15 Years!

ChartBuilder

Over the last 15 years, a lot of has happened which has changed our world. But in some aspects, not a lot has changed. We still drive cars and wish about moving around in flying machines. Our food still predominately comes from farms, not an emulator or whatever it is called in the Star Trek world.

Over the last 15 years, the war on terror was started with the 9/11 attack on the Twin Towers of New York City. Barrack Obama was elected as the first black President in American history. China has evolved into a global power while Haiti was struck with a large earthquake and numerous countries situated around the Indian Ocean had to deal with the aftermath of a Tsunami.

Over the last 15 years, same sex marriage became legal in numerous jurisdictions around North America. In terms of science, the phenomenon of global warming was discovered, Dolly the sheep was cloned, and Facebook, YouTube, Myspace, and Twitter were invented[1]. In Canada, BNN (Business News Network) just came on the air.

As some of you may know, the NASDAQ index hit a new record level last week and closed at 5,092.08 on Friday, which is an all-time high. The last time the NASDAQ closed at an all-time high was 15 YEARS AGO![2] In other words, if you were invested in the NASDAQ index over the last 15 years, your only gains were from dividends, which is few and far between in the technology industry. Most technology companies (which NASDAQ index is primarily made up of) primarily invest their profits in innovation for future profits.

The technology area is known for explosive growth and innovative ideas, but relatively no shareholder returns over the last 15 years is something you would expect from a commodity like gold or oil. It seems that the technology area has been a very profitable area from founders and venture capitalists, but not secondary equity holders. Granted, there are a number of technology companies which produced capital gains during the last 15 years, like Apple, but does the whole sector need to be revisited?

How long can technology companies grow without giving strong returns to public shareholders? Will shareholders become pickier where they invest their dollars? Does the technology sector overall deserve the label of being a ‘place to invest’ in the financial world?

What do you think? I would love to hear.

Have an awesome week.

Kevin

Graph Source: http://www.ft.com/cms/s/0/66a5508c-c0f2-11e4-876d-00144feab7de.html#axzz3YMQx9z2u

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

[1] http://www.answers.com/Q/What_important_events_have_happened_in_the_last_15_years

[2] http://www.reuters.com/article/2015/04/23/us-markets-stocks-usa-idUSKBN0NE18520150423

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