Nasdaq Composite Index exceeds 5000 points for the first time in 15 years

    The NASDAQ Composite Index consists of stocks and other financial instruments of more than three hundred companies trading on the NASDAQ stock exchange, and has been calculated since 1971. It reached its peak at 5048.62 points on March 10, 2000 during the era of the “dotcom bubble”, after which it crashed by 78%. Since 2003, it began to grow, and on Monday, March 2, 2015, it reached 5008.1 points, slightly not reaching the previous record. By the end of the week he dropped to 4927.37 .

    What is it - the revival of high technology or another bubble?

    The NASDAQ Composite Index was growing rapidly in the late 1990s amid investors' craze for buying shares in technology companies, the prices of which were based on views and clicks on websites. In 2000, of the hundreds of the largest companies included in the index, sixty-eight had net profit. Today, 90 of the hundreds of top companies have profits. After peaking at 5048.62 in March 2000, the index fell to 1114.11 points on October 9, 2002. Shares of Cisco, Intel and Microsoft fell by 50%, and many companies lost all or part of the value. The fashion for investment among private individuals has gone: in 1995-2000, the Americans invested $ 1.05 trillion in mutual funds, and over the next 14 years - $ 394 billion.

    Nevertheless, there is a surge in investment in startups: private and corporate investors invested $ 47.3 billion in 3,600 young companies in 2014, including several stages of financing exceeding $ 500 million. During the bubble, startups received $ 36.2 billion.

    The question arises before investors: is this another “bubble” or a natural growth of the high-tech market?

    Zack Weisfield, CEO of Microsoft Ventures Global Acceletators, after a business trip to China, appreciated the market for high-tech companies in this country. Chinese startups need large amounts of investment, because they do not have developed infrastructure of the United States. In 2014, 107 venture deals worth $ 4.66 billion were concluded in the country, and the number of mergers and acquisitions in the high-tech sector was 851 in the amount of $ 47.5 billion. Weisfield is convinced that this is a “mania to open a business,” but not a bubble.

    Commenting on the growth of the NASDAQ Composite, Richard Silla of Stern School of Business at New York University talks about the lack of insanity on the part of investors that occurred in the late 1990s. Investors have become more discreet and are looking at payback. Top companies in the index in most cases make a profit, not clicks on the site. Market drivers were large investors, not private speculators. Dividend Paymentsin 2014 amounted to $ 1.167 trillion - this amount was received by 1200 of the world's largest companies, including high-tech Apple and Microsoft.

    Larry Elton, an independent business consultant, offers two scenarios. The market will continue to grow thanks to venture capitalists if demand for new applications and technologies grows. Or a new influx of private capital is a sign of another bubble. Which one is true? Only time will judge.

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