Outlook: Techno-mania turns stock market into a casino

FEW STOCKS better epitomise the present bout of technology mania than Psion, the palm held computer company. Over the past two months the shares have rocketed from just pounds 8 to a peak of a little more than pounds 30. Then, like a spent firework, down they plummeted yesterday, by more than 40 per cent at one stage, only again to bounce back up, after two suspensions and a clutch of try-on rogue trades, as the bargain hunters moved in.

Is there any rational explanation for these wild gyrations, or are they just a symptom of the present madness? A bit of both seems to be the answer.

Until yesterday's unexpected announcement from Ericsson that it is linking up with Microsoft to develop internet and e mail functions for mobile phones, it was generally assumed that Psion had the field to itself. In a blaze of publicity last year, this startling British success story had managed to sign up the world's top four mobile phone companies - Nokia, Ericsson, Motorola and Matsushita - to its Symbian project to develop the next generation of smart mobile phones and palm held computers.

It was never very likely, when you think about it, that big brother Gates was going to sit there on the sidelines and allow Psion a clear run in what is expected to become the world's fastest growing market for operating systems. Nor was it at all likely that companies as fiercely competitive as these four mobile phone goliaths were going to sign up collectively and exclusively to just one of those developing technology in this area.

But then this present heady investment craze isn't about the likely, is it? Rather, it concerns the merely possible, or just about plausible. If you think this sounds a little unfair on poor little Psion, which unlike so many other participants in the techno-mania, actually already has a very credible product with outstanding growth potential, you would be right.

As it happens, what Microsoft is planning to do with Ericsson, which is to develop a browser, is a bit different from what Psion is doing in attempting to create an operating system. At this stage then, Ericsson's link with Microsoft is not incompatible with its continuing participation in Symbian, though plainly it has potential to become so. It could therefore be argued that Psion remains one of the better new economy plays.

The trouble is that stock markets have become incapable of distinguishing between the good and the bad, or of credibly assessing the growth prospects and market opportunity of these new economy companies. All that is required is the magic words "new economy" to be tagged to a company's prospects, and away it goes.

It is hard not to laugh at the naivity of it all, or marvel at the cynicism of some of those who are driving the process. For many market professionals, the game has become one of creating momentum first thing in the morning by buying a little stock and promoting it on the internet bulletin boards, then selling into the strength as the lemmings pile in. We are dealing here with a fully blown mania, without a shadow of a doubt, and like all manias, it is bound to end badly.

As the money - smart, funny and just plain stupid alike - chases the techno and telecom sectors ever higher, older, quality stocks in traditional industries are bombing. Take Barclays - down from pounds 20 to little more than pounds 16 in the last month alone. A judgement day will come, eventually, when the wheat will be separated from the chaff. Unfortunately, it is as hard as ever to know when it might be or what might trigger it.

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
PROMOTED VIDEO
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Sport
Arsenal signing Calum Chambers
sportGunners complete £16m transfer of Southampton youngster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Java Developer - Banking - London - Up to £560/day

£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on