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July 11, 2020, 1:51 p.m. EDT

Get ready for the stock market bubble to burst

The asset bubble, backed by the Federal Reserve, sets up a scenario similar to the market top in 2007

By Cody Willard, MarketWatch


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The Pacaya volcano in the San Vicente Pacaya municipality, close to Guatemala City, erupts on June 20, 2020.

It sure is easy to make money trading stocks these days, huh? People are chasing hundreds of penny stocks that are up 1,000% over the last couple months. Tech stocks, especially the ones we’ve been long for a while, are on fire too. It seems like we have at least a handful of stocks up 5%-15% — every day.

Tesla /zigman2/quotes/203558040/composite TSLA +3.79%  is up 500% from where we made it our largest position last year, giving us a 333% annualized gain since then. That might seem pretty good. But DocuSign /zigman2/quotes/205992027/composite DOCU +4.36%  is up almost 200% since we added it to our portfolio on March 12 for a 1,828% annualized gain. Zoom Video Communications /zigman2/quotes/211319643/composite ZM +5.55%  has zoomed 150% from where we bought it at that same time for a 1,411% gain. And how about Dynavax Technologies /zigman2/quotes/203017054/composite DVAX +10.48% , which has more than doubled since we bought it two months ago — if the stock will simply keep moving at the same pace we’ll be up 6,267% after holding it a year.

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,485.00
+54.24 +3.79%
Volume: 8.81M
Aug. 3, 2020 4:00p
P/E Ratio
772.83
Dividend Yield
N/A
Market Cap
$266.64 billion
Rev. per Employee
$439,627
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/zigman2/quotes/205992027/composite
US : U.S.: Nasdaq
$ 226.28
+9.45 +4.36%
Volume: 3.21M
Aug. 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$39.79 billion
Rev. per Employee
$310,851
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/zigman2/quotes/211319643/composite
US : U.S.: Nasdaq
$ 268.00
+14.09 +5.55%
Volume: 6.79M
Aug. 3, 2020 4:00p
P/E Ratio
1,557
Dividend Yield
N/A
Market Cap
$71.63 billion
Rev. per Employee
N/A
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/zigman2/quotes/203017054/composite
US : U.S.: Nasdaq
$ 8.96
+0.85 +10.48%
Volume: 6.98M
Aug. 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$861.15 million
Rev. per Employee
$32,924
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