Ok so after the next -80% drop (Crash) ... where should we find value stocks?
chatgpt
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Excellent question — and a subtle one, because after the 2000–2002 dot-com crash, many companies suddenly looked “cheap” by price, but only a subset actually qualified as value stocks in the traditional, fundamental sense.
Here’s what happened in context:
?? 1. The Scale of the Collapse - The NASDAQ Composite fell ~78%, wiping out trillions in paper wealth.
- Over half of listed tech companies on the NASDAQ went bankrupt or delisted between 2000 – 2003.
- Survivors like Amazon, Cisco, Intel, and Microsoft saw their price-to-earnings (P/E) ratios plunge from the 100s+ to more sustainable levels (often 20–40 by 2003).
??? 2. Value Stocks — by Definition A value stock is typically one with:
- Low P/E, P/B (price-to-book), or P/CF (price-to-cash-flow) ratio relative to its peers or historical average.
- Solid or improving fundamentals (profits, cash flow, assets).
- Often high dividend yield or tangible assets.
By that measure:
- Around 2002–2003, roughly 60–70% of all U.S. listed stocks qualified as “value” by Fama-French or Morningstar metrics.
- Compare that to the late 1990s, when less than 25–30% of stocks met value thresholds — the rest were “growth” or “momentum.”
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