"Is it frothy? You can definitely make that argument. Is it like 1999? No."
That’s billionaire Mark Cuban sounding off on the current state of the stock market during CNBC’s “Fast Money Halftime Report” on Wednesday.
“Interest rates were a lot different back then,” he continued. “And you saw a lot more people participating in the market... You don’t see that now... individual daytrading really led the market to be frothy.”
Cuban said that, with so much money pouring into index funds, the landscape is completely different from back then. “As long as those funds keep on growing the market is going to go up,” he said.
A day earlier, fellow billionaire Paul Tudor Jones, from the sidelines of the World Economic Forum in Davos, said we are currently in the “craziest monetary and fiscal mix in history,” and, at least to him, it’s reminiscent of 1999.
Cuban, however, doesn’t see it that way.
What happens next in the stock market, he said, depends where interest rates go from here. If rates continue to stay this low, “Where else are you going to put your money?” the Dallas Mavericks owner asked, adding that low interest rates are kind of like universal basic income, but for rich people.
Some of that “froth” came out of the market early on in Thursday’s trading session, with the Dow Jones Industrial Average dropping triple-digits to hover around the 29,000 level. The S&P 500 and Nasdaq Composite were also moving lower.
This article was originally published on MarketWatch.
