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1 Year returns...

QQQ : +18.66%
QQQE: + 7.33%  (Equal wight Nasdaq-100)

SPY : +12.06%
RSP : + 1.37%  (Equal weight SP500)

Yes, picking 1 year is cherry picking, but if you take the last "peak" of Nov 2021 (4 years ago) ; QQQ3 is up 13% IN TOTAL for a CAGR of 3.07% - not exactly what you would expect at the top of a bubble.

tecmo
...

I have no idea if these numbers are accurate - it came from Google Gemini, but it passes the smell test.

Forward PE ratio for Equal Weight SP-500 is 17.37, so if the market corrected by say 10% then this would get back into the 15s... which again hardly smells like a bubble...

tecmo
...

PS: Not sure if mungofitch reads this board, but I am confident he would have these numbers...

Yes, picking 1 year is cherry picking, but if you take the last "peak" of Nov 2021 (4 years ago) ; QQQ3 is up 13% IN TOTAL for a CAGR of 3.07% - not exactly what you would expect at the top of a bubble

Isn't that the point, equal-weight is not doing well, cap-weight is crazy due to the bubble-like valuations of a few companies?

Over the last three years:
QQQ +139%
QQQE +66%

SPY +88%
RSP +45%

https://stockcharts.com/freecharts/perf.php?SPY,RS...

Isn't that the point, equal-weight is not doing well, cap-weight is crazy due to the bubble-like valuations of a few companies?

            EPS (TTM)  PE
GOOG :      $10.14     28
MSFT :      $14.06     35
META :      $29.07     21
AMZN :      $ 7.09     34
AAPL :      $ 7.48     36
NVDA  :     $ 3.52     53

Valuations are stretched, but I wouldn't list these as crazy... certainly not at a level where a 50% correction in valuations with these would be warranted (which is what I would label as bubble level).

tecmo
...

PS: I used AI to generate these values, I spot checked one AAPL and it checked out.

Some are kinda crazy...You didn't include Tesla PE 298 market cap $1.4T

Then there's some outside the Mag 7, like Palantir PE 453, market cap $459B

https://www.multpl.com/s-p-500-earnings-yield

Panatir is pretty crazy, the PE isn't what I look at (their business is still in the scale up stage); its the P/S, TTM their revenue is $3.89B - yes its growing at 40% - nice; but to pay 100x (or more) for that growth seems excessive.

That said, that isn't IMO proof of a full bubble - at least not one that can be compared to the .COM market of 25 years ago.

TSLA is its own beast - it has traded at elevated levels for 10 years, I don't think today's valuation is actually outside of that historical range.

tecmo
...

BTW: Thanks for the link; these are useful datasets to have bookmarked.

https://www.cnbc.com/2025/11/11/big-short-investor...

‘Big Short’ investor Michael Burry accuses AI hyperscalers of artificially boosting earnings


“Understating depreciation by extending useful life of assets artificially boosts earnings - one of the more common frauds of the modern era,” Burry wrote. “Massively ramping capex through purchase of Nvidia chips/servers on a 2-3 yr product cycle should not result in the extension of useful lives of compute equipment. Yet this is exactly what all the hyperscalers have done.”


He has a point... the idea that these GPUs are still going to be providing value 3+ years from now seems unlikely.


tecmo
...

CSCO reported solid earnings, this is noteworthy because the stock is now trading near its all time high after hours. The previous high was set on ....


March 24, 2000


https://www.cnbc.com/2025/11/12/cisco-csco-q1-2026...

Cisco beats on earnings and guidance, lifting stock

Cisco said that AI infrastructure orders from “hyperscaler customers” reached $1.3 billion, “reflecting a significant acceleration in growth.”


tecmo
...

Then there's some outside the Mag 7, like Palantir PE 453, market cap $459B


I think Oracle is the curious company to watch. Already down 30% from the massive jump after their earnings call, lots of questions about their ability to finance the large amount of debt they will need to build out.

tecmo
...

I don't disagree with the overall conditions, but Cisco picked up Splunk cheap which also helped, $1.3 is < 10% their revenue, and based on a cursory search their 2000 GAAP EPS were $.36 and they were $2.54 in the last fiscal year. They are a bigger and more important company than 25 years ago and are a bad bubble indicator.

The hyperscalers don't use CSCO in terms of net dollar spend as CSCO would have captures back then. You have a lot more SDN (or software defined networking) and custom hardware and silicon. https://techblog.comsoc.org/2025/09/01/hyperscaler... is a fun read I found. OCP gets mentioned a lot (Open Compute Stack) and that has additional interesting reading if you follow up on it.

The self-dealing between the real suppliers seems to be orders of magnitude greater than CSCO's slice of the revenue. NVDA's OpenAI investment really has invited overdue scrutiny.

I sometimes think about the intrigue around OpenAI's leadership transition and transition from a nonprofit and the people involved in that episode.

Here's a particularly stupid bubble indicator: https://seekingalpha.com/news/4521047-curiositystr...

Stinchcomb stated that CuriosityStream’s "3 complementary growth pillars, subscriptions, licensing and advertising are driving momentum and strengthening CuriosityStream's position at the intersection of knowledge, media and AI."

the company's growing reputation among traditional media partners and hyperscalers. Stinchcomb explained, "To achieve dominance as a provider of AI training data, we've assembled nearly 2-million hour library of video and audio across multiple genres, content largely cannot be scraped from the open web."

I don't disagree with the overall conditions, but Cisco picked up Splunk cheap which also helped, $1.3 is < 10% their revenue, and based on a cursory search their 2000 GAAP EPS were $.36 and they were $2.54 in the last fiscal year. They are a bigger and more important company than 25 years ago and are a bad bubble indicator.

We have 1 data point that suggests that when CSCO trades near $80, that is a market top - time will tell if we get a second data point :)

BTW: 25 Years ago, I think CSCO was the most valuable (market cap) company on the SP500, so they were definitely a "big and important" company in the .com economy - sort of like NVDA is now...

tecmo
...

He has a point... the idea that these GPUs are still going to be providing value 3+ years from now seems unlikely.

Another article that discusses the depreciation cycle for GPUs

https://www.cnbc.com/2025/11/14/ai-gpu-depreciatio...

* Depreciation has been the talk of the AI industry of late as investors try to determine the useful life of key pieces of equipment.

* Google, Oracle and Microsoft have pegged the lifespan of their AI computers at up to six years, but skeptics like short seller Michael Burry say they may not last that long.

* The current AI boom is only three years old, so estimating depreciation remains a challenge.

tecmo
...

Nvidia isn't Enron, its Cisco...

https://www.cnbc.com/2025/11/25/nvidia-pushes-back...

“Nvidia emailed a memo to Wall Street sell side analysts to push back on my arguments on SBC and Depreciation. I stand by my analysis,” Burry said in a post on Substack, referring to stock-based compensation. “I am not claiming Nvidia is Enron. It is clearly Cisco
.”

tecmo
...

https://www.cnbc.com/2025/12/10/ciscos-stock-close...

Few companies were as hot in early 2000 as Cisco, whose networking equipment served as the backbone of the internet boom.

On Wednesday, Cisco’s stock surpassed its dot-com peak for the first time. The shares rose almost 1% to $80.25, topping their prior split-adjusted record or $80.06 reached on March 27, 2000. That’s the same day that Cisco passed Microsoft to become the most valuable publicly traded company in the world.

Back then, investors saw Cisco as a way to bet on the growth of the web, as companies that wanted to get online relied upon the hardware maker’s switches and routers. But following a half-decade boom, the dot-com bubble burst just after Cisco reached its zenith, a collapse that wiped out more than three-quarters of the Nasdaq’s value by October 2002.

Forward PE ratio for Equal Weight SP-500 is 17.37, so if the market corrected by say 10% then this would get back into the 15s... which again hardly smells like a bubble...

Morningstar has the forward PE of RSP as 17.26, close to the above value.

Value & Growth Measures   RSP    SPY
    Price/Earnings       17.26  22.49
      Price/Book          2.63   4.55
      Price/Sales         1.65   3.22
    Price/Cash Flow       10.6  15.78
    Dividend Yield %      1.94   1.25
  Long-Term Earnings %    9.37  10.26
 Historical Earnings %    1.04   9.72
    Sales Growth %        6.17   7.98
  Cash-Flow Growth %      0.76   7.14
  Book-Value Growth %     6.01   8.73

Using gtr1, I get a 22.38 PE for SPY on 20251128, which is close to the M* value. (calculated as the sum of market cap divided by the sum of earnings)

Since 1997, the PE for SPY has ranged from 8.63 (on 20081121) to 24.64 (on 19991230), with a 16.45
average value. (Earnings and Market Cap are highly correlated, but the Market Cap seems to drop before the Earnings drop.)

To generate the signals:
1. go to the gtr1 link listed below.
2. click the radio button "Detailed Report".
3. click the check box "Signal Values".
4. click Run Backtest.
5. click Download report.
6. open report (a csv file) with a spreadsheet program.
7. search for "Daily Signal Values" in the report. [EY] column is the earnings yield. PE is 1/[EY].
http://gtr1.net/2013/?~SP500_PEforward:h1::sp500.a...

  Date    [sumE]  [sumMC]  [EY]     PE
19971110   0.39     6.85   5.7%   17.66
19981110   0.41     8.47   4.8%   20.77
19991110   0.48    10.71   4.4%   22.55
20001108   0.57    12.48   4.6%   21.74
20011114   0.48    10.12   4.8%   21.02
20021114   0.50     7.87   6.3%   15.80
20031114   0.57     9.73   5.9%   17.09
20041116   0.67    10.80   6.2%   16.03
20051115   0.80    11.38   7.0%   14.29
20061115   0.87    12.81   6.8%   14.66
20071116   0.95    13.18   7.2%   13.82
20081117   0.79     7.92   10.0%  10.01
20091117   0.70    10.08   7.0%   14.36
20101117   0.88    10.84   8.1%   12.32
20111116   1.02    11.78   8.6%   11.57
20121119   1.06    12.61   8.4%   11.92
20131119   1.13    16.53   6.8%   14.67
20141119   1.19    18.82   6.3%   15.77
20151119   1.17    19.12   6.1%   16.38
20161118   1.17    19.38   6.0%   16.53
20171120   1.29    22.95   5.6%   17.82
20181120   1.54    23.55   6.6%   15.26
20191121   1.53    26.75   5.7%   17.50
20201120   1.42    30.85   4.6%   21.66
20211122   1.94    41.67   4.6%   21.52
20221122   2.02    34.53   5.9%   17.09
20231124   2.13    39.57   5.4%   18.57
20241125   2.41    52.31   4.6%   21.68
20251128   2.73    61.00   4.5%   22.38

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