Happy Anniversary, NASDAQ

Posted Mar 9th 2008 11:10AM by Aaron Katsman
Filed under: Google (GOOG), Apple Inc (AAPL), Research in Motion (RIMM), Technology, NASDAQ

Monday marks the 8th anniversary of the NASDAQ reaching its' all time high. I remember the day quite clearly as it was a Friday and I got married on that Sunday. From March 10th 2000 to early Oct. 2002, the NASDAQ dropped about 78%, even with a bit of a comeback over the last five years, the index is still sitting over 55% under the all time high.

In fact since the recent high at the end of October, the index has shed more than 22%. What does all this mean? While we may not see a return to all-time NASDAQ highs for another decade, the index has again gotten very cheap. It could be that the index is setting up for a move to the upside. After all, this past Friday, the NASDAQ easily outperformed the DOW, and I think we are going to start seeing a rotation into technology names.

Tech earnings haven't been to bad. All the pundits will say that with a recession, tech spending will get cut. Go into your nearest Apple (NASDAQ: AAPL) store and there are no signs of a recession. Check out the earnings for Research in Motion (NASDAQ: RIMM), things look okay. Heck, Google (NASDAQ: GOOG) is starting to look interesting as a value stock.

It may not happen tomorrow, but for long-term investors, technology maybe a place to think about investing.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/9/08.

Tags: AAPL, Apple Computer, GOOG, Google, NASDAQ, Recession, Research in Motion, RIM, RIMM

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Reader Comments (Page 1 of 1)

3-09-2008 @ 12:46PM

Mavericks said...

A big reason why the NASDAQ got to 5000 and why it won't for a long time is that bid/ask spreads on NASDAQ stocks back in the mid 90's to early 00's were sometimes $1 or more, even for very liquid names. As a broker, I remember seeing huge spreads even in the $2-3 range and then marking up trades another $.50-.75/share!! With decimalization, spreads have dropped to pennies.