NEW YORK (Real Money) -- As the Nasdaq 100 closes in on its all-time high, the one recorded way back in the bad old days of 2000, you are hearing a lot of talk of dread about "here we go again!" and "when will we ever learn?"
You know the logic: If we are going back to those egregious levels we have to be on thin ice, because stocks were ridiculously overinflated then so they must, once again, be ridiculously overvalued now. Shouldn't we be selling like mad now, as we approach that historically dreaded high, so history doesn't repeat itself and we give back much of what we have made? Once irrational, always irrational?
Funny thing, though, like so many other attempts to stoke fear -- remember the March 2014 cloud selloff that was supposed to mimic the dive of 2000? -- a close look at the Nasdaq Composite Index (QQQ) when it was hitting those records in 2000 makes you feel more confident, not less, that we deserve to trade higher.
That's right: a look at each component at the time shows a market that was certainly overvalued, but not in the way so many uninformed people try to remember it.
Let me give you an aggregate view that might open eyes or jog memories, and then I will drill down to some of the members that led us higher back then to show you why I feel more emboldened, not less, that the comparisons are fatuous and reflect a lack of critical thinking.
First, if you had bought the 100 members of that Nasdaq index at the time and simply held on to each one, you would be up, in some cases up appreciably, on 26 of those stocks. Another 16 stocks got takeover bids at a premium to where they traded at the top.
OK, I know -- taken together, those outright winners trading today, and those that were taken over at a premium, amount to less than half of the list. But urban legend would have you recalling that you got your head handed to you on pretty much everything you bought at those levels.
Sure, there's time value of money. You got hurt on that. And, of course, it isn't enough just to be profitable. You could have held on to a lot of other stocks not in the comp and done far better. Many of the "winners" have, indeed, underperformed the S&P 500 (SPY) dating back to the same period. Still, though, it just wasn't the calamity that we seem to remember it as. Trust me: the pessimist's mind is playing tricks.