This time is different—the four most sinister words on Wall Street, often uttered at a bubble’s peak. But if you talk with tech fund managers today, that’s exactly what they’ll tell you, despite record-breaking levels in the tech-laden Nasdaq index. The surprising thing is they may be right— at least partially.

Rahul Narang has every reason to be skeptical. He was a short seller betting against technology stocks in the 1990s dot-com bubble before he became manager of the Columbia Global Technology Growth fund in 2012. But he sees distinct differences between now and then. “The forward price/earnings ratio for the average tech stock is 19 today versus the S&P 500’s 17.7,” he says. “This compares to a 53.5 average P/E for tech in March 2000. So valuations are significantly cheaper versus the bubble.”

While tech is trading at a premium to other sectors, historically it always has, and right now the valuation spread is among the narrowest in the past 30 years, Narang says. At the end of June, the P/E spread between the average tech stock in the Standard & Poor’s 500 and the rest of the key index was 1.03 times; in 2000, it exceeded two times.

Of course, Apple (ticker: AAPL), which accounts for 15% of the S&P 500’s tech weighting, has a disproportionate influence on the valuation. And “Apple, by far, is one of the cheapest stocks out there,” Narang says. “Our analysts have a base case target valuation of 15 times [fiscal 2018’s] earnings, which gets you to $184 a share. That’s just the base case, and it’s still trading at a discount to that [at a recent price of $161] and the overall market. Then you add in the about $50 per share of cash on its balance sheet, and that it’s paying a dividend, and it squarely fits in the value camp.”

THE PROBLEM WITH APPLE is the law of large numbers. It’s an $825 billion behemoth. “A lot of large-cap tech companies have seen their valuation multiples compress because their growth is stagnating,” says Ken Allen, manager of the T. Rowe Price Science and Technology fund. “Apple is so massive now, it’s hard to grow very much. So it’s valuation multiple has come down. IBM’s [IBM] multiple has stagnated, as have [those of] Hewlett Packard Enterprise [HPE] and HP Inc. [HPQ]. There tend to be reasons for many of these stocks seeing multiple compression, and many of these companies are fairly large.”

That compression among the old-school technology giants, Allen argues, is masking the fact that other tech companies have become expensive. “As I look across the various tech stocks, many of them have much higher valuation multiples, versus where they were a year ago,” he says.

Yet Amazon.com (AMZN), which has a 246 trailing P/E, according to Morningstar, is Allen’s largest holding. Allen and Narang, who also owns Amazon, make the case that it’s investing heavily in growing its business, so its earnings are artificially depressed.

“If you start using traditional valuation metrics, you’ll miss the growth opportunity,” Narang maintains. “So what we try to do is spend a lot of time thinking about total addressable market, or TAM. If you think about Amazon, seven years ago it was valued as a traditional retailer. But they caught the cloud-computing opportunity, and they had a seven-year lead in that space, which is unheard of in the technology industry. For the cloud business, the TAM is very big—hundreds of billions of dollars.” Morgan Stanley recently pegged the TAM for cloud computing at $340 billion by 2020.

In addition, the model for how technology is purchased and consumed has changed, perhaps justifying higher valuations for players such as Amazon, Netflix (NFLX, 207 trailing P/E) and Salesforce.com (CRM, 486 P/E). “The big drivers of tech back in the 1990s were more hardware companies like Intel [INTC] and Dell,” says Michael Lippert, manager of the Baron Opportunity fund, which has 58% of its portfolio in tech. “Most of the revenues for hardware were one-time revenues. The company that sold you that product never really saw or heard from you again. They didn’t have a continuing relationship with you.”

TODAY, MANY TECH PRODUCTS are subscription-based, and companies have interactive relationships with consumers. Netflix, for example, knows what you like to watch and gives you recommendations, as does Amazon Prime. Both keep you on the hook indefinitely. “Because of that dynamic, you have much more visibility on the revenue and earnings stream, and you have much stickier businesses,” Lippert observes. This merits higher valuations, he argues.

Traditional value managers don’t buy this argument, yet they’re still investing in tech. “Who’s to say Amazon’s unbeatable?” asks Stephen Yacktman, co-manager of the AMG Yacktman Focused fund, which has a surprising 25% tech weighting for a value fund. “You would have said that about Wal-Mart Stores [WMT] 20 years ago. Technology changes so rapidly it’s hard to stay on top.” Instead, Yacktman owns old-school names, such as Cisco Systems (CSCO), Oracle (ORCL), and Samsung Electronics (005930.Korea). “We own the companies that were popular in 1999,” he says. “But if you talked to us then, we’d have said we’d never own tech.”

UWC Scientist Takes Science and Technology to The Township

Cape Town - After completing her science degree, Dr Fanelwa Ngece-Ajayi is using her expertise to highlight the importance of science and technology in Khayelitsha - her home suburb.
Ngece-Ajayi supported her domestic worker mother financially by braiding hair on weekends, so she could make it through school.

Now the physical chemistry senior lecturer at UWC has established a non-profit organisation, AmaQawe ngeMfundo, in the hope of changing negative stereotypes about townships - starting in schools and instilling confidence in pupils to study maths and science.

“We visit schools with our makeshift mobile laboratory and give learners access to interactive demonstrations and experiments to help make learning more practical," Ngece-Ajayi said.

"Then there are times we take them on outings - to the Science Centre, for instance. One of the learners inspired by that trip would like to become a forensic biologist.”

Ngece-Ajayi said her organisation was currently limited to Khayelitsha, due to a lack of funding and resources.

“In future, I’m excited about seeing these youngsters interested in solving the current water crisis, as well as finding solutions to the health issues in South Africa.

"I want them to see that it is possible to be part of this country’s teams leading projects of this magnitude.

"Lecturing at UWC showed me that students from the townships and rural-based schools struggle financially, and sometimes quit their studies due to a lack of a proper foundation in science and a lack of exposure in the field, and I’d like to change that.”

Ngece-Ajayi said she was able to stop work and focus on her studies after getting a government bursary.

“The most disheartening thing is to see bright kids from my area pass matric and sit at home aimlessly.

"It makes a difference, going out to communities which don’t have wifi access, and teaching them how to go about doing an online application. When you’re there in the community, it makes it easier for learners to run back home quickly to get the necessary documents, instead of travelling.

"I’m doing what I would have liked done for me.”

Meanwhile pupils from around Khayelitsha have been treated to a “science feast” at the National Science Week, being held at the Oliver Tambo Community Hall.

The annual event will come to an end Saturday.

Dr Rejoyce Molefe-Gavhi, the Project Leader of the AIMS South Africa, that was part of the event said it is important to inspire pupils to take part in the fields of Maths, Science, Technology and Engineering.

“With pupils from areas like Khayelitsha you find that they have no role models in the community and there is also a lack of resources and you find that they don’t take it further. It is important to have resources they can have more interest. We want them to have the experience of doing the experiments.”

Anthrax’s cousin wreaks havoc in the rainforest

In 2001, while studying chimpanzees in the Taï National Park in Ivory Coast as a Ph.D. student, Fabian Leendertz watched an alpha male named Leo vomit, climb up on a low branch, then topple over and die. That death and five others in the following months were the first inklings that an unexpected killer was afoot in the rainforest.

Five years later, Leendertz and his team at the Robert Koch Institute in Berlin showed that what killed the chimps was an unusual form of anthrax. Now, in a Nature paper, they present evidence that the microbe causing it, Bacillus cereus, plays a huge role in the ecology of the rainforest, apparently causing a large proportion of all mammalian deaths. It threatens to wipe out the chimpanzees in Taï, the authors warn.

“This needs to be taken seriously,” says Chris Whittier, a veterinary scientist at Tufts University Cummings School of Veterinary Medicine in Grafton, Massachusetts, who was not involved in the work. “I hope this opens up a lot of people’s eyes.” Hunting and deforestation have already brought chimpanzees to the brink of extinction, but “diseases such as anthrax, Ebola, or introduced human respiratory viruses may serve as the final nail in their coffin,” says disease ecologist Tom Gillespie of Emory University in Atlanta.

Back in 2001, Leendertz and his colleagues thought the chimps had died of the familiar form of anthrax, caused by B. anthracis. But that is known to kill many wild animals in arid regions, not rainforests, and in 2010 the researchers linked the deaths to the closely related B. cereus, a common and usually benign soil microbe. (Some strains do cause diarrhea and vomiting in humans.) They also discovered that the Taï strain has acquired two plasmids, or circles of DNA, possibly from B. anthracis, encoding most of the genes that make anthrax a formidable killer.

Leendertz and his team examined samples from bones and carcasses from at least 20 different species, collected in the forest over almost 26 years. They detected the pathogen in 81 of 204 carcasses and 26 of 75 bones. In addition to chimps, six monkey species, duikers, mongooses, and a porcupine died of the disease; overall, it appeared to be responsible for about 40% of observed wildlife deaths. The killer strain is not limited to the Taï forest; Leendertz and others have linked wildlife deaths to B. cereus in Cameroon, the Central African Republic, and the Democratic Republic of the Congo.

Still, Leendertz’s team could only thoroughly examine 15 of the infected carcasses. All showed signs typical of a lethal anthrax infection, such as bleeding and swollen lymph nodes, but in other cases, the only evidence is genetic, meaning that the animals may have carried B. cereus but died of something else, Gillespie notes.

Computer simulations by the team showed that anthrax could wipe out the Taï forest’s population of roughly 400 chimps within the next 150 years. Why it hasn’t already done so is a puzzle, because the wide genetic variation found in bacterial samples from the forest suggests that B. cereus has long been present there. But Leendertz says chimps migrating in from other areas may have made up for past die-offs. With populations dwindling elsewhere, that may not happen in the future.

Protecting the chimpanzees will be difficult. The standard anthrax vaccine also protects against B. cereus; the team vaccinated about 100 animals in 2012 and 2013 and is now monitoring them. But researchers can only reach the few animals that have been habituated to humans. And protection may only last a year, so the chimps would require regular shots. “Vaccinating them too often is a problem since they get shy,” Leendertz says.

A better understanding of how B. cereus spreads might help efforts to fight it, Leendertz says. Animals contract B. anthracis when they inhale or swallow hardy spores released into the soil by cadavers. But B. cereus in Taï “may have a very different ecology and epidemiology,” Gillespie says.

“We are currently investigating in depth the source of infection by testing everything the chimps are eating,” Leendertz says. “We’re also looking at other possible sources, such as arthropods.” One candidate is carrion flies. Leendertz’s team found traces of B. cereus DNA in 17 flies; if they help spread the disease, that might explain how some monkey species that only live in trees become infected. The team found the pathogen’s DNA in 12 out of 103 flies living in the canopy.

There are other questions. Are humans somehow protected from infection? And how far has this pathogen spread? Whatever the answers turn out to be, the new study provides a lesson, says William Karesh of the EcoHealth Alliance in New York City. Most wildlife research has been done in grasslands, where it’s much easier to work, but “there is a vast amount of information still to be learned from rainforests,” Karesh says. “Here, we’re starting to get a peek at that.”