Amazon, Netflix and Google. Three great companies whose products I use with regularity. They are profitable. They are growing. They have a dominant market position. They have great management. They are innovative. For all those reasons, they should trade at a high price. The question is how high. And no matter how good a company is there comes a point where it is too high. In my view, all three have reached that point. This is not to say I would recommend being short. Who knows how long the enthusiasm will last? But at current prices, I would not touch any of them on the long side and would take profits on outstanding positions. For Amazon and Netflix in particular, the P/E ratios are astonishing – 192 and 241, respectively! Those sort of multiples imply market expectations of extraordinarily rapid growth in future cash flows. It is hard for me to see those multiples expanding further and easy for me to see them contract considerably. At this level, the risk/return tradeoff is far too weighted on the side of risk.