Nvidia Vs. Cisco Bubble Comparison

Hey everyone and thanks for jumping back Into the equity verse today we're going To be comparing Nvidia in this cycle to Cisco in the cycle going into the year 2000 the reason we're doing this is Because it seems like it is a very Popular comparison and so what I want to Do is go through and see just how Similar and dissimilar they are by Looking at various metrics if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up and check out the sale on intothe Cryptoverse premium at intothe Cryptoverse Docomo but I do want to go into some of The uh into the equity verse for a Little bit especially given this move by Nvidia and what I'm going to do in this Video is we are going to look at the Price the price chart some we're also Going to go through a lot of fundamental Metrics tricks that can be used to try To evaluate a a a certain company all Right so the first thing we can do is Over on the into the cryptoverse website We actually do have an equity Tab and One of the cool things about it is we Can filter all of these charts such that The only charts that come up when we Click on them are of the asset that We're interested in so for instance if We are interested in in video We can simply click on Nvidia and then

When we go to one of these charts let's Say we want to look at the price to Earnings ratio we click on it and Therefore it pulls it up for NVIDIA and I'm going to do the same thing over here But I'm going to pull up Cisco and we're going to go through a Lot of these charts to just see how Closely or how close the the the the Move is from from that cycle to this Cycle and and how different okay so the First thing we could look at is the Price to earnings ratio which we're Going to go be going through a lot of Different metrics in this video and so I Don't really want to um explain every Single one but I will at least try to Scroll down so that you guys can see the Description and see the usage of it if You want to actually you know follow Along more closely with with what it is We're talking about but just briefly the Price to earnings ratio is just a metric To evaluate sort of the price of the Stock relative to its uh trailing 12 Months of earnings so what you'll notice Is that Cisco in the do era went to a Price to earnings ratio of 96.7 4 following that it then fell all The way back down to a price to earnings Ratio of six but note that it took 12 Years To get back down to that valuation and It also took almost 3 years maybe two

And a half years or so to get back to uh A a price to earnings ratio of Approximately 16 um so it took quite a Long period of time and if we go look at What it looks like for NVIDIA we can see That first of all there was a massive Spike over there but if we look at What's going on right now we can see That back in a you know the last couple Of the last few quarters we we actually Did reach a price to earnings ratio of 90 again Cisco went all the way up to 96 96.7 4 then after going up to around the '90s The price to earnings ratio of Nvidia Fell to about 47 and then now it went Just went back up to around 78.7 in January and what we have here is Sort of the forward guidance sort of Like the the sort of the projections but Of course these where it changes color Over here this is not set in stone and Obviously that is subject to change so We can at least see that they have gone To similar valuations in terms of the Price to earnings but we also know that Cisco went to a higher price to earnings Than Nvidia went so far in this Parabolic rally so that's one thing that We can look at now here's an interesting One to look at this is the price to book Look ratio right and as I said I'm just Going to scroll down so that you can see The description you can see the usage

But I'm not going to go through the Whole thing just pause the video and Then you can read how this is you know How this is relevant but just a quick Tidbit the the way the reason we use the Price to book is because it it Essentially tells us if the stock price Is trading in line with the book value Of the company so if it's um you know Like so basically if it's near I think a Value of one um then then it would Arguably be that it's sort of fairly Priced right I mean it says it right Here right a p pb ratio of one means That the stock is trading in line with The book value of the company so for NVIDIA The Price to Book ratio is Currently 30.571060 42.461800 All the way back over here in April of 2000 now what's interesting is after Nvidia sorry after Cisco went to a price Tobook ratio of 18 and it seemed like it Was never going to come back down again You can see that actually 12 years later The Price to Book ratio was all the way Back down to around one so what I'm what I'm sort of suggesting here is that While we could eventually see the Nvidia Price tobook ratio back near one I mean It it could frankly take a decade to get There um you can see that after the After the bubbles popped the price to Book ratio went all the way back down to

Around 1.96 so it got down to around two And from that level that's where the Stock price ultimately bought while The Price to Book ratio went lower later on The stock price actually bottomed when The Price to Book ratio went to Approximately two again right now Nvidia Is all the way up here in the 30s and 40s but you can see that about in fact a Decade ago it was around one and so I Think the dangerous part of these Rallies by Nvidia is that no one is Denying I mean I don't think anyone's Denying that the that it's been Impressive no one's saying you know Trying to well I'm sure some people are Trying to call the top but it's Impossible right like it's absolutely Impossible to call the top on something Like that and and when Cisco finally Topped in the dot era it topped I Believe on relatively good numbers it's Just that a lot of it you know a lot of The the things that it offered ended up Being Commoditized and and the price Eventually fell in line with what Ultimately a fair value would be but in The time you can certainly get swept Away right and and and what's ultimately Going on and and also we know that they Can last for a long time if you look at The rally by Cisco I mean this rally Really started in like 1990 and it

Didn't finalized until a decade later if You look at Nvidia we could argue that This rally started basically in 2013 and now we're you know we're a Little over a decade later and so it Seems like there's there's something Similar setting up here but it's Absolutely impossible to predict exactly How high Nvidia will go we could also go Look at some other metrics so we've Looked at the price to earnings we've Looked at Price to Book now why don't we Look at price to sales okay so now we're Going to look at the price to sales Ratio of Nvidia and then we're going to Compare it to T Cisco so as always going To scroll down so that you can see what The description is and look at the usage In general a high price sale ratio Suggests that a company is overvalued in The market so if it's greater than one It suggest that it's overvalued and and I imagine um you know most of these are Going to be well above um or this is Going to be well above that level when We look at it so price to sales ratio of Cisco in the com era went all the way up To 20.98 and then cratered all the way back Down to when it hit the low it went all The way back down to a little less than Three now the price to sales ratio of Invidia is current it just went to 35.643953 assumed that this peak over

Here was the top because it went to 26 Which is actually higher than Cisco went Back during theom crash that's why it's Useful to use a lot of different metrics And not just a single one but ultimately Cooler heads prevailed and eventually it Came back down to earth even though it Took a long time to do so right there's A lot of people that keep calling the Top on Nvidia right and I mean from a Sort of like from a a rational point of View we can look at the earnings and see That they look abs absolutely Spectacular um the problem is that there Will be competition and and the margins Will likely be compressed over a long Enough period of time and so while I'm Not doubting the long longevity of the Company as a whole it's just saying look Like it we we know we're in a bubble and And just like Cisco was in a bubble and Even though Cisco was in a bubble it Still it had a crash and then it still Just continued on right I mean it still Is on a general upward trajectory a lot Of people you know maybe talk about it In a negative way because it hasn't Really taken out the highs from you know Two decades ago but the reality is is if You just ignore that bubble phase that Irrational phase and you just sort of Draw a line through here it's been on a Steady incline for a long time and so While eventually Nvidia could do

Something similar and meet the same fate It doesn't mean that it won't continue To grow it just means that at some point You likely will have a larger correction And then from that level we will get Back to to more realistic valuations I Think a lot of times it's easy to get Carried away in the in sort of the Bubble Mania and assume that it'll never Go down and the reason is because it can Last for years before it before it Changes but it is something it's Worthwhile to at least take a step back And look at this stuff and say hey we've Seen this stuff before um we know it can Go on longer than most people think it Can eventually it'll probably come back Down to earth it's really hard to to Know exactly when that will will be um There's also other things could look at As well uh we could look at like the Running Roi of Cisco this is the One-year Roi and we can see that it Basically just was hovering here around 2 to 3 for a long time and then Eventually it collapsed so let's go look At the same thing for envidia and see Where it is you can see it's also Hovering between 2 to 3 for a long Period of time and so again it's another Similarity um that eventually we likely See something that looks like this right But the timing of that is is going to be Very very difficult and I'm sure a lot

Of people are trying to time it and they Just keep getting stopped out okay so You have to be careful you know trying To time the crash with this stuff is is Incredibly difficult to do I certainly Can't do it um and I I think what it's Better used for is just looking at it as A signal okay you're looking at Nvidia As a potential signal for you know for Other aspects of the Market so that's that's that metric um We could look at you know I mean we Could look at say the year-to-date Roi Of Cisco and and maybe look at at what It did in 1999 and see that it went up 2.25x and then perhaps we'll do the same Thing for um Nvidia and see what did it Do in 2023 it went up over 3x and what Did Nvidia do in 2022 right you can see That it actually had a bare market and If you look at 1998 for Cisco there was also a bare Market Somewhere in there now if we go look at The price chart for Cisco what you will See is that if this is to be the 19 so This is sort of that 1998 bar Market Where Cisco dropped what's fascinating Is after that drop from that low it then Rallied 683 per. but what we're going to do is Is look at this in a monthly because I Want to show you Something what's what's more interesting

Is that from the 1998 low from October Of 1998 it Rallied and I'm going to I'm going to Try to get this as exact as I can so Just bear with me for a Moment it rallied over the Course Of 17 Months and It ultimately went up about 700% so a 600 96% rally give or take a Few percent right what's a few perc Among friends over the course of 17 Months or about 57 days okay so that's From that 1998 bare market now Nvidia has done something some somewhat Similar in that we had this bare Market Over here in 2022 which also happened to End in October right just like the one For for Cisco did it ended in October of The midterm year nvidia's bare Market Over here ended in October of the Midterm year and we know that Cisco went Up almost 700% over the following 17 months and Then if you go look at Nvidia here and I'm going to switch this over to a Monthly time frame just like we did with With um with Cisco from this Low you can see that it's been so far I Mean just at this point it's been 16 Months and Nvidia has gone up 605 per. so

Again Cisco went up 700% over 17 Months Nvidia is up 600% over 16 months We know that Cisco topped out in March Right it topped out in March and what Was interesting about when it topped out Was that it happened to Correspond right it happened to Correspond to the unemployment rate at a Being at a really low level and that's The thing that I I I I frequently come Back to and I I I see a lot of people Say you know how can how can this stuff Ever come down when the unemployment Rate is is so Low when the market it reaches a point Where it seems like you know if it Reaches a point where it seems like There's no way that things could get any Better that's ultimately what marks the Top because you know the the the Reference point is going to be Constantly something that is going to Continue like it's going to be hard to Continue that growth if the market Starts to think all right well as we get Further out the unemployment rate will Go up you know so 700% over 17 months Nvidia is currently up 600% over 16 Months to give you an idea of what a 700% rally from the low would look like Over 17 months it would mean Nvidia Going all the way up and I'm going to

Get it actually the same number 696 per. Um that would be between 8 to 900 what's Actually fascinating is that the low That Cisco put in during the during the The midterm year in 1998 what you'll see here is that it was Around 10 and Nvidia the low was around 100 so basically it's just a 10x Difference in the price right so Cisco Bottomed at around 10 Nvidia bottomed at 100 and then Cisco ultimately Topped at 82 right and Nvidia is currently at 780 So I know there's a lot of people Calling for NVIDIA to go to 1,000 or 1100 I think 1100 seems to be a number That a lot of people have in mind I do Wonder um if it'll make it there it Certainly could I'm certainly not going To try to stand in the way of it I you Know these bubbles that that occur There's really no sense in in trying to To to try to time the exact top but with That said it is interesting that if it Were to repeat what Cisco did it means That it wouldn't actually make it all The way to a th000 and so perhaps There's a lot of people out there Waiting for it to reach 1,000 or 1100 to Finally sell but then it actually Doesn't reach that that Milestone Leaving a lot of people holding the bag Right now again I don't know if it's Going to reach that level or not I want

To be clear it it certainly could reach It but I also have to imagine that with Cisco there were probably a lot of People waiting for it to hit a 100 to to Cash in on that sweet sweet 10x move off The lows and then ultimately it didn't Do that and then after that top it then Proceeded to dump About 90% over the next 31 months um and So I think that is is is something that You know it's worthwhile to remember That that could theoretically happen now It could also happen on a different time Scale right like Nvidia topped out or Sorry Cisco topped out in March that Doesn't mean that Nvidia has to top out In March I just find it interesting that It seems like it's following a very Similar tune right and Nvidia this month Is up about 27% or so um I mean you can See that as Cisco was reaching these Highs it was going up about 20% a month Right I mean this is 20% 20% and then a Red month or no slightly up um but then 20% and then 17% right Nvidia has been Doing something very similar where it's Got you know 15% 6% 24% 27% it's it's Making a similar type of move off of That you know off of that sort of that Intermediate consolidation area um so That's an interesting you know Interesting way to look at at the market And then also I there's a lot of other Things that we could look at um this one

Might be an interesting one the days Since we've had a certain percentage Decline with Nvidia and I'm going to Pull up the same thing uh for Cisco so let's look at oh that's that's The gain I want to look at at Decline so if you look At Nvidia here we can see that it's been About 538 days since it had a 30% Drop right if you look at Cisco back Over Here what's fascinating is that it Reached 574 days before it had a 30% Drop which is about two more months from Now it's fascinating how similar it is Right in in in in this way um that it's About the same amount of time and and And and that this High here on time from A 30% drop to another one was about the Same and if you go look at Nvidia it Seems like we're you know we're getting Up you know fairly close to where this One went this one went all the way up to 674 days we're currently at 538 so that Would imply a few more months um Potentially now if you look at Cisco Really closely on a week weekly time Frame in order to understand how the Actual Market structure played out after Cisco put in its final high in the 80 Range it then had a pullback down to That Wick right there which happened to Correspond to 50

50 why is that interesting why is 50 Interesting well we talked about how it Seems like it's like a 10x move Difference if you go look at Nvidia the similar spot would be 500 and The reason why 500 is interesting is Because that's exactly where it found Resistance for a while so what happens If Invidia reaches some type of blowoff Top up in here right it goes up in here Reaches a blowoff top and then comes Back down and maybe doesn't take that Long but like you know comes back Down Peaks up here somewhere right comes Back down to around the 500 range that's Basically what Cisco did right it came Back down to to around $50 50 $50 a Share it then had a dead cap bounce back Up to $70 per Share and then it finally rolled over And and the market collapsed so looking At Nvidia if it were to do something Similar it would mean you know topping Out sometime in the next few months I Don't know exactly when I don't know Exactly what price eventually coming Back down to 500 finding some support Around that $500 range bouncing back up To 700 um and then and then rolling over And going back to more reasonable Valuations right again doesn't mean that Nvidia won't be successful it probably Will be it's just that eventually

Eventually there has to be some type of Larger cooldown period I would I would Imagine um I I I guess if you were to Look at the the monthly RSI uh you can See where Nvidia is and I'd like to at Least look to see where it it was for uh Cisco way back in the day to see if it Was doing anything remotely similar and I mean you can see that it was I mean Basically it was just hanging out at at At relatively High monthly RSI Valuations and then it actually Ultimately topped out at a monthly RSI Of 93 uh Nvidia RSI on the monthly right Now is currently 82 um the highest it's Gone I mean it's already gone higher Than Cisco went because it went up to 95 Over here in fact it almost looks like It's been putting in lower highs on on The monthly RSI for for quite a while But that's another interesting way I Think to to to look at at Cisco versus Nvidia and then there's perhaps some More charts that we could look at um There is of course the short-term bubble Risk which is essentially just the Extension from the 20we moving average Uh we're going to pull this up for both Cisco and Nvidia so we can see that Cisco uh way back in the day Basically reached a short-term bubble Risk level of up here you know 1.5 or so Maybe a little bit higher around 1.5 um Nvidia is currently sitting at 1.3 so

It's getting extended in order to reach 1.5 it would need to be 50% above its bull market sport pan or 50% above its 20we moving average and 50% above the 20we SMA right now would Actually put it At just over 800 note though that the 20we SMA is moving up relatively quickly So if we were to extend the 20we Estimate out into March um and and take Say like a 50% move from that level then It would correspond To 8.89 889 and remember Cisco Ultimately topped Out here at 82 so very similar Moves In in some Regards um different in others it's not Like every metric we've looked at has Been the same um you know the price to Earnings and and and that sort of stuff Has had some Differences so I think that's in in you Know that's at least somewhat important To Um to keep in mind and I don't know if There are any other charts the great Thing about and again I don't I don't Talk about it a whole lot but the great Thing about this website is that I know It's caught into the cryptoverse uh but We've got a lot of stuff I mean this is Also for equities so if you want to do The same type of analysis for a ton of Different stocks you can do it right you

Can just go to the the asset filter the Equity asset filter scroll down to all These different equities I mean look We're still in the A's at this point as I scroll down um there's there's just so Many of them uh that you know I mean It's now we just got to the bees right And so you can you can basically go do That and if you do that it'll it'll pull Up all the charts that we have for that Asset and then when you click on that Chart it'll automatically pre load that Asset and if you don't want to switch Over from one tab to another for Instance if you want to look at you know Company assets this is company assets For NVIDIA and instead of switching from One tab to another you could also just Come in here and say all right now I Want to look at it for meta what are you Know what does this look like for meta What does it look like for Google um and So on and so forth right what does their Debt look like what does the debt look Like for NVIDIA right now what is the Debt look like for Microsoft so that might be an Interesting way way um to to navigate The equity markets by looking at at a Lot of those charts and just kind of Seeing if there is a bubble how far Could it theoretically extend um or or How far could it not you know I've been Involved in several of these bubble

Phases um not only this one that we find Ourselves in but also others and and What tends to happen is that a lot of People who are a lot more Conservative uh you know tend to call For these pullbacks because that's what Normally happens in in normal times Right you get you'll get moves higher And then you'll get a pullback right Like look at look at the price chart of Microsoft right you'll get a p you'll Get a move higher you'll get a pullback Right and so then when you go into these Bubble phases a lot of people like What'll happen is that the you know Everyone's so used to getting those Pullbacks that when it doesn't happen Those people get mocked right they get Made fun of because they're like oh you Were bearish you were calling for a a Pullback and it and it didn't get it I'm Not calling for really anything with Nvidia I'm not an expert on Nvidia at All but there are a lot of people out There that that have you know tried um Navigating Nvidia and I think from most Rational perspectives it is due for a Pullback at some point but remember the Market can can stay irrational much Longer than most people can stay solid Okay you know looking at at the chart of Cisco I have to imagine that everyone That was calling for pullbacks Throughout this entire phase was mocked

And ridiculed and then eventually after All those people got completely washed Out of the market right then it the Collapse Began but for a long time it made those People look absolutely ridiculous Because I'm sure they tried to call the Top every step of the way and and they Just ended up being incredibly Unsuccessful at doing So eventually they Were right right in terms of hey like it Makes sense to get a pullback and that's What is likely happening now out with With Nvidia right like it can climb that Wall of worry um until we see some type Of larger macroeconomic headwind for Instance the labor market or something Uh starting to show weakness but it's Hard to know exactly the time frame on Something like that and and so what ends Up happening is that a lot of people They they they look at the chart and They're like you know how do you look at This chart right it for me when I look At a chart like this um the first thing I do is I just sort of admire it and Think about like how crazy of a chart That is to look at and then I think like There's just there's probably some People out there that have never bought Nvidia in their life and they're Deciding to do it for the first time Right here right and in the short term What happens is people by these

Parabolic rallies they get rewarded and So they sort of incentivize to continue To do it and then eventually when a Pullback happens it can be very Fierce And quick and and and leave people um Not really knowing what happened right I Mean this you know once Cisco find got a Drop that started in March it dropped You know 40% over two months right Nvidia as we showed earlier Nvidia Hasn't even had a 30% correction in over A year and a Half So if Nvidia starts to Falter that could be signaling faltering In other aspects of the market the Reason why I say that is because what Happens during business these these Cycles right what happens when we're in Higher rates and and whatnot is that These companies they and and why don't We overlay us interest rates onto the Chart you know what happens is these Companies that as you get into Tighter And Tighter monetary policy these Companies they basically absorb all this Liquidity because no one knows who's Going to survive the you know a Potential recession no one knows who's Going to be able to survive it and so They just pile into the stuff that keeps On doing well keeps on having this great Cash flow making a lot of money Because they say you know what even if

Even if um even if there's a recession So what right the company will probably Survive because they have all this cash Um and that's why I think a lot of People pile into these other names uh It's the same thing with like the Magnificent 7 some of those from the Magnificent 7 have started to fall off Right like some of them are not uh doing As well and so after all of them have Finally stopped performing um that's When sort of the larger turn comes and That is is where the uh sort of the Lower market cap stuff goes down with The higher market cap stuff but it Doesn't go down as much as the higher Market cap stuff because the lower Market cap stuff got sold off already Because no one wanted to buy it because No one knew which ones were going to Survive when you get back to loer Monetary policy they're like oh that Might that company survives let me throw My money into that and that's often why Like things like the Russell will Finally start to outperform um you know Like if you look at the Russell divided By the S&P 500 what you'll see Is that it it just continues to drop Right it just continues to drop but look At where the Russell finally started to Outperform the the S&P last cycle it Didn't even start until May of 1999 but You can see that there was a lot of

Consolidation into only a few names back Then right only a few names and and then Eventually we had a big bounce to turn Back the other way now right now the Current valuations that we've gone to Are very similar to where we were back In 1990 I don't know if we're going to Make it all the way down here or not This is where the era took us um if we Were to make it down there it would Imply the Russell bleeding to the S&P Another 22% but maybe we just bounce at The current levels right maybe the Russell goes down a little bit more um And then bounces I it's really hard to Say but that is something that is at Least worth I think uh I think keeping In mind is that you know these the Russell has and maybe maybe we actually Should compare it to the na over the S&P If you look at like the Russell against The NASDAQ I mean it's already below Everywhere at the levels Right it's actually below it which is Kind of scary to think about in some Ways um in other ways it's not that Scary uh maybe it's not maybe scary is Not the right word in other ways it Makes sense because you know the Companies that are successful in the Russell uh ultimately get kicked out of The Russell right um if if you're Successful in the NASDAQ you don't get Kicked out it's the unsuccessful

Companies that get kicked out so it Makes sense that over a long period of Time the Russell would bleed uh to the NASDAQ which is essentially exactly what Has happened um how much further down Will it go I don't know uh but it has You know it's continuing to to to slowly Push a little bit lower uh you know one Month at a time so that is the Comparison that we've made between Cisco And the dot era and Nvidia this cycle Hopefully you find it useful again if You want to perform similar types of Analysis check out the sales on intothe Cryptoverse decom you can just simply go Over to the charts tab click on equities You can also do the same thing with Crypto you know if there's some random Altcoin that I never talk about that you Want to go investigate we got hundreds On here and if you click on one let's Say for whatever uh let's say you want To you want to check out ethereum it'll Then pull up all these charts that we Have on on ethereum right you can look At the running one day Roi sorry the Running 365 day Roi of e so I think it's A great tool uh to n to navigate the Markets with you know I'm only one Person I can't possibly cover the Thousands of different equities on this On this website the hundreds of Different cryptocurrencies and the Hundreds of macro charts that we have

But if you have a lot of free time and You're a you know and you like to invest I think this website does give you a lot Of tools that you can use to to navigate Those assets that you're interested in Right even though I might not talk about Them it doesn't that we don't have the Tools over here that you could use to Access um the charts for that asset so Just know that that is there it is part Of into the cryptoverse premium links in The description below make sure you guys Check it out subscribe if you're not Subscribed give the video a thumbs up And I'll see you guys next time bye