Frenzied growth leads to frenzied behaviour - especially in tech

Technology is transforming every other industry. The beneficiaries of this are often not the businesses deploying the new tech – they are the ones spending the money and may reap little reward for it – but the technology companies supplying them.

As a result, almost all the growth in operating earnings for the S&P 500 for the past eight years has come from the IT sector. Best-performing sectors 2019: Tech on top as US and UK funds flood the top 10 However, frenzied growth can lead to frenzied behaviour - something we often see among tech investors. The most obvious and exciting companies are always ludicrously overpriced in technology, and frequently have poor business models incapable of generating both profit and growth at the same time.  One need only turn to the WeWork IPO debacle - which saw the company's valuation dro...