Where Dot-Com 1.0 died in 2000, and resurrected in the early 2000s, the current boom began with the shift to mobile devices in 2007 and has seen its fortunes fall as mobile devices have become less of the grand boom that people hoped.
Now, the markets are noticing that top tech stocks are over-valued:
Goldman Sachs on Friday released a report on the top five outperforming mega-cap names in tech with some warnings on valuations and concerns that their volatility has become extraordinarily low. In fact, the stocks had become closely correlated to safe haven plays, like bonds and utilities.
…What it found is that the current-day tech stocks have advantages in cash flow, valuation and cash balances over the top five tech names in the first quarter of 2000 â€” just before the bubble burst. But the current group is behind in profitability, as measured by gross profits and total assets.
The group makes up about 13 percent of the S&P 500, but has accounted for almost 40 percent of its year-to-date performance. The stocks are among the top holdings of hedge funds. The analysts noted that mutual funds, aimed at core, growth and value, are overweight all but Apple, and the five companies combined are 11.8 percent of those mutual fund holdings.
What is the product of this third iteration of the internet, which is powered by social media and search engines? Advertising. So, the internet is the new television… and yet, people are dropping out of the internet as an entertainment medium as it becomes destroyed by the herd behavior that destroys every human endeavor.
Those with the attention span and experience to know how the promise of the internet has died are starting to speak out about its centralization under social media:
In Sundeâ€™s opinion, people focus too much on what might happen, instead of what is happening. He often gets questions about how a digitally bleak future could look like, but the truth is that weâ€™re living it.
Everything has gone wrong. Thatâ€™s the thing, itâ€™s not about what will happen in the future itâ€™s about whatâ€™s going on right now. Weâ€™ve centralized all of our data to a guy called Mark Zuckerberg, whoâ€™s basically the biggest dictator in the world as he wasnâ€™t elected by anyone.
One of the most important things to realize is that the problem isnâ€™t a technological one. â€œThe internet was made to be decentralized,â€ says Sunde, â€œbut we keep centralizing everything on top of the internet.â€
Who is “we”? The answer is simple: the consumer. The internet went from being a place of many sites offering diverse information to a few big companies that control everything because the consumer audience wanted safe, convenient, easy and cheap data. So they turned to centralizers like Facebook, Wikipedia, Google search, Twitter, Pinterest, Reddit, Apple iTunes and Netflix.
That in turn ensured that all those independent producers of content stopped producing. What is the point to investing twenty or forty hours of time a week in online content in exchange for a few hundred visits a day? People abandoned the internet to the new conglomerate overlords. These then used their market power to expand so that now, they are all fighting for their share of the herd flowing through.
In other words, the decentralized behavior of the herd caused centralization, much as it did in government, and this centralized force then had an interest in managing, controlling and manipulating the herd. The human pattern repeats yet again, and soon, we will bear witness to the force of its emptiness.