After the Masquerade

I can only stare
You make me feel
Like I don't care
--Pete Townshend

Over the past year or so I've had recurring feelings of dotcom deja vu. It hit me again a couple of nights back while I was watching the after-hours tape slide by on CNBC (something I rarely do anymore). As the stock names travelled across the bottom of the screen, I realized just how few of them that I had heard of.

It turns out that many of the underlying companies sport little or no sales, much less profits. Yet, they regularly sport markets cap in the tens of billions of dollars.

Similar to the eyeball propositions of the dotcom names twenty years ago, extreme optimism has pumped up these 'concept stocks.' As Fleck recently opined, many of these stocks represent "business plans masquerading as companies."

Of course, those participating in masquerades usually have to reveal who they really are at some point. Twenty years ago, investors didn't like what they saw when the costumes came off.

They may be in for a similar awakening.