x_repost_queue

# US Stock Special: If you traveled back in time to 1987, you probably wouldn’t buy Nasdaq If you traveled back in time to 1987, would you buy the Nasdaq?

2026-07-06·x-repost-20260706-131622

US Stock Special: If you traveled back in time to 1987, you probably wouldn’t buy Nasdaq If you traveled back in time to 1987, would you buy the Nasdaq? You will definitely say: "Of course!" But if you really travel to the past tense without memory, you may not necessarily buy Nasdaq stocks.

## You may not want to buy the Nasdaq that year That year, the Nasdaq was only 374 points, and it had just experienced the "Black Monday" stock market crash of 1987. The Nasdaq was just a little-noticed index, and the heavyweight stocks in it were widely ridiculed as "small company stocks." .

No one could have imagined that nearly 40 years later, the Nasdaq would have crossed 25,000 points. In 1987, the Dow Jones Industrial Average was around 2,700 points, and although it has crossed the 50,000-point mark today, it has just doubled that of the Nasdaq. When we talk about the stage of the U.S.

stock market from 1930 to 1992, we focus on using the Dow as the standard, and rarely talk about the Nasdaq, because before 1992, although the Nasdaq had some technology stocks, Overall it's just a hodgepodge of small companies. How is this feeling different from our current Nasdaq that is booming?

## It starts with the birth of the Nasdaq in 1971 When Nasdaq was founded on February 5, 1971, it was essentially a screen quotation system (NASDAQ = National Association of Securities Dealers Automated Quotations), before Nasdaq came out, there were actually two trading methods running in parallel in the U.S.

stock market: On the New York Stock Exchange, there were "floor auctions + "Expert market making", those who enjoy this treatment are of course the so-called blue chip stocks. The rest, who are not blue-chip and can’t get a job, just hang out in OTC.

In the off-site counter, relying on pink paper quotations (there is still the so-called pink sheet market) and phone matching, Buffett often dug for gold in the early days.

The predecessor of Nasdaq was actually 1938 The NASD (National Association of Securities Dealers), which had been established in 1971, was launched in 1971 just to meet the demand for electronics and connect the transactions that were originally scattered over the OTC counters of more than 500 market makers into a unified system.

At this time, the Nasdaq was only a quotation system and did not match transactions. Transactions still required telephone transactions between market makers.

But at least, the establishment of Nasdaq has allowed OTC stocks, whose prices had previously been scattered and relied on individual phone calls, to have a unified real-time quotation for the first time. Investors can see real-time quotes for 2,500 "non-blue chip" stocks at once, which brings about a significant improvement in liquidity.

It was not until 1982 that the National Market, which means that Nasdaq has a trading function for the first time. So, In the original Nasdaq, 60% of the stocks were small and medium-sized financial, retail, and resource stocks that were "not on the market" and were not the mainstay of technology stocks later. ## How is the “Technology” Index created?

In October 1971, Nasdaq welcomed its first technology stock: Intel. The following year, 1972, AMD was ushered in. At the moment of its IPO, Wall Street did not really regard them as a "possible high-growth industry in the future", but only as: "A small factory on a new track" "A small factory supporting IBM".

Even after Apple's IPO in 1980, the New York Times still had questions: "Is the personal computer a short-lived toy, or can it really become an industry?" In terms of Wall Street's industry characterization, Apple It is placed in the "Consumer Electronics/Education" category, not "Enterprise Computing".

At that time, the "enterprise computing" market belonged to IBM and AT&T, and these two technology blue chips were listed on the Dow Jones Industrial Average. Why did Intel, AMD, and Apple choose to IPO on the then-unknown Nasdaq market? It is necessary to do something, but it cannot be done.

The blue-chip market underwriters and market makers of the New York Stock Exchange require medium and large companies with "stable profitability + sufficient income, and net asset threshold". Intel was engaged in DRAM in its early days. 1971 was the company's first year of profit, with a net profit of only US$1.05 million.

At the time of its IPO in 1980, Apple only sold the Apple II 13 to schools and students. million units, with revenue just over $100 million. In 1981, Microsoft (IPO in 1986) had revenue of only US$16 million and was considered IBM's DOS supplier.

The market believed that "IBM would be in trouble if it changed suppliers." It was obvious that the market did not see the switching barriers and stickiness of software at all. Oracle picked up IBM's omission of not making relational databases in the early days and started to build it, but its revenue at the time of IPO in 1986 was only US$55 million.

Adobe, which was also listed in 1986, was a "small software supplier that makes printers for Apple." The market value of Dell, which IPOed in 1988, was only US$85 million.

Before 1990, if there were technology stocks on Nasdaq, they were a collection of "small companies that had only been in business for ten years, had just exceeded a small target, had unknown and continuous growth, and had 'serious' commercial dependence." Not only did Wall Street think so, even Bill Gates thought "Nasdaq was not qualified" before the IPO in 1986.

, I was still debating whether to work hard and go up to the New York Stock Exchange instead of going to such an "OTC market", but in the end I was persuaded to come back by the underwriters. ## In 1971, the Nasdaq started from 100 points In 1971, the Nasdaq rose from 100 points to 133 points that year. The PE at that time was about 15 times.

Then there was the oil crisis, which dropped to 60 points (this is the lowest point in the history of the Nasdaq), and PE fell to 8 times. Beginning in 1974, the Nasdaq entered a real rise, rising from 60 points to 202 points in 1980, a 3.4-fold increase, while the Dow was flat during this period. During the Great Inflation, the Nasdaq outperformed the Dow.

From 1980 to 1987 before the stock market crash, the Nasdaq rose from 202 points to 456 points, an increase of 126%. During the same period, the Dow rose from around 829 points to 2,747 points, an increase of 231%. When the real economy was substantially driven, the Dow outperformed the Nasdaq.

In general, from its inception in 1871 to before the stock market crash in 1987, the Dow and Nasdaq were basically tied. Before the stock market crash in 1987, the PE of the Nasdaq was only about 18 times. The U.S.

market does not give the Nasdaq a "heavenly" valuation just because the companies are small and have "high growth" , in the 16 years from 1971 to before the stock market crash in 1987, the valuation of the Nasdaq went back and forth between 8 times and 18 times. It is basically difficult to say that it has reached bubble level.

Since the mid-1980s, a group of "decent" technology stocks such as Apple, Oracle, Dell, SUN and other companies have successively listed on Nasdaq. At this point, the Nasdaq bull market has really begun.

Full text

# US Stock Special: If you traveled back in time to 1987, you probably wouldn’t buy Nasdaq If you traveled back in time to 1987, would you buy the Nasdaq?

# US Stock Special: If you traveled back in time to 1987, you probably wouldn’t buy Nasdaq If you traveled back in time to 1987, would you buy the Nasdaq? You will definitely say: "Of course!" But if you really travel to the past tense without memory, you may not necessarily buy Nasdaq stocks. ## You may not want to buy the Nasdaq that year That year, the Nasdaq was only 374 points, and it had just experienced the "Black Monday" stock market crash of 1987. The Nasdaq was just a little-noticed index, and the heavyweight stocks in it were widely ridiculed as "small company stocks." . No one could have imagined that nearly 40 years later, the Nasdaq would have crossed 25,000 points. In 1987, the Dow Jones Industrial Average was around 2,700 points, and although it has crossed the 50,000-point mark today, it has just doubled that of the Nasdaq. When we talk about the stage of the U.S. stock market from 1930 to 1992, we focus on using the Dow as the standard, and rarely talk about the Nasdaq, because before 1992, although the Nasdaq had some technology stocks, Overall it's just a hodgepodge of small companies. How is this feeling different from our current Nasdaq that is booming? ## It starts with the birth of the Nasdaq in 1971 When Nasdaq was founded on February 5, 1971, it was essentially a screen quotation system (NASDAQ = National Association of Securities Dealers Automated Quotations), before Nasdaq came out, there were actually two trading methods running in parallel in the U.S. stock market: On the New York Stock Exchange, there were "floor auctions + "Expert market making", those who enjoy this treatment are of course the so-called blue chip stocks. The rest, who are not blue-chip and can’t get a job, just hang out in OTC. In the off-site counter, relying on pink paper quotations (there is still the so-called pink sheet market) and phone matching, Buffett often dug for gold in the early days. The predecessor of Nasdaq was actually 1938 The NASD (National Association of Securities Dealers), which had been established in 1971, was launched in 1971 just to meet the demand for electronics and connect the transactions that were originally scattered over the OTC counters of more than 500 market makers into a unified system. At this time, the Nasdaq was only a quotation system and did not match transactions. Transactions still required telephone transactions between market makers. But at least, the establishment of Nasdaq has allowed OTC stocks, whose prices had previously been scattered and relied on individual phone calls, to have a unified real-time quotation for the first time. Investors can see real-time quotes for 2,500 "non-blue chip" stocks at once, which brings about a significant improvement in liquidity. It was not until 1982 that the National Market, which means that Nasdaq has a trading function for the first time. So, In the original Nasdaq, 60% of the stocks were small and medium-sized financial, retail, and resource stocks that were "not on the market" and were not the mainstay of technology stocks later. ## How is the “Technology” Index created? In October 1971, Nasdaq welcomed its first technology stock: Intel. The following year, 1972, AMD was ushered in. At the moment of its IPO, Wall Street did not really regard them as a "possible high-growth industry in the future", but only as: "A small factory on a new track" "A small factory supporting IBM". Even after Apple's IPO in 1980, the New York Times still had questions: "Is the personal computer a short-lived toy, or can it really become an industry?" In terms of Wall Street's industry characterization, Apple It is placed in the "Consumer Electronics/Education" category, not "Enterprise Computing". At that time, the "enterprise computing" market belonged to IBM and AT&T, and these two technology blue chips were listed on the Dow Jones Industrial Average. Why did Intel, AMD, and Apple choose to IPO on the then-unknown Nasdaq market? It is necessary to do something, but it cannot be done. The blue-chip market underwriters and market makers of the New York Stock Exchange require medium and large companies with "stable profitability + sufficient income, and net asset threshold". Intel was engaged in DRAM in its early days. 1971 was the company's first year of profit, with a net profit of only US$1.05 million. At the time of its IPO in 1980, Apple only sold the Apple II 13 to schools and students. million units, with revenue just over $100 million. In 1981, Microsoft (IPO in 1986) had revenue of only US$16 million and was considered IBM's DOS supplier. The market believed that "IBM would be in trouble if it changed suppliers." It was obvious that the market did not see the switching barriers and stickiness of software at all. Oracle picked up IBM's omission of not making relational databases in the early days and started to build it, but its revenue at the time of IPO in 1986 was only US$55 million. Adobe, which was also listed in 1986, was a "small software supplier that makes printers for Apple." The market value of Dell, which IPOed in 1988, was only US$85 million. Before 1990, if there were technology stocks on Nasdaq, they were a collection of "small companies that had only been in business for ten years, had just exceeded a small target, had unknown and continuous growth, and had 'serious' commercial dependence." Not only did Wall Street think so, even Bill Gates thought "Nasdaq was not qualified" before the IPO in 1986. , I was still debating whether to work hard and go up to the New York Stock Exchange instead of going to such an "OTC market", but in the end I was persuaded to come back by the underwriters. ## In 1971, the Nasdaq started from 100 points In 1971, the Nasdaq rose from 100 points to 133 points that year. The PE at that time was about 15 times. Then there was the oil crisis, which dropped to 60 points (this is the lowest point in the history of the Nasdaq), and PE fell to 8 times. Beginning in 1974, the Nasdaq entered a real rise, rising from 60 points to 202 points in 1980, a 3.4-fold increase, while the Dow was flat during this period. During the Great Inflation, the Nasdaq outperformed the Dow. From 1980 to 1987 before the stock market crash, the Nasdaq rose from 202 points to 456 points, an increase of 126%. During the same period, the Dow rose from around 829 points to 2,747 points, an increase of 231%. When the real economy was substantially driven, the Dow outperformed the Nasdaq. In general, from its inception in 1871 to before the stock market crash in 1987, the Dow and Nasdaq were basically tied. Before the stock market crash in 1987, the PE of the Nasdaq was only about 18 times. The U.S. market does not give the Nasdaq a "heavenly" valuation just because the companies are small and have "high growth" , in the 16 years from 1971 to before the stock market crash in 1987, the valuation of the Nasdaq went back and forth between 8 times and 18 times. It is basically difficult to say that it has reached bubble level. Since the mid-1980s, a group of "decent" technology stocks such as Apple, Oracle, Dell, SUN and other companies have successively listed on Nasdaq. At this point, the Nasdaq bull market has really begun.

← Back to archive