Canaries In The Coal Mine, Part 1: Tech High-Flyers Fall To Earth

By: John Rubino | Mon, May 11, 2015
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While the "stock market" continues to flirt with new records, there's turmoil under the surface. High-flying social media companies Twitter and LinkedIn fell hard in late April, and now recent IPO Etsy, an online marketplace for arts and crafts, is down 50% since going public (8% of that today).

Twitter, LinkedIn and Etsy chart

Bull markets don't end all at once. Generally a few egregiously-overvalued sectors blow up first and are dismissed by most observers as aberrations. Instead, they turn out to be a sign of things to come.

In the previous decade's bubble it was subprime housing that led the way, while being initially characterized by experts as too small to matter. Click here for Ben Bernanke's ongoing attempts to convince the world to relax and ignore housing's problems.

This time around we of course won't know until after the fact which sector is the canary in the coal mine. But these epic fails in the bubbly social media/online marketplace region of tech certainly look like viable candidates.

So...why these companies at this time?

So that's the tech tank story. Now we'll see whether it becomes the story of the market in general.

 


 

John Rubino

Author: John Rubino

John Rubino
DollarCollapse.com

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners in the Green Tech Boom, The Collapse of the Dollar and How to Profit From It, and How to Profit from the Coming Real Estate Bust. After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a currency trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He now writes for CFA Magazine.

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