During his recent interview with The Market, Jim Chanos explained why this reminds him of October 2000. Here’s an excerpt from the interview:
Q4 2022 hedge fund letters, conferences and more
Chanos: Sentiment still seems pretty frothy to me. We have stocks doubling again in the month of January, retail volume in the NYSE as a percentage of total volume hit a record two weeks ago, and you have record volume in zero days to expiration options which is basically gambling.
Tesla trades more options every day now than the S&P 500 and Apple. I’m not sure speculation is gone.
At close to 4200, the S&P 500 still trades at 21x trailing earnings. That’s not cheap. It reminds me of October 2000 when the Nasdaq was on its way to go down 80%.
After the first drop, people thought stocks got really cheap as valuations dropped from 10x revenues to 5x revenues. Well, valuation was on its way to 2x revenues. It should never have been at 10x.
Judging from past mania peaks can be dangerous because nothing got cheap in 2022.
You can read the entire interview here:
Jim Chanos Interview – The Market
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Article by The Acquirer’s Multiple.
