ACQ2 by Acquired Comparing the Dotcom Crash to Today (with Tom Cowan from TDM)
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Jun 20, 2023 Tom Cowan, co-founder of TDM Growth Partners, shares insights from an investment firm that boasts a remarkable 26% annual return over 18 years. He discusses historical comparisons between the dot-com crash and today's market, emphasizing how high-growth companies behave during downturns. Cowan highlights the importance of emotional discipline and sound valuations for investors. He also reflects on how flexibility and a long-term investment philosophy are essential in navigating today's market uncertainties.
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High Growth Volatility
- High-growth businesses outperform in bull markets, but fall hardest in market resets.
- Their immaturity and unclear competitive advantages contribute to this volatility.
Market Reset History
- The past 20 years have seen three major market resets: the dot-com bust, the GFC, and the post-COVID period.
- Several smaller corrections, like the 2016 tech meltdown, also occurred.
Current Downturn Impact
- Unlike the dot-com and GFC crashes where broad indexes fell over 50%, this time they only fell 25-36%.
- High-growth tech stocks were hit hardest, falling 65%, similar to the dot-com bust.