Quants? Bubble on the Brink? The Fed? It's 1998 All Over Again
- Tech megacaps lost a third of their value in March - May 2000
- Just as in 1998, the rally was driven by technology companies
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Does the chaos embroiling equity markets have an obvious precedent that can guide investors on how it plays out?
While the Crash of ’87 and 2008 financial crisis have been name checked, a more relevant example may be 1998, the first test of the internet bubble. It was a period in the market that has some eerie parallels to today. Stocks were in the eighth year of a giant bull run that had relentlessly expanded valuations. The Federal Reserve had just begun a tightening cycle. And behind the scenes, sophisticated speculators were getting into trouble.