Analysts warn that we may be in a tech bubble again | City & Business | Finance

The euphoria that preceded it was a wonder to behold, as ordinary people were swept up by the excitement surrounding the revolution and taxi drivers tossed around stock tips like confetti.

I remember putting several thousand pounds into soaraway fund Aberdeen Technology, days before it crashed to earth.

I learned more from that trade than any other: shun investor euphoria and never invest at the top of the market.

Now analysts are warning that we may be in a tech bubble again. 

They fear the eight-year stock market bull run is being sustained only by a handful of US global tech giants: Google, Facebook, Microsoft, Netflix and Apple.

Investors are flocking to these big names because of disappointing returns elsewhere, driving valuations to unsustainable highs. 

The most dangerous phrase in investing is “this time it is different”, so I should be careful here, but I do not think we are heading for a repeat performance.

The difference is that during the first bubble there were just 300million internet users, today there are more than three billion.

Loss-making start-ups burned through hundreds of millions without making a penny of profit, today’s tech giants bank billions in revenues every month.

A tech reversal is likely at some point, and it will hurt, but it should prove far less memorable than the last one. l

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