Data Sheet—Monday, July 10, 2017

Professional stock-market investors are complaining about "mindless buying," of tech stocks, and I’m having a sense of déjà vu.

I've been covering technology stocks for precisely 20 years now, having come West in 1997 to follow what became known as the dot-com bubble for The San Jose Mercury News. The grizzled veterans of investing always have ways of expressing their disdain for the rubes who buy tech stocks at inflated values. During the bubble the savants on CNBC would talk about "panicked buying." Later the expression FOMO-fear of missing out-gained currency.

The concern is similar but different these days. It's not merely that companies like Amazon and Netflix are grossly overvalued by any traditional metric. (They have been for years.) It's also that investors have so thoroughly lost faith in stock pickers that they've thrown in with index funds and ETFs, which in turn drive investments in the heaviest-weighted stocks in the indexes, including Amazon and Netflix.

Two things are certain here. Passive investing will continue to make fools of the humans, fallible as they (we) are. Intrinsic value will catch up with the high flyers eventually. The reason Amazon and Netflix, for example, persist is that their businesses persist. For every one of them there are 10 Sun Microsystems, Netscapes, EMCs, and so on filling up the dust heap of inflated tech stocks.

Incidentally, at Fortune's Brainstorm Tech conference next week in Aspen we've boldly labeled a panel "The Smart Money Speaks," and it features three accomplished investors (not stock pickers): Kirsten Green of Forerunner Ventures, Anton Levy of General Atlantic, and TPG's David Trujillo. Inflated valuations are certain to be on the agenda.

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I enjoyed this column by Timothy Egan, currently my favorite New York Times columnist, musing about the impact of the iPhone 10 years on. Yes, it is has changed the world. But how much and in what way? Discuss.

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It has come to my attention that the estimable author George Anders will release his next book next month. It's a defense of studying the humanities called You Can Do Anything: The Surprising Power of a 'Useless' Liberal Arts Education. Pre-order a copy here.

Have a good week.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

Spending money. Happy July 10, or as it's known to online shoppers, Amazon Prime Day. The mega-retailer and future owner of Whole Foods has tons of deals on offer, including 50% off its Echo speaker and speech-powered digital assistant. Google appears to be making a counter-move, putting its Google Home speaker and a Chromecast dongle on sale at eBay for just $99, down from $164.

More spending money. The Federal Aviation Administration is offering refunds to drone hobbyists who paid a $5 dollar fee to register their drones. In May, a federal appeals court struck down the rules requiring registration, so drone owners can now download a form from the FAA web site and mail it in for the refund (and to be deleted from the database).

Bad idea. President Trump backed off his idea to create a joint cybersecurity effort with Russia. After sharp criticism ("It's not the dumbest idea I have ever heard but it's pretty close," Senator Lindsey Graham said), Trump tweeted it would not happen. The fact it was discussed "doesn't mean I think it can happen. It can't," the president wrote.

Just a peek. Elon Musk tweeted out some pictures of his upcoming Model 3, the affordable Tesla electric car for the rest of us, on Sunday. The pictures marked the first models rolling off the production line, Musk said. Deliveries to customers are scheduled to begin July 28.

Smaller slice of bigger pie. Apple's iTunes video business is still growing, the company says, but it's share of the overall market has been about cut in half, the Wall Street Journal reported citing Hollywood sources. Sales and rentals of digital movies increased 12% to $5.3 billion last year, with Apple's cut estimated at 20% to 35%, down from 50% a few years ago.

Much smaller slice of bigger pie. A group of newspapers, ranging from the New York Times and Washington Post to the Minneapolis Star Tribune, are seeking an exemption from antitrust laws to negotiate collectively with Google and Facebook. The online ad giants have too much control over the market, squeezing out room for others like the newspapers, the group says.

FOOD FOR THOUGHT

Some enterprising high school students have discovered a new way to cheat on their math homework, and it's almost impossible to detect or stop. They're using the online equations solver at Wolfram|Alpha to get not just the answers to problems, but even the individual steps needed to reach the answer, so they can still "show their work."

Teachers are appalled but maybe, say some experts, the kids have it right. Computers and the Internet make available knowledge that previously had to be memorized, says David Helfand, a professor of astronomy at Columbia University:

The notion of education as a transfer of information from experts to novices-and asking the novices to repeat that information, regurgitate it on command as proof that they have learned it-is completely disconnected from the reality of 2017.

BEFORE YOU GO

Are we tired yet of the debate over whether tablets like the iPad can replace your laptop? I am not. With Apple's latest "Pro" iPad hardware and some of the multi-tasking improvements coming in iOS 11, it's getting closer than ever. Longtime Windows watcher Paul Thurrott weighed in over the weekend after spending a month relying on a 10.5-inch Pro model. It's worth a read, even if, as he concludes:

No, the iPad Pro is not a laptop replacement. Except, of course, that it is.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.

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