There are plenty of good reasons for remaining on the jetty, not least those apparently crazy valuations. Some of them may eventually be justified. For instance, there seems little doubt that ARM is going to be a big winner from the new economy. But most of them won't and the only reason they are valued as highly as they are is because of their scarcity; in Britain at least, the number of quoted ways into the new economy is still limited. The very thin market in many Internet and technology stocks makes matters worse still.
But counting against this cautious, traditional investment approach is the momentum building up behind these industries. Over the last six months, scepticism has begun noticeably to fall away and nearly everyone has bought the new economy story to some extent. Most fund managers are still profoundly under weight in these sectors, and they are casting around for ways to get in. Inevitably, there will eventually be a terrible shakeout, but it's only a stale bull or a brave man who would call it now.