We are seeing the same thing, if a little less and a little delayed. Does it have to be like this? I don't think it is just the tech industry but any new and hot growth area. Fred Wilson writes in Bubble 2.0 that we are heading for a new bubble, similar to the one that ended around the year 2000.
But increasingly money is being made the way we made it from 1998 to early 2000; [momentum] investing, speculation, fast money chasing deals, caution being thrown to the wind, and amateurs jumping in on the action. It's hard to say no to a good party. I am struggling with the temptations myself.
I am in two minds about how it will go this time. On one hand, I am optimistic that the excesses in Europe were always less and that people must have learned their lessons by now.
On the other hand, lots of money was being made in the Bubble 1.0 by many people, but even more people in Europe didn't make lots of money because they got in to late. This makes me think that perhaps the Bubble 2.0 will be even greater this time around in Europe.