Nasdaq soars past 5,000 for first time since dot-com bubble – a bubble burst near?

Where were you 15 years ago? It seemed like it was only yesterday that Bill Clinton was president, “Survivor” was the most popular show on television, Napster was the king of digital music and the prevalence of “whassup?!” became quite nauseating to the general public after a while.

Why is this so important to outline? Well, the Nasdaq surpassed the 5,000 threshold for the first time in exactly 15 years. In fact, the last time the Nasdaq reached this level was during the dot-com bubble, which meant that if you had investments with a “.com” at the end you were in significant trouble.

The index eventually crashed by 80 percent to a little more than 1,100.

“The Nasdaq wouldn’t be here if not for quantitative easing. It wouldn’t be here without zero percent interest rates. It wouldn’t be here without unprecedented stock buybacks fueled by cheap money,” Peter Schiff, CEO of Euro Pacific Capital, told CNBC. “You have all these artificial props which have lifted up the market and there’s no way to sustain the market without those props.”

Many analysts are defending this high by arguing that the Nasdaq is a lot more diversified than what it was in the year 2000 – it’s a new era of things and there is no bubble, say many of the so-called brilliant financial minds of the business news networks worldwide.

Indeed, today’s Nasdaq is comprised of biotech, healthcare, tech and social media, while 15 years ago it is was predominantly tech-focused. But that doesn’t mean there isn’t a bubble on the verge of popping.

Either way, the Federal Reserve’s money printing and artificially record-low interest rates have very much contributed to these highs, much like the money pumping schemes perpetrated by the United States central bank have permeated throughout the overall economy.

“There’s never a bubble where it isn’t different this time. That’s how bubbles work and that’s the one thing they all have in common,” Schiff added. “Tech is not as overvalued relative to the rest of the market as it was in 2000, but that doesn’t mean it’s not a bubble.”

What a majority financial experts are neglecting to mention is the fact that most of the IPOs today are unprofitable (SEE: Dot-Com Bubble Era Returns: 71% of IPO companies were unprofitable in 2014). Right now, 71 percent of IPOs are unprofitable, compared to 80 percent at the height of the dot-com bubble. Also, startups received $47 billion in funding last year, which is officially higher than the dot-com bubble.

At the time of this writing, the Nasdaq is trading at just under 5,000 at 4,985.

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