The media has recently been reporting the huge rises in stock valuations of technology companies like Apple, Amazon, Nvidia, Alphabet and Microsoft. With the NASDAQ index pushing past its 2000 high, it has prompted many investors and pundits to question the rise and rise of tech valuations reminiscent of the dotcom bubble.

There’s a stark difference between the craze at the start of the millennium versus today – valuations back then were backed by nothing but hot air. Companies being listed had no revenues, no profits but touted “new age” metrics like user clicks and saw their stock prices double or triple within weeks or even days.

Traditional valuation metrics like price to earnings, book value, enterprise value to EBITDA, price to sales let alone free cash flow, were thrown out the window. Sell-side analysts became delusional, so did many professionals – some quit the game entirely, legends like …