Nasdaq-to-S&P 500 Ratio

The Nasdaq has been on fire lately. The ratio of the Nasdaq to the S&P 500 is currently hovering right around 2.0. Two weeks ago, the ratio crossed above 2.0 for the first time since early 2001.
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Don’t worry that we’re headed back to the Nasdaq bubble days just yet. We still have a long way to go to match the earlier peak.
Consider these numbers: On March 10, 2000, the ratio hit 3.62. To match that today, either the Nasdaq would have be around 3570, or the S&P 500 would have to be at 548 — a 44% drop from here.
In other words, what the hell were people thinking in 2000?

Posted by on July 30th, 2009 at 4:10 pm


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