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A little insight into where some of the current tech hubris is coming from.. Silicon Valley’s largest tech firms are now among the world’s biggest investors. Combined, Apple, Amazon, Facebook, Google and Twitter invested $66 billion in the past 12 months.
Yet judged by the financial yardsticks of the dotcom era there is as yet no bubble. The NASDAQ index of mainly technology stocks is valued at 23 times expected earnings versus over 100 times in 2000. That year Barron’s, an investment magazine, published an analysis showing that 51 listed technology firms would run out of cash within a year. On December 6th Barron’s repeated the exercise and found only five listed tech firms with wobbly finances.
