1970 | Tech Crash

In the so-called, almost forgotten, tech crash of 1970, the S&P 500 Index fell a total of 36.1% from its high of 108.37 points reached on 29 November 1968 to a low of 69.29 points by 26 May.

Development of the S&P 500 from July 1967 to December 1972

Progression of the crisis

29. November 1968

S&P 500 Höchststand bei 108,37 Punkten.

26. Mai 1970

S&P 500 Tiefststand bei 69,29 Punkten.

4. Mai 1967

Vollständige Erholung des S&P 500.

Causes

A period of excessive euphoria, preceding most crashes and in this case spurred by the first moon flights of the Apollo missions, sent share prices soaring to extreme heights.

However, despite the boom in the technology and computer industries, there was an extreme crash in share prices. The main cause of the crash, just like the bursting of the dotcom bubble in 2000, was low or no corporate profits. The average price-earnings ratio of technology stocks in 1968 was 114. Computer manufacturers were trading at 103 times their earnings. By comparison, stocks in the Dow Jones Index had an average P/E ratio of 16 in the peak year of 1968.

IBM, for example, could not meet the growing demand for its new System 370. The distribution system of bundling hardware and software was questioned by the Department of Justice and resulted in a 13-year-old lawsuit, the substance of which was eventually overtaken by developments in the industry and eventually shelved.

Comparison previous year / crisis year

7 Medium-term fractal indicators - 1969

7 Medium-term fractal indicators - 1970

Chart legend for the seven medium-term fractal indicators
Bull and Bear

Devaluation is the reduction of the nominal exchange rate of one’s own currency against foreign currencies when quoted in quantity. The opposite is revaluation.

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Legal Notice

Amend Finance

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Responsible for content according to § 55 para. 2 RStV:

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CH-6315 Morgarten

Email: ud******@*mx.de

Disclaimer:

Liability for content

The content of our pages was created with the greatest care. However, we cannot accept any liability for the accuracy, completeness and timeliness of the content. As a service provider, we are responsible for our own content on these pages in accordance with § 7 para. 1 DDG. However, according to §§ 8 to 10 DDG, as a service provider, we are not obliged to monitor submitted or stored third-party information or to search for circumstances that indicate illegal activity. Obligations to remove or block the use of information in accordance with general laws remain unaffected. In this case, liability is only possible at the time of knowledge about a specific violation of law. If we become aware of any such violations of law, we will remove this content immediately.

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The content and works on these pages created by the site operators are subject to German copyright law. Duplication, processing, distribution and any type of exploitation outside the limits of copyright law require the written consent of the respective author or creator. Downloads and copies of this page are only permitted for private, non-commercial use. Insofar as the content on this page was not created by the operator, the copyrights of third parties are observed. In particular, third-party content is marked as such. Should you nevertheless become aware of a copyright infringement, we ask you to inform us accordingly. If we become aware of any infringements, we will remove such content immediately.

 

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