o Starting my career during the late 90s Internet bubble, I can't help to compare the current mania over Blockchain vs. Internet stocks in the late 90s.
o Was the underlying technology for the Internet revolutionary? Absolutely - it was a game changer. I can't live my life without the Internet.
o But the valuations you paid for those stocks in the late 1990s would have gotten you in trouble if you bought too late or didn't sell before the bubble bursted.
o If you bought the NASDAQ-100 index at the peak of the bubble, it would have taken you 14 years to breakeven on your position (assuming you held on - which realistically very few would have). Your entry point is everything in this game.
Source: Bloomberg, Astoria.
o Is the underlying technology for Blockchain potentially a game changer? Perhaps.
o I am NOT saying Blockchain stocks are rich or cheap. Just make sure, if you are going to allocate to this theme you are doing your research appropriately to determine if the risk characteristics justify whatever valuations you are paying.
o Follow Astoria on Twitter for more insights. @AstoriaAdvisors
Best, John Davi
Founder & CIO of Astoria
For full disclosure, please refer to our website: https://www.astoriaadvisors.com/disclaimer