Party Like It's 1998

It's been an extraordinary month for the stock market. Just weeks ago the mood was dark — a wider Middle East war looked not just possible but probable. As those fears have receded, the market has exploded higher in a V-shaped recovery. Yes, the indexes are extended in the short term, but the data suggests forward returns over the next year are looking promising.

Recent action reminds me of the setup coming out of the 1998 bear market — not a perfect analogy, but a compelling one. That year, the Nasdaq rallied sharply off a brutal washout low, SOX was ripping, and the Net New Highs-New Lows confirmed the move with a breadth thrust that historically signals durable recoveries. We're seeing the same sequence now. The key difference is magnitude: 1998 was a far more violent shakeout, a true −29% crash driven by the LTCM crisis. Our current correction was painful but shallower. In some ways, that makes the signal cleaner — less damage to repair.

The 1998 parallel also makes intuitive sense on a deeper level. The closest historical precedent to what AI is doing to the economy today is what the internet did in the late 1990s. Both are genuine technological step-changes that justify real multiple expansion, even if valuations can run ahead of themselves. With the Nasdaq printing new highs and semiconductors like ARM and AMD breaking out, the market appears to have made a decisive verdict: the dominant narrative is no longer war in the Middle East — it's the buildout of AI infrastructure. The geopolitical fear trade is out; the technology growth trade is back in. If this continues, we may soon find ourselves partying like it's 1999.

Risk right. Sit tight.

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