Between 1995 and 1999, tech stocks in the US stock market saw a meteoric rise. This meteoric rise in technology stocks enticed a lot of novice investors into investing in these technology stocks. Did you read the post on how to trade NFP Report? When the tech bubble burst in 1999, many people lost their lifetime savings in the stock market. Important question that comes to mind is the 1999 tech bubble back. Some people think Silicon Valley is a technology bubble. Watch the debate on technology bubble below!
There is a lot of speculation in the financial media that Silicon Valley is a technology bubble. Silicon Valley has been the trend setter for many decades. All major technology firms like Facebook, Apple, Google, Oracle etc are based in Silicon Valley. If you are a technology enthusiast, you might want to learn machine learning. You can take a look at our Python Machine Learning For Traders Course. In this course, we teach you in simple terms how you are going to use python in building machine learning systems for trading stocks and currencies. Watch this video also that compares today’s situation with that in 1999.
A bubble forms when the valuation of the company is higher than the future cash flows that it can generate. So be careful! Smartphone sales have peaked in USA. WhatsApp was bought for a hefty sum of $22 Billion. Is this a sign that the technology bubble is about to burst? A bubble forms when there is excessive borrowing in the market during good times. When sales peak just like those for smartphones and other technologies, it becomes hard for these companies to pay back their loans that were bought during good times. This is the time when the bubble bursts. It is always a good idea to know where the market is going if you are an investor in technology stocks.