on right now?

I had a long discussion with a mentor over the weekend on this subject. Fascinating. 

It is never truly possible to overlap two economic time periods as 100% if the fundamentals don't stack.

I think many will attest that there is an eerie feeling out there. 

• Real estate booming
• luxury goods prices booming (just look at cigars). 
• Inflation gathering pace. 
• Labour shortages. 
• Capital everywhere looking for a home. 
• Stock markets not that far from record highs. 

What's your crystal ball showing?  Let us know and have a crack at the poll. 

 

[HarveyBoulevard]

I would have voted for somewhere between a mild correction and it all comes crashing down…so I picked the former because I don’t think we quite get to the latter.

The music isn’t going to stop but it is certainly going to get softer and slower. 

[joeypots]

The first three are possible. The financial media makes too much money to stop prognosticating about the next six months to stop trying to predict the future. The fourth, as the wise man said, "Never bet on the end of the world. It only happens once and the odds are against it." 

[Kitchen]

I think saying a 2001 dot com burst is a little too kind.  

I think we will be in recession by the end of the year, and I think it is going to rival the 2008 crisis.  

[Digi]

When super and hyper cars are increasing in value, you something is off 😅  Houston down a Royalty Exotics in Vegas has made a mint over the last two years buying and selling even marginally interesting super cars.  This would boggle my mind except I flipped 4 boxes of BBF Reservas at over double the price in less than a year.

The west coast of the USA and Seattle in particular have been well insulated from the last couple corrections and recessions.  Seattle is a city that makes a lot of global products, both physical and digital.  Even during the 2008 debacle, folks were still moving to this area and housing didn't take a step backward.  If the market takes a notable shit, you'll see folks in this area pull back on discretionary spending as stock allotments will sit and marinate.  Still though, salaries are very solid and rising in tech so even with a significant market hit, households in Seattle will still have plenty of liquid resources.

[Puros Y Vino]

Not an economist.  But my gut tells me there is a lot of pent up demand through the duration (and continuation it seems) of the Pandemic.  While the Amazons of the world did well, there was a severe shortage of many products worldwide.  So, as raw material supply and logistics ramp up, customer demands will be fulfilled.  This will somewhat be offset by the losses of small business.  Who have either disappeared or have been decimated the past 2 years. One thing is for sure, the rich definitely got richer.  The big winners were the large, corporations.  SMB's were left to twist in the wind.  Housing in Toronto and Canada overall continue to boom.  But it's mostly foreign buyers parking their cash here and shutting out the locals by hiking prices up.   

[Trapper99]

I think everything is going to go great, till it doesn’t😂

A lot of evidence seems to point to tough times ahead, but also a lot of evidence supports this is a clown world and logic (financial) is out the window. 

Those in power will be fine, no matter what.

[tuff]

Agree there is an eerie feeling out there and my spidery senses are tingling. However, I don't think what has happened over last few years can be compared to other business cycles or events in our lifetimes. I think Puros Y Vino has some good points. I think governments, especially the USA has pumped so much money into the economy that if I were to guess what is coming, I would say a mild to moderate slowdown which is hopefully not a bad thing. This may allow the supply chain to somewhat recover and hopefully ease pricing and greed. Although I am a capitalist, I know I have become quite tired of the inflation, some of which I feel is profiteering looking at large corporations record profits, so maybe a slowdown is not a bad thing.        

[SMELTZ]

I always plan for the worst but hope for the best.  Real Estate market will be good for the next 3 to 5 years according to statistics and my own experience.  With that said, I am buying another property in Dallas as the demand is ridiculous and bidding wars are now a constant.  Not much will change in the next year in MHO, been through this before and too much money in people's pockets now and for years to come. IF you continue to fear the future you will not get anything accomplished. Money is made everyday and it's out there all over place, now go get it.  

[benfica_77]

I expect the market correction at the moderate level....here's some reasons why at the macro-level

- US Fed and other countries have either began or indicated that they will stop buying debt which inherently will increase interest rates which is desperately needed. There is absolutely no incentive for the average person to save/use a savings account. 

- The S and P 500 price to earning or PE ration should be hovering around 15-17....as of today it's 25! no bueno that means stock prices are inflated and will come down. 

- FAANG or whatever acronym you want to use for the big tech giants all those companies can't keep growing exponentially...they can't keep driving the stock market upwards. They will stagnate and new players will need to come in and take their spot at the top...it's cyclical and happens every decade or so. 

- Real Estate is horrific in many countries...New Zealand...Canada...US etc. government will begin making policy decisions to drive the cost down which could impact the economy as well but I think is needed.  

I expect moderate pain economically speaking over the next 3-5 years. 

Except if you're in Russia...you are mega-f'ed as of today you have began defaulting your loans and will take decades to recover from this. 

[ReturnFreeRisk]

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[LordAnubis]

Ive got my super (retirment fund in australia) parked in full cash expecting a crash. It might be 6 months from now but i think a down trend is the only way forward. 

My problem is how i manage the current plans for building a new house... between builders here going bust, supply and labour shortages, the price of building at the moment and the price of renting while my house gets built, I might really be better off building at another time.

[Rhinoww]

22 minutes ago, LordAnubis said:

Ive got my super (retirment fund in australia) parked in full cash expecting a crash. It might be 6 months from now but i think a down trend is the only way forward. 

My problem is how i manage the current plans for building a new house... between builders here going bust, supply and labour shortages, the price of building at the moment and the price of renting while my house gets built, I might really be better off building at another time.

We built a covered porch last spring/summer. I waited on a skirt around the bottom and to start some Bathroom renovations u til prices come down. I’m still waiting and I’m not getting any younger. Prices here for wood and for fixtures keep going up when you can get them. 
as for a bubble, they say money needs to go somewhere. I pulled out a chunk of cash before the pandemic got serious. It’s still in cash. Those investments I sold are up like 20-30%. I sleep well knowing I have a hedge but also think what I could have done w that extra revenue from those investments that are in low interest cash accounts - like finished a few renovation projects 😂
 

[mprach024]

There’s way too much money and cash on hand for a crash.  That’s the huge difference between now and 2008 as capital reserves had been slowly drying up over a 4-5 year spell and then paired with horrible investments being made by the average Joe.  If we see a crash it’ll be 3-4 years from now.  Clearly a correction is necessary in all things, not just luxury goods, basic goods and value of money has taken a 15% hit across the board.  To me this feels like 2005ish when some previous huge gains started stagnating.

[Huckleberry]

I'm in commercial construction, the only thing that will contract prices abruptly will be when the material shortages actually go away.  Even projects priced just after Covid panic took hold in March of 2020 didn't experience any adjustment over the prior year.  Prices didn't go up over the summer of 2020 but they never fell below what they were in 2019 either.

The construction world is out of its mind so even if materials prices do arrest themselves there isn't enough laber force around to take advantage of the lower material costs, sub contractors were still be universally scarce.

[Dimmers]

Well cigar NFTs are now a thing apparently so yeah it’s all fine. 😂. 

[Ken Gargett]

it would have been interesting had you posed the question the week before the russian invasion. i think a very different feel at that stage. 

[PuroDiario]

M&A pipeline has slowed down. Most M&A ongoing and financing (equity) rounds being announced now is backlog from last year. Bond market has slowed down too, both in secured and high yield debt. Demand driven inflation now with a supply shock on top…all indicates a reversal…but…until the party stops you gotta keep dancing and it’s unclear who’s going to unplug the music, lots of political capital relinquished on it. I’m bearish 2023 generally but as most…balls deep. Wall Street 2023 I anticipate lay offs. We have been in a 10 year mega bull market. Any bozo was a good investor. Any charlatan a billion dollar entrepreneur. Old $10mm investment is now a $100mm…series A financing rounds are $30mm rounds, pre-IPO mega rounds are at all time highs and literally no covenants. The level of liquidity on the market is still insane and that capital needs to be deployed. 800k jpegs, 30x Revenue multiples, there are at least 30 multibillion dollar unproven economics companies in IPO Que with plans to see H2 2022 as an option (big banks pushing for IPO window then), solidity coders commanding 7 figures with 6month experience in failed concerns. Mortgage issuance down but real estate prices all time high and not slowing down yet. It’s a very confusing time tbh.

[BTWheezy]

36 minutes ago, PuroDiario said:

…but…until the party stops you gotta keep dancing and it’s unclear who’s going to unplug the music…It’s a very confusing time tbh.

Dude…🤷🏼‍♂️

[jfire]

There is more money being spent on vacations in the US right now then anytime in the last ten years. (If I had to guess) the major markets In the US are retracting due to inflation and supply issues. Currently I’ve been buying tech stocks like Nvidia on Thursday at 215 a share. I’ll take it to hold for 5 years all day. There is no crash coming in 2022 that I see. Realestate in the US has barely slowed. Will there be more corrections? There always is.

also my wife is a realestate agent in S burbs of Chicago. The money going into home offers is still 20% down and even full cash sometimes at 5-700k

edit:

until I see a box of D4s for 225 USD I’m good for the next 3 years.