Friday, July 31, 2009

Tech Stock Bubble ... Of the 1920s

"A prime reason for expecting future earnings to be greater
was that we in America were applying science and invention
to industry as we had we never applied them before"
~ Irving Fisher, c 1920s

It wldnt be hard to agree with him.
Imagine you were living in a American household and you
had all these new and wonderful things pouring into the market
- stuff like cars, radios, cosmetics - etc. The future seemed so wonderful.

The tech stock of then was RCA - rising by 939% fr 1925 to 1929.
P/E ratio at its peak was 73.

What a wonderful world. It was like the 1990s all over again.

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