Is it more like the dot-com bubble or the financial crisis?
Joanna Glasner of Crunchbase News compares the two economic downturns in this century and offers thoughts on what might happen.
Is the current economic climate more like the financial crisis of 2008 and 2009 or the dot-com bubble of 2000 and 2001?
Joanna Glasner writes in this recent Crunchbase News article that “we see elements of history repeating. If we look at the past few quarters, much of what we’ve seen appears more reminiscent of the dot-com implosion than the financial crisis.”
The article has an intriguing headline: “Downturns Recover in Years, Popped Bubbles Take Decades.” To illustrate the difference, Glasner cites the fact that, during the financial crisis, technology stocks bottomed in early 2009, but the tech-focused Nasdaq 100 index was back at its highest point in five years just two years later. That compares with the fact that it took the Nasdaq 15 years to reach the level it was when it peaked in March 2000, just ahead of the dot-com implosion.
Her conclusion: “History won’t repeat itself exactly. But when it comes to the long list of relatively solid companies in SaaS (Software-as-a-Service) and other sectors that saw valuations skyrocket to unsustainable levels, it wouldn’t be surprising if recovery was a long, slow slog.”