Why recent technology troubles echo the 1999 dotcom bubble

The recent downward trajectory of tech stocks is reminiscent of the dotcom bubble, according to the BMO GAM Multi-Manager team, who highlighted that despite some of the companies having resilience, a combination of tighter monetary policy and higher cost of capital might spell trouble.

Anthony Willis, investment manager in BMO's multi-manager team described a ‘regime change' of tech's dominance in the financial markets as one of the potential key themes for 2022.  'Too much debt in system' is likely to make recent value/growth rotation transitory He explained the "ultra-loose monetary policy" extended by the pandemic" has created "a lot of distortions that feel kind of normal for some people". Willis noted that because of this "money has basically been free for decades" and that has led to significant outperformance in some markets including bonds and growth stoc...