There has a been a lot of discussion regarding whether Social Media and Cloud-based stocks are at bubble prices. Clearly, there are significant differences between the current frothy valuations on a few stocks that at least seem to have legitimate businesses underlying them, and the absurdity that was the Nasdaq in 2000. At that point in time, stocks with no revenue and no business model were trading at ridiculous valuations. With that said, I do believe that there is far too much optimism on most Social Media and Cloud-based stocks and that this will likely end badly for most investors. When stocks are priced for perfection, any little bump in the road can force a severe sell-off because there is no margin of safety. Salesforce.com is a promotional company that is absolutely not profitable. About 10% of revenue goes to stock option compensation and the company is constantly diluting its shareholders’. The high stock price has been a savior for the company because without it, the company doesn’t generate the cash flow to acquire to pay its employees with such largess. Shorting the stock has been a losing proposition for many over the last decade, but at some point, I am confident that the valuation will come down significantly.