Are Tech Valuations the Next Dot Com Bubble?

In a brief, but telling article from Inc.com, Jeremy Quittner cites statistics from the November 2013 Janus Monthly Equity Report that suggests the tech and social media industries may be heading for a burst of 1990’s proportions.  This is due largely to the outrageously enormous public debuts of companies like Facebook and most recently, Twitter.  The stratospheric valuations only become more unrealistic when considering these are companies that do not create or manufacture any tangible good or service.  By and large, they don’t produce anything.  The report itself warns, “…cloud computing and social media are bringing a level of disruption and innovation not seen in the technology sector since the dot-com era,” and “…the troubling aspect is that valuations for many of these companies seem just as stretched as Internet stocks were back then.” Janus carries some credibility here, as the former purveyor of some of the most prominent tech stocks leading up to the dot com crash.