Tuesday 17 April 2012

I keep saying there is a bubble in the tech market

Apple losing 9% of its market value overnight should not come as a surprise. The fact is that so many companies (like Apple and Facebook) are valued primarily on estimated future earnings heavily based on assumptions, that their stocks are proner to especulation. This is nowadays a major threat as, for many of those companies (not Apple, nor Google), there monetization models and profitability are still unclear - will they really make as much money as anticipated? In the words of Warren Buffet, you shouldn't make an investment if you don't understand how the company will money and thus how you will make money with it...

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