During the course of the day, I often end up in discussions on X, the old Twitter, with many individuals about the stock market, economics, and history. Many times it’s a combination of all three as disturbing patterns emerge in both individual stocks and indices that are alarming as almost every time very bad things followed.
As in pain, lots and lots of pain.
For example, this chart of Intel ($INTC) from its bull emergence in the late 1990’s until the .com crash:
The buildup as the internet frenzy began, then the speculative triple top, the reality hit as it wasn’t as ready for prime time as many thought it was.
Seem familiar?
Traditional telecom companies were caught up in the same frenzy. Just look at what happened to AT&T($T) during the same period, but not with as dramatic an outcome as Intel.
Of course it’s not just high tech where this happens. How could anyone forget the housing market sparked by Greenspan’s desire to create a bubble to offset the slow economy after the 2001 recession? Lennar($LEN) comes to mind:
Bubbles are bubbles and speculative bubbles eventually pop as the rot underneath the equities as the truth about their financials or economic conditions overtake the market’s ability to hide all the bodies.
In some cases, the equities never recover their full valuations as Citigroup ($C) has demonstrated:
What’s even more amazing is when a stock manages to repeat itself twice in one era. Radio Corporation of America, which these pages have highlighted before, crashed and burned as the Great Depression wiped out most of the spending power of the American consumer.
The stock remained flat into the 1960’s, recovered a bit with the color television revolution, then attempted to remake itself twice in the 1970’s eventually collapsing during the massive early 80’s recession until it was acquired for almost nothing by General Electric in 1986.
But what stock has repeated this feat that still trades today? Believe it or not the once high flying high tech company Intel again:
If this isn’t a bad omen or a sign that this company might be forced to sell to Qualcomm, I do not know what is.
Meanwhile, that leaves us historian geeks out looking hard to find out who could possibly be the next RCA or Intel even?
Csvidia anyone?
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