After being at a client meeting all day yesterday, I logged into Bloomberg to see what the crazy moves in the markets had been all about.  As I was looking down a list of U.S. market indexes, not too far from the top was “NYSE TMT INDEX.”  You see it plotted since inception above, along with the S&P 500 and the relative performance of the TMT index to it.

So what is this TMT?  I went to Wikipedia and there were a number of possibilities given, including one described as “Technology, Media, Telecommunications – an investment sector, e.g., late-1990s TMT bubble.”  Tellingly, it lacked a link to an entry on the site.  One can only imagine the lengthy treatment the concept would have received if Wikipedia had debuted a couple of years earlier than it did.

For the record, Bloomberg describes the particular index shown above in this way:  “The New York Stock Exchange TMT Index represents top 100 NYSE-listed companies in the telecom, technology and media sectors globally, measured by market capitalization.”

It was a white-hot concept.  The acronym said it all and when spoken had a golden resonance that promised a new era.  But such ideas have a cyclicality to them and, in the investment world, that means that devotees pile in at the peak of popularity only to be disappointed that the future wasn’t so golden (or at least had been discounted).  When an idea is reduced to an acronym and it dominates the conversation of the investing public, you’re usually closer to the end than the beginning.

It’s instructive to look at the page for the index on the NYSE website.  All looks normal, with updated index values, descriptions, and the like.  Open the PDF brochure at the bottom of the page.  It hasn’t been updated since the end of 2007.  That tells you much about how markets behave.  (Chart:  Bloomberg terminal.)

pdf guide

It’s that time again.  Every quarter I update the PDF guide to the research puzzle.  It provides links by topic area to the essays I’ve written on the original site (investment process, the business, etc.) and a few things from pix too.  It covers a lot of ground, so if you’re interested in investments, there’ll be something for you.