Does the outlandish valuation of Netflix & Facebook show a lack of good ideas?

[Kluge]

Title cut off... *lack of good ideas for institutional investors to throw their money at?

I just look at these two and think end-of-life (if you're barely profitable now that you're mainstream and established, where do you go?), but the P/E ratios on these just keep climbing at ridiculous rates. I'm trying to figure out where the logic bottleneck is (maybe within me?), and I can't help but think it's dumb money telling their fund manager to invest in "technology," but not wanting to get into the higher risk of ventures which haven't yet proven a massive market and are a household name, or maybe they only pay their employees in stock. I'm not even thinking about Bitcoin here, just wondering what on Earth's going through these folks' minds. If someone could explain it to me, I'd be appreciative.

(heading to sleep, so won't immediately respond - not trolling)

[Bit_Happy]

It's the year 2000 Dot Com bubble with a twist.
Instead of huge prices for Pets.com and 5000 other "companies" we have a smaller number of giants which are rising too fast.
Then we get to add the next BTC bubble into the mix, as the Dollar is collapsing, and the possibilities are Mind Blowing.
May you live in interesting times.    

[Kluge]

It's the year 2000 Dot Com bubble with a twist.
Instead of huge prices for Pets.com and 5000 other "companies" we have a smaller number of giants which are rising too fast.
Then we get to add the next BTC bubble into the mix, as the Dollar is collapsing, and the possibilities are Mind Blowing.
May you live in interesting times.   

I definitely can see that... Global economy's already fragile, and decreased unemployment rates and increased wages in US barely match official cost inflation numbers in the "recovery."

I wonder why Google is priced so relatively low by P/E. They're in practically everything and expanding into recently-unknown markets (while entering old markets, too) at unreasonable speed - seems like what you'd want to be in if you're going to throw money at "technology." It's such a diversified conglomerate (rather than being a mere product like some others), it's practically a mutual fund - it has plays for all spans of time for virtually everyone, and is already quite profitable compared to other web 2.0 plays (or 3.0? Idunno if that argument was settled, yet). Twitter's a flat-out money-hole, Facebook's latest earnings have it making <1% of current market price per quarter, Netflix is making well under half a percent of price per quarter, and Google's making just under 3% price per quarter. I guess I just don't understand the thinking going on when you have "3x normalized EPS, high diversity, and a 'true,' older company" vs "1/3 normalized EPS, little diversity, relatively new, mostly one product [soon to be two]" and someone would pick the latter.

I don't have a stake in any of this, obviously -- I don't even understand the mindset of spending a year's earnings to buy .0005% of something and only being able to get company updates from the news and mass mailers or looking at a company's sterile stockholders' webpage. Guess I need to study the Dot Com bubble more. Recommended reading?