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Yes, Keep Buying This Market, If You Like Losing Money

Bullish articles on the market at this stage of the game, really get me going.  “It’s full steam ahead….We are just getting started.”

What a bunch of BS.

Of course, you are free to listen to this nonsense, but keep one thing in mind. Our mathematical and timing work shows that the bull market is nearly over and the bear market is just starting. Over the next three years, the bear market of 2014-2017 will take the market much, much lower. When its all said and done investors who are buying today will lose a substantial portion of their capital.  You have been warned. 

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Yes, Keep Buying This Market, If You Like Losing Money  Google

crazybull

American household net worth is at an all-time high, surpassing $80.66 trillion dollars, according to the Federal Reserve Bank’s latest “Z.1” release.

Of the $9.8 trillion added in 2013 alone, $2.19 trillion came from real estate while $3.85 trillion were added thanks in large part to a rising stock market; the benchmark S&P 500 index was up 29.6% in 2013, going up to 31.9% if dividends are added.

With equities being an important factor in household net worth accounting for one-sixth of total assets, will it continue to do so in the weeks and months ahead?

Andrew Busch, editor and publisher of The Busch Update, believes the market is headed higher and says the technicals for the S&P 500 prove it.

“I think what’s interesting about this move in the stock market is just how powerful it is,” says Busch. “With technical analysis, we’re always trying to figure out what patterns are out there so that we can trade off of them and make money.”

For Busch, one such pattern is that three of the S&P 500’s moving averages have been moving together well over a year now. Those moving averages are the 50-day, 100-day, and 200-day moving averages and they continued to stay more or less parallel despite the market drop in January.

“These three stack on top of each other,” says Busch, “with the top line 50, the middle one 100, and the bottom 200, meaning everything’s pointing up. Even the selloff in January couldn’t get the 50-day moving average to move below the 100.”

Busch also notes that whenever the S&P 500 would hit new highs over the past year, it would drop a little but always to a point higher than its previous drop.

“That also underscores how powerful this move up has been for stocks overall,” says Busch, who notes the January drop was to 1,773. “If we see a low below that level, then we change the pattern and then you want to start unloading some stocks. Until that happens, it’s full steam ahead.”

Chad Morganlander, portfolio manager at Sifel’s Washington Crossing Advisors, agrees with Busch’s bullish outlook on the S&P 500.

“We believe that the US equity markets for 2014 will be up perhaps 7% or 8%,” says Morganlander, who thinks the economy will show better-than-expected growth this year. “Our GDP forecast is for over 3% for 2014. And, what really drives the stock market – and, it’s about 90% correlated – is earnings. We believe S&P earnings for 2014 will be up roughly 7% to 8% and that ties into our price target.”

According to Morganlander, the economy’s growth is based on more credit, capital investment, and job creation. “We hit a pothole over the last several months,” says Morganlander, “but over the next several months, as we start to warm up and the great ‘Ice Age’ starts to melt, we’re going to start to better employment numbers and better employment data coming out.”

Time To Buy Emerging Markets?

Cheap is a relative measure. Yet, when compared to out of this world US valuations, emerging markets outlined below are indeed cheap.  

Is it time to load up? 

Not so fast. There are a few things we have to consider here. First, as the US market enters its bear market of 2014-2017, it is highly probable that emerging markets will follow the US market and get even cheaper. While the divergence is possible, based on the past, it is unlikely. Second, just because the market is cheap doesn’t mean it can’t go down further for a prolonged period of time. We  have to wait for a technical market reversal pattern before committing capital.

In conclusion, this would be a great time to start following emerging markets, waiting for a trend reversal. Once the US Market sells off and once the bear trend in emerging markets shifts, such markets will present patient investors with an amazing buying opportunity.  

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Time To Buy Emerging Markets? Google

emerging markets

These markets are ‘mind-boggling’ cheap

Given events in Argentina, Venezuela, Turkey, and Ukraine, emerging markets are looking more like an emerging threat rather than an emerging opportunity.

However, Larry McDonald, Senior Director at Newedge, says emerging markets are a great place to find bargain investments. The usually bearish author of “Colossal Failure of Judgment” has two reasons why he thinks emerging markets are an attractive buy.

1. Seventeen weeks of outflows from emerging markets

During the first two months of 2014, $11.3 billion have left emerging market equity and bond exchange traded funds, reflecting the overall sentiment of worldwide investors. McDonald sees this as mirroring similar outflows in developed markets that subsequently rebounded significantly.

“What we’ve seen at the great market bottoms – in the United States, 2009; Europe, 2012 – [is] a surge in outflows,” says McDonald. “What’s happening now in emerging markets is historic and it’s right on proportion with the 2012 bottom in Europe and 2009 bottom in the United States.”

2. Lowest valuations for emerging markets since 9/11

Though emerging markets are considered relatively risky, particularly in this environment, McDonald believes they are being over-discounted. He believes investors worried about buying emerging market stocks should heed the words of Seth Karman, founder of hedge fund Blaupost Group, who once said, “Buying right never feels good.”

“If you look at the emerging markets now, they are trading at a great valuation with a lot of with a lot of risks in the world,” says McDonald. “On a price-to-book [basis], they’re at 1.3 times book [value]. Developed markets like Europe and the United States are well above 2.2 to 2.3 times book. But, within the emerging markets, countries like Russia are trading at half [the value] of book and that’s too cheap to pass up.”

Emerging Markets Price-to-Book
Indonesia 3.2x
India 2.6x
South Africa 2.6x
China 1.5x
Turkey 1.5x
Brazil 1.2x
Greece 1.0x
Russia 0.5

While McDonald acknowledges that fear of instability in places like Russia given the current political climate may be a reason for the deep discount to its stocks, he believes that’s overdone. As example, he points to the Market Vector Russia ETF (the RSX).

“The RSX fund has 32 million shares outstanding,” says McDonald. “On Monday, 25 million traded. That’s the type of thing you see when a biotech company misses earnings or has a failed trial. This isn’t a biotech – this is a country’s stocks – which is mind-boggling. So, I don’t think there’s anybody left to sell these names.”

5-Year Market Cycles & Weekly Update. A Must Read. Trust Me.

z15

Weekly Update & Summary: March 8th, 2014

The market continued its bull move with the Dow Jones being up +108 points (0.67%) and the Nasdaq being up +28 points (0.65%) for the week. Structurally, the market left another gap at 16360 (in addition to the one last week at 16,100). Plus, there are a number of gaps going all the way down to 15,500. All of them are to be closed during the upcoming bear market leg.   

Fundamental & Market Analysis:

Last week we looked at the 17 year alternating Bull and Bear market cycles and why this Bear market that started in 2000 will complete itself only in 2017. Today, I would like to take a quick look at the 5-Year Cycle and the reason for today’s bull market.

Particularly, let’s take a look at the two most recent 5-Year Cycles and how they apply to today’s stock market.

Long Term Dow Cycles 5

#1: 5-YEAR CYCLE 1994 Bottom To 2000 Top.

This cycle started on December 9th, 1994 and completed on January 14th, 2000. During this time the stock market moved 8269 points in 1287 trading days. In calendar terms, the cycle took 5 Years and 36 Days to complete. We all know what happened afterwards.

#2: 5-YEAR CYCLES 2002 Bottom to 2007 Top

This cycle started on October 10th, 2002 and completed on October 11th, 2007. During this time the stock market moved 7098 points in 1259 trading days. In calendar terms, the cycle took 5 Years and 1 Day to complete. We all know what happened afterwards. 

TODAY’S-5 YEAR CYCLE  2009 Bottom to 2014 Top ?

This cycle started on October 6th, 2009 and is scheduled to complete itself on XXXX. As of today, the stock market moved 10036 points in 1260 trading days. In calendar terms, we are exactly at 5 years.  The questions here is as follows….

Are we currently developing the 5 cycle or are we in the cyclical bull market? If yes, when will this cycle top out and what’s next?

While I have the exact answer, unfortunately, that answer is available to my premium subscribers only. Please Click Here.

Now, the sample above is just two cycles. There are many more. Here are just a few from off the top of my head. 1924-1929, 1932-1937, 1961-1966, 1982-1987.  

In summary, 5-Year cycle is an incredibly important cycle and represents one completed growth cycle within the stock market. When it completes, the market tends to shift gears and change trends. In some of my earlier forecasts I have suggested that the Dow topped out on December 31st, 2013 ushering in the bear market of 2014-2017. That should make it very clear what happens next. If you would be interested in an exact breakdown, please visit our Subscriber section. 

Macroeconomic Analysis: 

The situation in Ukraine continues to escalate.

With the US, the EU and Russia throwing out insults and threatening sanctions against each other, this situation might very well become the “fundamental” tipping point for the market as early as next week. Today, I would describe the situation as a tightrope balancing act. It might die down over the next couple of weeks, but it might also escalate to unimaginable level. Fast. Whatever happens, this is not a good sign for Russia/US relationship going forward.

It would be interesting to see if the point of force described in the Mathematical & Timing section below would be the same point where things between the US and Russia escalate further.

Technical Analysis: 

The overall technical picture is clearing up.

Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market. 

Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.

Short-Term: Short-term trend has turned bullish as well.

While all 3 trends are bullish, this might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.    

Mathematical & Timing Analysis: 

(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public.  As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If  you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial). 

XXXX

Date Target: XXXX
Price Target:  XXXX

XXXX

Hence, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action.

If You Are A Trader: XXXX

If No Position: XXXX

If Long: XXXX

If Short:  XXXX

CONCLUSION: 

An incredibly important week is coming up. Above, I have described the point of force, various possibilities and exactly what you should do in each case. With increased volatility, multiple interference patterns and an incredibly important long-term turning point we must be very careful and risk averse here.  Those anticipating the moves and those who can time them properly will be rewarded appropriately.

Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start. 

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5-Year Market Cycles & Weekly Update. A Must Read. Trust Me. Google

What’s Really Behind This 5-Year Stock Market Rally?

The chart below delivers a clear “in your face” answer. If you believe this is going to end well, call me, I have some Nortel, Pets.com and Worldcom stock to sell you. 

z14

Did Western Governments Pay For Snipers Who Killed Dozens Of People In Ukraine? Disgusting!!!

Russia wants an investigation. As I reported earlier in the week, a leaked phone call (authenticity confirmed) between the EU foreign affairs chief Catherine Ashton and Estonian foreign affairs minister Urmas Paet suggests that there is clear evidence that the same snipers were killing people on both sides. Both civilians and police. Further, the call suggests that the snipers were hired by Maidan leaders…..the people behind this so called “revolution”, the same people who were clearly financed by the West. 

If proven true, this is a new low for both the US Government and their EU counterparts.  

You can read my previous report on the subject matter as well as listen to the above mentioned phone call HERE. 

In addition, please see the article below for more information. 

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Did Western Governments Pay For Snipers Who Killed Dozens Of People In Ukraine? Disgusting Google

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Russia calls for OSCE probe into Kiev sniper deaths

Moscow (AFP) – Russian Foreign Minister Sergei Lavrov on Saturday called for an OSCE investigation into who was behind the deaths of dozens of people in Kiev last month in attacks by snipers, saying the truth could no longer be “covered up”.

Lavrov’s comments came after Estonia’s top diplomat told EU foreign policy chief Catherine Ashton in a phone call leaked this weak that the then-Ukrainian opposition to president Viktor Yanukovych may have been involved in the attacks.

“The latest information about the so-called snipers case can no longer be covered up,” Lavrov told a news conference in Moscow with his Tajik counterpart.

“We have proposed that the OSCE (Organisation for Security and Cooperation in Europe) takes up an objective investigation of this and we will ensure there is justice.

“There have been too many lies, and this lie has been used too long to push European public opinion in the wrong direction, contrary to the objective facts.”

Western states have blamed Yanukovych’s now disbanded elite riot police force for much of the killing that rocked in Kiev in February.

However Russia has strongly emphasised the leaked phone call between Estonian Foreign Minister Urmas Paet and Ashton as evidence for its argument that the new post-Yanukovych government in Kiev is made up of dangerous extremists.

Lavrov’s call for a full probe indicates that this is an issue Russia will not allow to drop, risking new tensions with the West.

In the audio of the February 26 call, whose authenticity was confirmed by Estonia, Paet told Ashton he was informed in Kiev that “they were the same snipers killing people from both sides.”

Dozens of protesters and around 15 police officers were killed in the attacks.

Paet, who had held talks with Ukraine’s new leaders on February 25, added: “It’s really disturbing that now the new coalition, they don’t want to investigate what exactly happened.”

Why Everyone Should Just Chill Out & Go Grab A Beer

The video below shows how Europe’s borders changed over the last 1,000 years. Making today’s action in Crimea/Ukraine/Russia not only inconsequential, but kind of ridiculously unimportant. Relax Obama. Go Grab A Beer. 

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Why Everyone Should Just Chill Out & Go Grab A Beer  Google

Investment Joke Of The Day. Einstein Dies And Goes To Heaven

einstein in heaven

Einstein dies and goes to heaven only to be informed that his room is not yet ready. “I hope you will not mind waiting in a dormitory. We are very sorry, but it’s the best we can do and you will have to share the room with others” he is told by the doorman. 

Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. “See, Here is your first room mate. He has an IQ of 180!”
“Why that’s wonderful!” Says Albert. “We can discuss mathematics!” 

“And here is your second room mate. His IQ is 150!”
“Why that’s wonderful!” Says Albert. “We can discuss physics!” 

“And here is your third room mate. His IQ is 100!”
“That Wonderful! We can discuss the latest plays at the theater!” 

Just then another man moves out to capture Albert’s hand and shake it. “I’m your last room mate and I’m sorry, but my IQ is only 80.”
Albert smiles back at him and says, “So, where do you think interest rates are headed?” 

Crimea War Conundrum

russia and usa

The war of words, sanctions and “My Di#$ Is Bigger Than Your Di*&” continues to escalate.

USA TO RUSSIA:

  • GET OUT OF THE UKRAINE OR WE WILL SANCTION YOUR ASS. – Almost Everyone. 

RUSSIA TO USA: 

  • U.S. SANCTIONS AGAINST MOSCOW WOULD “HIT THE UNITED STATES LIKE A BOOMERANG” – Russia’s Foreign Minister Lavrov. Keep in mind, Russian lawmakers are already trying to push a bill that would confiscate Western assets. 

In related news, Western Media is going into overdrive with the following premise…

 “Nobody’s scared of America anymore”.  

Call me a bunny hugger, but why should anyone be “Scared of America”? I would much rather be respected than feared. With extremist on both sides of the issue driving our foreign policy, this is not going to end well. 

Oh well, at least the stock market is up. Oh wait..

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 Crimea War Conundrum  Google

With heavily armed Russian-speaking troops patrolling the streets, the Crimean Parliament voted Thursday to join Russia and put its decision to a referendum. The all-but-inevitable annexation of Crimea is moving forward, despite protests, warnings and threats from the U.S. and its allies.

We have entered a new Cold War.

The clash between Vladimir Putin’s Russia and the forces arrayed in support of Ukraine’s independence-minded leaders has crashed the vaunted “reset,” ending hopes that Moscow and the West would smooth relations and work hand-in-hand toward common objectives.

Frida Ghitis

Frida Ghitis

Nobody can predict with certainty how this conflict will end. But the world can already glean important lessons. Unfortunately, most of those lessons are cause for deep concern. Here are five clear messages from the crisis in Ukraine.

1. Nobody’s scared of America, but American and European values hold strong appeal.

Lest we forget, this all started over a move by the now-deposed Ukrainian president, Viktor Yanukovych, who broke his promise to sign a partnership agreement with the European Union in favor of closer ties with Moscow. Ukrainians were enraged, not just because they want more trade with Europe but because they have seen what Western standards can bring to a society.

They were fed up with corruption, authoritarianism and stagnation. They wanted their country to be free of Moscow’s interference, and many gave up their lives to fight for an ideal of stronger democratic institutions, rule of law and fair play.

As strong as the pull of these values is, their principal advocate, the U.S., has lost much of its ability to stare down its foes in support of those who want to institute democratic principles in their countries. We saw it when President Barack Obama declared — years ago — that Syrian dictator Bashar al-Assad must step down. We saw it when then-Secretary of State Hillary Clinton was pelted with tomatoes in Egypt. And we saw it in Ukraine, when Obama warnedPutin to respect Ukraine’s territorial integrity, only to see the Russians capture Ukraine’s Crimean Peninsula. America does not intimidate.

Its loss of influence means strongmen and dictators have a freer hand.

2. You don’t mess with Putin without paying a price.

Even if Moscow were to relinquish all control of Ukrainian territory today, Putin has already achieved a main goal. He has sent a clear message to countries that were once part of the Soviet Union — and perhaps to the USSR’s former Eastern European satellites — that they cannot defy his wishes without paying a painful price. In that sense, Putin has won.

A top Putin aide warned last summer that Ukraine was risking “suicide” if it dared to defy Moscow. Now we know this was no bluff. Putin is serious about protecting Moscow’s sphere of influence. It’s not clear how closely he wants to control what are supposed to be independent countries.

3. If you are a vulnerable state, you may regret surrendering nuclear weapons.

This may be the most dangerous of all the lessons from this crisis. Ukraine had a sizable nuclear arsenal at the end of the Cold War, but it agreed to give it up in exchange for security guarantees. In the 1994 Budapest Memorandum, Ukraine committed itself to dismantling the world’s third-largest nuclear arsenal. Russia, in exchange, vowed to respect Ukraine’s borders and its independence. Now, Russia has clearly violated those commitments. If Ukraine still had its atomic weapons, Moscow would have thought twice before seizing parts of Ukraine.

4. Don’t expect support from all international peace activists (unless the U.S. invades).

To liberal activists in Ukraine and Russia, the reaction from international peace movement must be a hard pill to swallow. Parts of Ukraine have been captured at the point of a gun by a regime that actively suppresses dissent. When liberal Russians protested, police arrested hundreds of anti-war demonstrators.

While Russia’s invasion of Ukrainian territory and its harsh crackdown on local protests have been criticized by some human rights activists, the reaction among some prominent “peace” activists has been astonishing. Several have mimicked Putin’s line, blaming the U.S. for the crisis. Instead of taking a clear stance in support of a country with invading military forces on its soil, some so-called anti-war groups have taken the opportunity to dust off their anti-American vitriol.

A favorite line of discussion is whether Washington has any right to criticize Russia’s invasion of Ukrainian territory after the U.S. invaded Iraq, a country that was ruled by one of the world’s most brutal, genocidal dictators. However misguided America’s Iraq invasion, even drawing the comparison is an insult to Ukrainians.

Opinion: Putin’s Ukrainian endgame

5. The use of brute force to resolve conflicts is not a thing of the past.

One day, if history moves in the direction we all wish, countries will solve their disputes through diplomacy and negotiation. Sadly, that day has not arrived. John Kerry has expressed dismay at Putin’s “19th-century” behavior, but power politics, forcible border expansion and brazen aggression have not been relegated to the history books; witness events in places like Syria, the Central African Republic and now in Ukraine.

Those are the first five lessons. But allow me to offer a bonus, a work in progress that could join as No. 6: When the stakes grow high enough, the U.S. and Europe may rise to the challenge.

Western nations seemed caught off-guard by Putin’s “incredible act of aggression,” as Kerry termed it. Some of Putin’s gains (see No. 2) may be irreversible. But the U.S. and Europe have been shaken up by events, and they may yet send a message of their own, helping Kiev’s government succeed and prosper as it sets out to chart a future of its own and limiting Putin’s ability to replicate his acts of intimidation.

Kerry’s visit to Kiev was a powerful moment. His unvarnished message to Putin, if backed by action, was a respectable start. The U.S. would prefer to see this crisis resolved through negotiations, he declared, but if Russia chooses not to do so, Washington’s and its partners “will isolate Russia politically, diplomatically and economically.” Already the EU is offering Ukraine an aid package comparable to the one Putin used to lure it away. Secretary of Defense Chuck Hagel is boosting ties with Poland and the Baltic States, and economic sanctions are under discussion.

If Putin wants another Cold War, he has one.

 

China To Russia: We Stand With You…..Suck It America

russia-china-investwithalex

The world is being divided in half as we speak. As my in depth report (coming out next week) will show it will be NATO Vs. Russia/China coalition. Today Chinese Foreign Ministry released the following statement. 

“China has consistently opposed the easy use of sanctions in international relations, or using sanctions as a threat.”

Later, Russia fought back with a statement of their own. Indicating that if sanctions are imposed they will turn to China as their primary ally and business partner. Further adding, “Western countries would largely be hurting themselves if they impose tougher sanctions.”

Who cares and why is any of this important?

As my next weeks ( Wednesday’s Report) report will show, this development will lead to an eventual war. Not in the Ukraine, but worldwide. This war will impact everyone. We are still many years away, but this is an initial development. My timing and mathematical work confirm the same.  I encourage you to visit us next Wednesday to read the report and to see how it will play out.  

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China To Russia: We Stand With You…..Suck It America  Google

Warning: Are Silicon Valley Nerds About To Eat It….Again?

Yes, we are indeed playing the game of musical chairs here. Today’s valuations are out of sync by any measure, particularly for the high tech start ups like Facebook, Twitter, Tesla, etc… Are these companies about to collapse as their predecessors did in the early 2000? 

My answer might surprise you…. 

NO. Nasdaq will not collapse to the extent it did in 2000-03 in the upcoming bear market of 2014-2017. At least based on my mathematical and timing work. Sure, the companies above will decline to the X multiple of the market when the bear market accelerates, but they will NOT collapse to the tune of 90-95% as they did back then. For instance, while it is highly unlikely that Facebook drops into the single digits over the next 3 years, it is likely Facebook will decline from today’s price of $70 to about $20. Making it a fairly good short bet.

Again, please do your own research and make your own investment decisions. Timing is the most important element here. If you would like to get it right, please check us out here.  

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Silicon Valley Nerds About To Eat It….Again. Google 

american economic recovery investwithalex

Not many executives have seen their companies double in value in one day. Peter Bardwick has seen it twice. Bardwick was chief financial officer of financial news site MarketWatch when it started initial trading on Jan. 15, 1999, at $17 a share. By day’s end it hit $97.50, for a market value exceeding $1 billion. Fourteen years later, on Sept. 20, 2013, Bardwick, now CFO of digital advertising firm Rocket Fuel(FUEL), watched its stock almost double in value on its first day of trading.

Amid such Day One stock pops, high valuations, and buoyant equity markets, warnings of an asset bubble are again echoing across Silicon Valley. Nasdaq’s(NDAQ) 38 percent climb last year, and deals such as Facebook’s (FB) recent agreement to spend as much as $19 billion on fledgling messaging service WhatsApp, have added to worries about a crash like the one that sent the Nasdaq Composite Index plummeting about 80 percent from its March 2000 peak. By the end of 2004, 52 percent of dot-com startups that had sought venture capital—including investor darlings Pets.com and Webvan.com—were extinct, according to research by the University of Maryland and the University of California at San Diego.

“The real question is whether a crash will occur now or after the markets rise another 30 percent,” says Ian D’Souza, an adjunct professor of behavioral finance at New York University who co-founded Tri-Ring Capital, a technology-focused equity fund. Other investors, bankers, and venture capitalists say too much has changed to put the initial public offering market in danger of imploding now. “Investors have become more discriminating and more focused on the individual businesses,” says Bardwick. “In the ’90s, everything was just going up, and when that stopped, it happened in a really bad way.” MarketWatch never exceeded its opening-day value, falling to a low of $1.26 in 2001 before Dow Jones acquired it in 2005 for $18 a share, just above its IPO price. Rocket Fuel remains at almost double its IPO price.

Last year 208 companies went public in the U.S., raising more than $56 billion, according to data compiled by Bloomberg. Their stocks rose an average 21 percent on their first day of trading, the biggest annual average increase since 2000. In their debuts in November, Twitter (TWTR) jumped 73 percent and Zulily (ZU), a shopping website, rose 71 percent.

Companies and bankers are setting initial prices at reasonable levels, according to data compiled by Jay Ritter, a finance professor at the University of Florida. IPOs were priced at a median of 30 times sales in 2000, compared with 5.2 times last year, the data show. MarketWatch traded at 46 times 1999 sales on its first day, while Rocket Fuel’s valuation was 7.6 times 2013 revenue.

Thanks in part to the Fed’s low interest rate policies, startups have been able to delay IPOs while receiving repeated rounds of funding from hedge funds, private equity funds, and institutional investors. That means businesses are older when they go public and have longer sales and profit histories, making it easier for investors to value them accurately. Businesses backed by venture capital or private equity firms were 12 years old on average in 2013 when they went public, compared with six years old in 2000 and four years old in 1999, according to Ritter’s research. Twitter was seven years old at its IPO. “You want to make sure you have a company of reasonable scale before you go public, which ensures much more certainty in the planned financial results,” says Doug Leone, a managing partner of venture capital firm Sequoia Capital.

The median annual revenue for companies going public in 2000 was $17 million, compared with $109 million in 2013, adjusted for inflation, Ritter’s data show. And fewer companies are doing IPOs with no profits. Last year 64 percent of all initial offerings were done by profitless companies, compared with 80 percent in 2000, according to Ritter’s data.

The high cost of going public is a hurdle that discourages smaller companies and may lead to a more stable offerings market. The Sarbanes-Oxley Act, passed in 2002, requires extensive financial disclosure, raising the cost spent on auditors and legal work. “There’s just a much higher bar today,” says Ron Codd, a consultant to companies on the IPO track.

Another element missing this time: The boutique banks that underwrote many of the Internet IPOs in the 1990s don’t exist independently today. They were known as the “Four Horsemen”—Hambrecht & Quist, Montgomery Securities, Alex. Brown & Sons, and Robertson Stephens. None remain independent. Technology IPOs today are underwritten by the larger banks, primarily Goldman Sachs (GS) and Morgan Stanley (MS), which tend to decline underwriting IPOs of smaller companies, says Ritter.

While bankers and venture capitalists are confident about today’s IPO market, the shadow of the dot-com bust lingers. “Now in the Valley, the idea of a bubble is a practical conversation,” says Ted Tobiason, who worked at Robertson Stephens beginning in 2000 and now heads equity capital markets for the technology industry at Deutsche Bank (DB). “It’s a healthy discussion, which gets people to think about risk and not just potential upside.”