The Elliott Wave Theorist November 1989 quote came in the most heated phase of the another great takeover frenzy. It was followed by a plunge in the Dow Jones Transportation Average, one that the Transports did not recover from for more than three years. Today’s issue of The Elliott Wave Financial Forecast highlights several firms and industries that are similar focal points to current buyout boom. It also shows a chart illustrating the correlation between corporate takeovers and the stock market. The charts below show the same “coincidence” in each of the bull markets of the last century.
NUMBER OF CORPORATE MERGERS
AGAINST THE DOW
The flurry of recent deals, which carried the total for the year past that of 2000, is the kind of rapid fire merger news that accompanied peaks in 1901, 1929, 1968 and 2000. Another common occurrence at peaks is the establishment of magazines dedicated to fulfilling investor’s unquenchable thirst for information about peaking financial assets and strategies. Remember eCompany Now? Time magazine’s Internet business magazine debuted with the NASDAQ peak in the spring of 2000. Dealmaker appears similarly timed. Of course, The Industry Standard and Business 2.0 came out several months before the NASDAQ peaked in March 2000, so a continuation of the trend is certainly possible. But Dealmaker’s effort to “conjure up that go-go atmosphere” of the late 1990s, says that the top will come sooner than later.
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