As far as I am concerned, technology stocks are definitely in an overvaluation bubble. Technology stocks are circa 60 % overvalued measured by the current level of the Nasdaq Composite.
Some analysts claim that you can only spot a financial bubble after it bursts. I disagree. Apart from the largest five technology stocks Apple, Microsoft, Amazon, Alphabet and Facebook most other technology stocks do not make money, that is they are not profitable.
And businesses are made for profit. Yes, the argument goes you can buy technology stocks at high valuations and prices and sell them at even higher valuations and stocks prices and make large sums of money. However, sooner or later many people will buy at the top and suffer losses of something like 50-70 % magnitude.
Another argument goes that technology companies can grow into profitability. Yes, that worked only partially for Amazon, because the company still has a very high Price/Earnings ratio. However, technology stocks are notoriously volatile. Several years ago after earnings Facebook's stock price fell more than 20 % which was the largest wealth loss for a single listed company in history.
I personally think that 6 months to one year around the ceasing of money creation by central banks, technology stocks measured mainly by the Nasdaq Composite will crash by more than 50 %. The interesting thing is whether central banks will stop printing money at all. I f they do not stop, the global economy will resemble Japan where the Government Debt/GDP ratio is more than 240 % and the Bank of Japan is simply compelled to print money to help finance the government. Otherwise the economy of Japan can simply implode.
I personally think capitalism has to prevail. Centra bankers have to show courage and stop money creation. Yes, many weak an unprofitable businesses will go bankrupt and many jobs will be lost in the short run. But capitalism's creative destruction will prevail and later we will have a stronger, more resilient and flexible economy.
My hope is with the USA and the Federal Reserve. Yes, if the Federal Reserve withdraws the monetary support it currently provides, technology stocks and the general stock market will suffer a correction of likely more than 30 % measured by the Dow Jones Industrial Average, The Standard and Poor's 500 and the Nasdaq Composite indices.
Afterwards, however, the next Alphabet Inc, Google search engine creator, Amazon Inc or Facebook Inc will appear and increase humanity's well being.
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