Monday Markets Mail #KW 48

on 23th of November 2020

Is the financial market history of "Nifty Fifty" shares repeating itself?

© Adobe Stocks
© Adobe Stocks
Kathrein statement
In the late 1960s and early 1970s, a boom of around fifty growth stocks was triggered by concerns about an excessive debt burden in the USA as a result of the Vietnam War. They were called "Nifty Fifty" ("nifty" translates as "sophisticated"). The bear market in 1973/74, triggered by the collapse of the Bretton Woods system and the first oil crisis, led to the bursting of the bubble. There are exciting parallels to today, time for a little financial market history:

The investment environment in the late 1960s and early 1970s was characterized by rising inflation expectations and doubts about government bonds due to rising national debt in the wake of the Vietnam War. As a result, many investors turned to equity investments, especially to high-profit companies with very solid financial figures and a certain market dominance. The Facebook's, Amazon's, Netflix', Microsoft's, Apple's and Google's, also known as FANGMAG's, of that time are our current values, Walt Disney, Mc Donald's, Johnson & Johnson, IBM, to name a few.
The full-length Kathrein statement can be found in the stock exchange comments section.