Skip to comments.Are We In Another Tech Bubble?
Posted on 11/17/2013 6:26:37 PM PST by SeekAndFind
Theres a reason why a lot of the worlds top investors, like Warren Buffett, dont invest in technologyit moves too fast. And its too hard to track whether the hot stock or idea of today will be worth anything in five years. Buffett famously references the auto industry when he talks about his aversion to technology stocks. There were hundreds of car companies in the U.S. during the early part of the 20th century, but only a handful survived and made investors any money over the long haul.
The big question is, are we in a bubble right now? First, my gut feeling. Ill come clean here and share that back in 1999, I was actually recruited to join a Citigroup funded technology incubator in London called Antfactory, which aimed to invest in pan-European media plays. (Yes, I cringe as I write those four words.)
The very fact that such firms were hiring journalists as partners was clearly the sign of a market top. And while theres certainly more substance to many of todays hot firms, like Twitter or Facebook, than there was to, say, Pets.com or many other iconic firms of the late 1990s, I do feel the same frothy enthusiasm in the market as investors put enormous valuations on firms which still dont make any money. I also sense a lot of bubble like hubris from techies themselves.
(Excerpt) Read more at business.time.com ...
Buffett doesn't invest in technology because technology has no leader to suck up to.
In a tech bubble?
Orders weren’t good in Q3 for semiconductors. Q4 didn’t look bright.
Buffet’s reason for not investing in tech being because it
changes and evolves extremely quickly is the mark of an investor from the OLD days. ALL industries and companies now must change, evolve and adapt at breakneck speeds compared to 50 years ago or they fall behind and die. This
of course means it’s much harder for stock pickers to choose winners and losers and increases their risk.
TOUGH.....that’s life. Adapt or die/go broke.
The only reason there are not hundreds of auto makers today is regulation and unions.
When the likes of TIME mag suggest a tech bubble might be forming, it probably has several years of upside to go. Only slightly exaggerating here.