August Charts of Interest: Valuations at Dot-Com Bubble Levels

MG from Puzzlement posted 11 months ago:

Good evening, I'm puzzled by this seemingly contradictory statement in this article: '...both the S&P 500’s price-to-book-value (P/B) and price-earnings (P/E) ratios are hovering around levels not seen since the dot-com bubble. One big difference between now and the late 1990s is that technology and technology-adjacent companies are profitable—though many currently have frothy valuations.' There is zero correlation to be made, imho, between, say, NVDA today & the multiple companies such as Kozmo.com & Pets.com that imploded during the dot-com mess during the late-90's / early aughts. NVDA produces products that are in massive demand, products that are already installed with acres of data centers being built to take on even more NVDA product. The demand for AI is proven & that demand isn't slacking nor will it slack. NVDA makes the hugely profitable items that sustain this process. The writer notes the 'big difference' between now & 25 yrs ago, yet in the next breath states that the company valuations are 'frothy.' That doesn't make sense because there's no correlation. Secondly, this article is, with respect, a regurgitation of data & blithe talking points that have no bearing on a trader's outlook nor even a long-haul investor outlook. So, again with respect, I find these types of articles to be of zero value to an investor, or trader, and I look for better quality information that has some value / use to it. I just signed up for the AAII offerings. I hope they improve. all the best,

Barry from TX posted 11 months ago:

Charles, are you channeling Joe Btfsplk? #1 Your “Top 5 worries” have been with us for a while. #2 Look at the AAII Sentiment data in this COI. Almost 70% of AAII investors have been stuck in “Neutral” or “Bearish” for almost a full year. Nothing is changing. So, what’s the “news” in all this bad news? In 1959 – about when today’s retirees were born -- the Kingston Trio sang “The Merry Minuet,” and nothing has changed since then. Compare your list to these thoughts: “They're rioting in Africa. They're starving in Spain. There's hurricanes in Florida. And Texas needs rain. // The whole world is festering. With unhappy souls. The French hate the Germans. The Germans hate the Poles. Italians hate Yugoslavs. South Africans hate the Dutch. And I don't like anybody very much. // But we shall be thankful and tranquil and proud. For man's been endowed with a mushroom-shaped cloud. And we know for certain that some lovely day. Someone will set the spark off. And we will all be blown away.” #3 If we substitute today’s problems for the ones from 66 years ago, the meter gets bumpy, but the message is unchanged. My “Greatest Generation” era mother would have said, “Get over your whiny self. My generation lived through the Depression, defeated Hitler, rode out the H-Bomb, and all we had was a radio. Now go outside and play nice. I’ll call you for supper”

Barry from TX posted 11 months ago:

As Pogo said, "We have met the enemy and it is us." [Is this Al Capp Day?] I offer his self-portrait of AAIIers from the The Latest AAII Investor Sentiment Survey Analysis from 8/21/2025 that characterizes the “flow” of investor sentiment as: [Source: AAII] “AII Investor Sentiment enters its 7th week in Neutral territory at the 37th percentile, yet the Sentiment Compression Index—the range between the highest and lowest sentiment readings—reveals a noteworthy 20.4% spread that signals balanced uncertainty rather than polarized conviction. This compression level sits at the 57th percentile historically, indicating moderate dispersion without the extreme clustering that typically precedes volatile sentiment swings. The data reveals an intriguing behavioral pattern: neutral sentiment at 24.4% ranks in just the 23rd percentile historically, suggesting individual investors are displaying higher conviction despite the balanced headline numbers. This mirrors only a handful of instances where sentiment appeared balanced yet reflected underlying decisiveness rather than genuine indecision. Historical performance analysis shows similar Neutral periods averaging +3.4% returns during the sentiment stretch itself, with a remarkable 100% win rate across 20 comparable instances. However, forward returns become more nuanced—4-week prospects show mixed results with only 50% positive outcomes averaging +0.5%, while 13-week returns improve dramatically to +2.7% with 78% win rates. Individual investors should recognize this setup's asymmetric character: near-term volatility risk exists (worst 4-week outcome was -3.1%), but medium-term prospects favor patience, with 13-week returns ranging from -4.1% to +11.9%. The current configuration suggests neither euphoria nor despair—a historically constructive foundation for patient capital deployment.” LIke Mom said above, “Get over your whiny self. My generation lived through the Depression, defeated Hitler, rode out the H-Bomb, and all we had was a radio. Now go outside and play nice. I’ll call you for supper.”

Rob from NC posted 11 months ago:

The S&P500 chart presents worthwhile information. It's always good to see your current position in a historical context. It might not be the optimal time to buy that S&P500 index ETF. Nevertheless, my response to this is the same as always. I'm going to sit on my hands and do nothing.

Barry from TX posted 11 months ago:

The lower chart in COI #1 (labeled as Chart 7) pretty much tracks SPX performance over the same period as the AAII Investor Sentiment surveys since 1987. #1 The point here seems to be to compare SPX PEAKS (Apr '99, Aug '23, and 'Aug 25), TROUGHS (Oct '90, Oct '08, and Aug '11), and MARKET CYCLES over the periods that connect these points to "see" some connection between "then" and "now" and maybe the "future." #2 The chart would be more instructive/intuitive if it overlaid the recurring ECONOMIC CYCLES through its 4 phases -- expansion/recovery, peak (high), contraction/recession, and trough (low). #3 This would have been a good way to demonstrate how the 12 indicators in the new AAII INVESTOR Sentiment (4 indicators) and MARKET Sentiment (8 indicators-- breadth (3), volatility (1), trends (1), and volume (2) provide information connecting (A) investor sentiment data to (B) market performance data to (C) investor outcomes, which is THE goal of every investor. #4 If the goal in comparing the two charts was to highlight any “similarities” in the timing of the "peaks" and "troughs" recorded in the charts, then overlaying the approximate phases of the economic cycles that the graph captures would have been a good start at explaining how (A) investor sentiment formed through observartions and events that “relate” to (B) SPX market sentiment performance data (the events marked in the chart) and (C) investing outcomes. #5 Columbus crossed the Atlantic twice and regaled the Known World about the treasures ("outcomes)" in the Unknown World, but ALSO recorded and reported how the seasonality (cycles) of the winds (air speed), waves (surface speed), currents (momentum), and temperatures (pressure) propelled him to and from his “discovery.” Finding "treasure" and explaining how to get there it is one thing; explaining how to survive in the a strange "new world" is another. #6 Note for history buffs: In 1492, the Spanish throne was distracted by their victory of completing "La Reconquista," Christianity's 700-year "holy war" against Islam, when the Muslim Kingdom of Granada surrendered.