Big hedge fund money warns about tech bubble

James Dinan, founder of York Capital Management.
Daniel Acker | Bloomberg | Getty Images

Prominent money managers are warning of a bubble in some technology stocks and recommending investors avoid emerging markets in favor of Europe.

"The high probability is when you look back on this period five years from now, you'll say some of these companies grew into their (earnings) multiples … but I think biotech and other areas in tech have seen multiple expansions beyond what we can justify beyond any kind of reasonable cash flow expectations," Doug Silverman, co-founder of $6.7 billion hedge fund firm Senator Investment Group, said Monday at the Portfolios with Purpose Awards Night in New York.

"You can only call it a bubble. But I have not guessed when it will end," Silverman added.

Rich Pzena of $23.7 billion Pzena Investments agreed.

"Yeah, I think we are in a bubble. I don't know if I would say it's broadly in tech stocks. I think it's in certain stocks. But the hype feels like we're in another Internet-type bubble like 1999," Pzena said.

Related Tags