Don't Get Too Comfortable: The Crash May Be Coming

Nov. 09, 2021 8:10 PM ETAAPL, AMD, AMZN, LCID, LCIDW, MSFT, NVDA, QQQ, SP500, TSLA265 Comments
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Victor Dergunov
Investing Group Leader

Summary

  • Tech stocks are surging left and right like it's 1999 all over again.
  • The S&P 500's cyclically adjusted P/E ratio was higher just once before now. Yes, you guessed it, leading up to the 2000 market top.
  • While technology is leading the charge, sky-high valuations seem to be widespread amongst multiple sectors.
  • A correction in ultra-high multiple names combined with multiple compression in more mature companies could cause a market meltdown soon.
  • Looking for a helping hand in the market? Members of The Financial Prophet get exclusive ideas and guidance to navigate any climate. Learn More »

Bear Market

DNY59/E+ via Getty Images

There is extensive froth in the stock market right now, and you don't have to go far or dig deep to see what I mean.

The S&P 500/SPX (SP500)

SPX

Source: StockCharts.com

The S&P 500 has

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This article was written by

Victor Dergunov profile picture
Victor Dergunov
50.43K Followers

Victor Dergunov is an independent investor and author with 20 years experience. He preaches diversification and shares investment ideas across all market sectors. Victor aims to help readers build portfolios that perform well in all economic conditions.

He runs the investing group The Financial Prophet where he covers all market sectors and shares strategies for well-diversified investing. Features include: the All-Weather portfolio, trade alerts, technical analysis, daily reports with his latest updates, covered call strategies, and direct access in chat. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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