Yet last week, Eddie George, Governor of the Bank of England, contradicted this by appearing to endorse the high values of these stocks: "... the particular strengths of high technology stocks in equity markets provide a better underpinning of equity values than perhaps has been appreciated," he said.
If those who should know what they are talking about cannot agree, where does this leave the average investor?
Mouth-watering growth in the share price of companies such as bookseller Amazon.com or internet search engine Yahoo! has left many investors keen for a slice of the profits. Internet company NewMedia Spark is less well known, but since it floated on the Alternative Investment Market in October at 42p a share, the price has doubled to more than pounds 1. NewMedia Spark is now valued at pounds 110m even though its assets are little more than a small stake in another publicly quoted company - Digital Animation - and a pounds 4m cash pile.
Such stories are commonplace. Shares in many small hi-tech companies are trading at 20 times net asset value as investors bet that at least one of these turns into an Amazon.com.
But the risks are high: the FSA has warned that "dotcoms" can be difficult to trade. There is also the fear that shares are ridiculously overvalued.
For those who want to invest but would also like to sleep at night, a slightly safer way to invest is through a fund run by an experienced fund manager. Jason Hollands, deputy managing director at independent financial adviser BEST Investment, recommends the Henderson Global Technology fund and the Aberdeen Technology fund. Both invest in telecoms, the internet and computers.
Mr Hollands also recommends the Framlington NetNet fund. Launched in May, it is the only fund in the UK that invests solely in internet stocks, or companies that use the internet to boost sales, such as the clothing retailer Gap.
However, if you want to go it alone and have spare money to invest, there are many options.
Stocks to watch include:
Cambury Investments, a shell company taken over by a group of investors led by Hugh Osmond, chief executive of Punch Taverns. It includes a stake in recently floated Redstone Investments and eVestment, another internet investment fund, among its holdings.
n eVestment has also been making solid progress investing in new ventures including iDefense, a company that develops software aimed at protecting internet servers from hacker-inspired cyber attacks.
n Investment company StartIT, valued at pounds 4m, has a more unusual strategy. Backed by managers involved with the hugely successful Torch Telecom group, it invests in start-ups. Such a high-risk strategy has the potential to deliver huge returns but venture capitalists estimate that at least three- quarters of all start-ups fail to get any kind of public listing or are subject to takeover bids.
n The Multimedia Corporation used to be an ailing software house but has been transformed under new management.
n Venture capitalist Shore Capital has a good record in backing hi-tech start-ups. Its Puma 1 fund backed BATM, an Israeli telecoms equipment maker which has rocketed in value.
n London Pacific is an old- fashioned insurance business whose venture capital arm, Berkeley International, invests in internet companies such as Ramp and Net Perceptions. It has a market value of pounds 267m, a healthy dividend stream, a growing annuity and life business, and a slew of new venture capital investments ahead.
Whether you choose to buy shares in hi-tech companies directly, or go through a fund manager, you should be prepared for a bumpy ride. "Technology funds have had a phenomenal year," says Mr Hollands. "But we are very concerned that people don't understand the risks. Investors must be committed for the long term and be prepared to see a lot of fluctuations in returns."
n For a free copy of the BEST Investment PEP & ISA magazine, which has a feature on investing in technology, phone 0990 112255 or visit www.bestinvest.co.uk