In year-span 2004-2006 NASDAQ was up 23% while:
S&P 500 was up 35%, Europe up 65%, Japan up 45%, emerging markets up 100%.
So NASDAQ really underperformed.
At the same time NASDAQ companies have grown well and fast and have managed to build up large amounts of cash. If you look at the cash companies like Microsoft, Google or Ebay hold you will be pleased (if you hold their stock). I read somewhere that about 26% of the assets of tech companies is pure, green and lovely cash. If you compare that figure to S&P 500 companies’ 8%, you’ll see what I mean.
Now I am convinced the NASDAQ is undervalued. What should I do?
I may want to buy a NASDAQ ETF. They are cool because they are full of Qs and because they charge very low commissions:
NASDAQ 100 Trust Shares (ETF) (Public, NASDAQ:QQQQ) charges yearly commissions under 0.2 %, which would mean something around 2% in 10 years.
But then there is the problem of the overlap. One investment rule is not to overlap. I own several (good) and large Nasdaq stocks so buying that ETF would overlap my investment. I think the best to do is to find the largest holdings of the ETF and see if I am interested in buying some of them which I still don’t have:
| Microsoft Corp | 6.70% | |
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| Apple Inc | 6.55% | |
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| Qualcomm Inc | 5.18% | |
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| Google Inc | 3.83% | |
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| Cisco Systems Inc | 3.59% | |
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| Intel Corp | 2.97% | |
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| Amgen Inc | 2.79% | |
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| Oracle Corp | 2.77% | |
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| Starbucks Corp | 2.56% | |
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| Comcast Corp | 2.52% | |
I have Microsoft, Google, Intel and Comcast. So if I buy QQQQ I will overlap more than 16% with stock I own. I think I should rather consider getting some Apple and some Amgen, which I will study this week if I have time… Actually I always have time… I should rather say:
“If my lazyness allows me to!”
BUY, SELL, KEEP 
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