Tale of two indices: The old economy Dow Jones vs tech heavy Nasdaq

The old economy Dow Jones and tech-heavy Nasdaq were in lockstep till 2017.

Thereafter Nasdaq had broken out.

Into Covid19, Nasdaq fell much less than Dow but snapped back even faster and further;

Widening the breakout with Dow Jones, re-claiming Life Time High of Nasdaq with ease Usually mean reversion works the other way! The one to fall most bounces the back the most! That’s what we learnt in statistics.

Clearly this remarkable divergence is for a reason: and it is the dominance of tech-led disruptive innovation putting old economy stocks and indices into a “Value Trap” that is destroying all our wealth, while “Value Migration” in disruptive tech accelerates further from here on.