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Adam Fayed Forum

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Technology stocks are falling - is this significant?

Do you remember the 2000-2005 period? Tech stocks fell hard between 2000 and 2002 in particular. Tech wasn't taking over our lives. Many people thought that technology was over hyped in the 1990s.

Some, including the Nobel Prize winning economist Paul Krugman, predicted that emails and the internet wouldn't have a big impact on our lives. Many people agreed.

The Nasdaq took 14 years to recover from its 2000 height. 14 years. Yet somebody who bought at the peak would have made a lot. Anybody who bought in the middle as well, when valuations were low, would have made even more.

Just one year ago, the Nasdaq was about 33% lower than it was today, so a fall of 10% isn't a big deal. In fact, stock market falls of 50% happen regularly.

Look at last year. Most major stock markets fell 40%-50% but it wasn't a big deal for those who didn't panic sell. The point is, I wouldn't watch daily or weekly valuations.

Long-term technology is only going to play a bigger role in most people's lives, if we like it or not. Will it be a one-way move? Probably not. I imagine there will be a 3-12 month period after the pandemic when there is a lot of "pent up demand" for face-to-face activities like events.

Long-term, that won't affect the general trend. It is best to just hold assets, including the Nasdaq, long-term.