Ma Guangyuan: The current market really resembles the period right before the 1999 bubble burst

Golden Fortune Report, May 12 | Economist Ma Guangyuan pointed out in a post that today's market is indeed very much like the period right before the 1999 bubble burst. Why is the market compared to 1999? Because, as everyone knows, 1999 was the peak of the internet frenzy at the time. The Nasdaq Index rose by about 400% from 1995 to 2000, but increased by approximately 150% in just the short span of 18 months between 1999 and 2000. Cisco, Yahoo, AOL, and Amazon all had price-to-earnings ratios commonly between 100–300, a large number of purely conceptual companies went public, and their stock prices surged by 300%–1000% on listing, with no revenue and no profit. After the internet bubble burst that year, the decline in the Nasdaq Index was truly terrifying. In March 2000, after the Nasdaq hit a historical peak of 5048.62 points, it plummeted all the way to 1114.11 points in October 2002, with an accumulated drop as high as 78%. The total market capitalization evaporated by more than 5 trillion US dollars. So, to this day, whenever everyone talks about the narrative of AI, whenever everyone discusses AI, if you look back, the stories and narratives being told are almost exactly the same as today. The market suffered a devastating blow; thus, when nowadays everyone is talking about the AI narrative, discussing AI, all valuations are about AI, all stories are about AI, everyone will recall the bursting of the internet bubble back then.