10 Nov 2020
Are we in a dot-com bubble?
A handful of mega cap technology stocks have dominated equity markets in 2020. This has caught the attention of the media where pundits are quick to highlight the extreme nature of the moves and draw parallels with the dot-com tech bubble. This paper will address those comparisons by looking past the headlines, and through the 4Factor lens, to debunk many of those assertions and refocus on the fundamentals. We then assess the risks and opportunities for investors.
Analysing the quality of business models, valuation levels and operational momentum – as our 4Factor analysis allows us to do – gives us the confidence to remain invested in those stocks that are beneficiaries of strong secular trends. The global pandemic has only served to accelerate some of the trends that will further widen the gap between the digital winners and analog losers.Download PDF