Ma Guangyuan: The Current Market Resembles the Pre-Bubble Burst of 1999

On May 12, economist Ma Guangyuan published an article stating that the current market indeed resembles the period just before the 1999 bubble burst. The reason for comparing it to the 1999 market is that 1999 marked the peak of the internet frenzy, with the Nasdaq index rising approximately 400% from 1995 to 2000, and a staggering 150% increase in just 18 months from 1999 to 2000. Companies like Cisco, Yahoo, AOL, and Amazon had price-to-earnings ratios commonly between 100 to 300 times, with numerous concept-based companies going public and experiencing surges of 300% to 1000% upon listing, despite having no revenue or profits. After the internet bubble burst, the Nasdaq index experienced a terrifying decline. After reaching a historical peak of 5048.62 points in March 2000, it plummeted to 1114.11 points by October 2002, resulting in a cumulative drop of 78% and evaporating over $5 trillion in market value. Therefore, today, as everyone discusses AI narratives and valuations, one cannot help but recall the stories and narratives from that time, which are almost identical to what is being said today. (Dongxin News Agency)