This Market Isn't 'Dot-Com Crazy' (Yet)

Dear subscriber,

The mind plays tricks on us. In some cases... it's to our benefit.

Oftentimes, when we look back on extreme circumstances or events, the emotion of the situation is muted.

We recall times of fear, stress, or pain. And we remember them as being unpleasant... but we never feel the emotion as strongly as we did the first time.

In many cases, this is a good thing. Many of us would never choose to fall in love again or deliver a second child without a bit of pain-dampening amnesia.

The same can be said when it comes to your money...

Because, like it or not, your financial well-being is very much tied to your emotional state.

Fear, for instance, is a deep, biological response. The risk of losing money triggers the very same fear response in people today that struck our prehistoric ancestors when they saw a lion on the plains.

Everyone remembers that the global financial crisis in 2008 was a bad time for markets. Things were scary.

But at the time, they weren't scary... They were terrifying.

The global economy was close to a complete and total collapse. And if we remembered it as clearly as if it were yesterday, we may never put our money in the market again.

These days, emotions are on the upside...

The market is in full-on bull mode. The S&P 500 Index is up 15% year to date and continues to hit new high after new high. Meanwhile, the tech-heavy Nasdaq Composite Index is up 20%.

And companies are soaring double digits in a single trading session...

Advanced Micro Devices (AMD) jumped 24% on Monday after it announced a partnership with OpenAI. That's good for an extra $78 billion in market value.

Plus, Elon Musk's xAI just collected another $20 billion from investors (link to story below) despite the fact that it's burning $1 billion per month.

This market feels crazy... but it isn't crazy just yet.

Our memories have also softened the wild times of the dot-com bubble.

Yes, you remember that the Internet boom was crazy. But it was dramatically more insane than you likely recall.

As Stansberry Research senior analyst Alan Gula explained in a recent issue of Stock Market Trends, the dot-com bubble was wild.

For instance, we're seeing an uptick in initial public offerings ("IPOs") these days. So far in 2025, there have been about 234 IPOs in the U.S. That's up from 182 last year and 140 the year before. And they've raised nearly $49 billion, more than double the amount from 2023.

Some have soared upon going public. As of this writing, Circle Internet Group (CIG) is up 380%, while CoreWeave (CRWV) is up 222%.

But that's nothing compared with what we saw during the Internet bubble...

In 1999, there were more than 470 IPOs of significant size. And the average one-day pop was 71%. That includes the debut of computer server and workstation company VA Linux Systems, which rose 700% on its first trading day.

And yes, Nvidia (NVDA), Palantir Technologies (PLTR), and others have posted huge returns this year... but the gains during the Internet bubble were multiples larger.

In 1999, shares of Qualcomm (QCOM) rocketed 2,600%.

Overall, from 1995 through March 2000, the Nasdaq 100 Index soared 1,080%. The modern bull run puts the Nasdaq 100 only about 276% higher than its March 2020 low.

And yes, you may have seen that some metrics like the price-to-sales ratio have hit all-time highs. But price-to-sales ratios don't include profits. And businesses are drastically more profitable today.

The forward price-to-earnings ratio of the S&P 500 is currently around 23 times. That's high, but not yet at the dot-com-bubble peak of 26.

In many ways, today's frenzy feels like the dot-com bubble... but feelings are unreliable.

Yes, there are a lot of heady IPOs these days. But if you ask tech journalist Kara Swisher, who was at the center of the dot-com bubble, reporting from San Francisco and rubbing elbows with Jeff Bezos, Bill Gates, and Marc Andreessen... we've yet to reach the 2000s level of ridiculousness.

As she recounts in her bestseller Burn Book: A Tech Love Story, "A well-known investment banker called to pitch me a story about a company whose share price was going to hit the sky after going public and was 'pre-revenue.'"

A soaring IPO... having not made a single sale. As Swisher puts it, "I could tell that the math was not mathing."

This market is stretched... and frothy. But in most cases, the math is still mathing.

We may undergo a correction or crash. That's not impossible.

But if your prediction is based on this being as crazy as the dot-com bubble, we simply aren't there yet. Our memories are imperfect, but a review of the facts shows that investors can go truly bonkers before they gather their senses.

To hear more about the dot-com bubble and its parallels to today, check out today's This Week on Wall Street video, where I sit down with Stansberry's Alan Gula.

You can watch the entire episode on our YouTube page by clicking the image below. Be sure to like and subscribe to get more of our videos.

What Our Experts Are Reading and Sharing... 

• Last week, I pointed out how the AI ecosystem has gotten "circular" with its funding. The New York Times has caught up, quoting short seller Jim Chanos who said, "Don't you think it's a bit odd that when the narrative is 'demand for compute is infinite,' the sellers keep subsidizing the buyers?" Now, Nvidia is investing in Elon Musk's xAI as part of a $20 billion funding round.

• Gold has officially topped $4,000 per ounce, which makes it the best year for the metal since 1979. Of course, we've been telling you about this bull run in gold all year.

• Every quarter, Meb Faber at Cambria Investment Management compiles the valuations of all the global stock markets. The cheapest right now is Colombia. The most expensive in the world? The United States.

New Research in The Stansberry Investor Suite...

The N.E.W. System is up and running...

We debuted Stansberry's new, AI-driven portfolio at the start of September and included it in the Investor Suite. (If you missed the inaugural issue, you can access it here.)

In this month's issue, Whitney Tilson, Alan Gula, and Tyler Jarman start by discussing the things a modern quantitative investor should know... like how to "surrender to the machines."

As they explain, with the help of AI-driven tools and systems, quant investing is more valuable than ever.

Next, they take a look at The N.E.W. System's inaugural portfolio and its performance over the past month. (One stock is already up roughly 10% since launch.)

As we've covered, the portfolio's AI algorithm tells them exactly which 20 stocks to buy (or sell) for careful diversification.

But don't worry – the team still takes the time to explain what the computer likely sees in these stocks' fundamentals... and why the underlying businesses make for great investments today.

Stansberry Investor Suite subscribers can read the entire report here.

If you don't already subscribe to The Stansberry Investor Suite – and want to learn more about our special package of research – click here.

Until next week,

Matt Weinschenk
Publisher and Director of Research

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