Nasdaq-to-S&P 500 Ratio

The Nasdaq has been on fire lately. The ratio of the Nasdaq to the S&P 500 is currently hovering right around 2.0. Two weeks ago, the ratio crossed above 2.0 for the first time since early 2001.
Don’t worry that we’re headed back to the Nasdaq bubble days just yet. We still have a long way to go to match the earlier peak.
Consider these numbers: On March 10, 2000, the ratio hit 3.62. To match that today, either the Nasdaq would have be around 3570, or the S&P 500 would have to be at 548 — a 44% drop from here.
In other words, what the hell were people thinking in 2000?

Posted by on July 30th, 2009 at 4:10 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.