The ringing in that marked the beginning of the 21st century didn't bring the apocalyptic catastrophe some had feared, but it soon would bring the long awaited tech crash that only the hopeless daydreamers couldn't see forthcoming. By March of that year, the Nasdaq topped out at a valuation of over 5,000 points - or a 500% increase from 1996 levels. Buoyed by everything except actual fundamentals and facts, the retreat to 1996 levels by the end of 2002 was a foregone conclusion.
Still, a lot has changed in the last decade. If the Nasdaq could cross 5,000 without merit back then, thinking it can't increase now from the 3,000 point level would be rather short-sighted. For instance, try getting by in life today without a computer. It might be possible, but something tells me it wouldn't be sensible. However, it's not just about desktop computers these days or even laptops. Technology has literally embraced our every waking hour and further expansion can never be ruled out.
Imagine walking to a college class one day and taking out your book by turning on your E-reader. Imagine walking out of Disney World and flipping on your GPS device to find the exact location of your car. Imagine canceling your television service and turning exclusively to the internet for visual entertainment.
For some, the above scenarios have already played out, but for many they haven't even been considered. It takes awhile for a certain technology to become commonplace. Some are reluctant towards change while others cringe at the hours it may take to truly understand a new device and all its functions. Until, of course, they are left with no choice.
Nothing could probably illustrate such a conclusion more than the upcoming tax season. For many, the pencil and paper (if such primitive things still exist in your house) aren't coming out and mass hoards probably won't be knocking down the doors to the local H&R Block (NYSE:HRB) office like they once did. Instead, doing taxes online has become a convenient and, most importantly, accepted alternative. Gone are the days where the thought of typing in a social security number on some electronic device was viewed as almost blatantly handing your identity to some thief to steal.
Why has this change of mindset occurred? Mostly because people's hands were forced. They were made to accept the alternative-the technological alternative. Even doing the simplest thing like going down to the local library or post office and picking up the required tax forms to do by hand is no longer an option for some.
The point here is that the Nasdaq has become more than just a symbol of the future. The index now marks the present. Whether you wait outside for hours for some store to open to be the first one to get your hands on a new device by Apple (NASDAQ:AAPL) or you sit grudgingly at the thought of succumbing to a new innovation until you've been given no alternative, the technology companies win. So too will the index.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.