Gates in Internet 'gold rush' warning
By GEOFF KITNEY in Davos, Switzerland
The world's wealthiest technology entrepreneur, the Microsoft chairman Bill Gates, has compared the skyrocketing prices of Internet stocks with a "gold rush".
And he warned that share prices were now too high to be sustainable.
Speaking at the World Economic Forum meeting in Davos, Mr Gates said there was now "massive risk" in investing in Internet companies because of the overinflated values of their shares.
Backing a warning given last week by the chairman of News Corporation, Rupert Murdoch, and the chairman of the US Federal Reserve, Alan Greenspan, about the risks involved in investment in spectacularly successful Internet shares, Mr Gates said investors were participating in a buying frenzy "like it's a gold rush".
But he also said that for those prepared to take big risks there were still buying opportunities, and that his company would "partcipate a little bit" in the continuing frenzy.
He said he had believed as long as a decade ago that prices for Internet stocks were too high, even when price/earnings ratios were much lower than now.
"Obviously that view that they were going to go down didn't prove out. In the long run, will I be right? I think so," he said.
Mr Gates' warning about increased risk levels in Internet stock investment was consistent with the overall theme of the meeting, which has seen cautionary warnings about the risks of further economic shocks ahead as the world economy continues to try to cope with the crisis sparked by the collapse of Asian economies.
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