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We Have Very Little To Whine About

I was wandering through stock chart land and decided to compare Art Technology Group against the Nasdaq since its IPO in 1999 as I hadn’t checked in on that company since 2001 or so.  I noticed that the Nasdaq was flat since the ATG IPO, and that ARTG under-performed the Nasdaq but is still alive and kicking with a ~$500 million market cap.  But it got me wondering – if the Nasdaq is flat since 1999, the fantasy land of tech share prices, then maybe we shouldn’t be wringing our hands about the capital markets.  To be fair, the real peak in the Nasdaq was a spike in early 2000 to 5400.  But I looked back further, and a mere 20 years ago we were at 416!  A 5x since then – nice!  So I decided to rewrite history and remove the tech bubble.  Just wipe that aberration out and pretend the Nasdaq rose steadily from 1995-2000.  The bottom chart shows what that would look like…

(Actual Nasdaq)

(Nasdaq with no tech bubble.  Great appreciation!)

Now, chartists will argue this should be on a log scale, and if it was, then it would look worse.  OK, but I like linear better – it is more intuitive for me.  In either case, what can we conclude from this?  Bubbles are bad?  Sure.  They are disruptive for a whole host of reasons.  But that’s not the main point of this post.  As the page turns on another decade, I need to keep things in perspective.  In Jan 1985 the Nasdaq was 280.  Today it is 2300+.  So the equity capital markets are pretty darn good!