Who needs profit at a time like this?

The last 10 days or so have seen yet more acres of rainforest disappear under the weight of the bricks-and-mortar versus clicks-and-mortar debate which rages even more violently every minute.

The cheers when the Nasdaq reached ever higher were only matched by the jeers when it dropped 2.8 per cent on Monday, it is the fourth worst fall ever - not that it was much comfort to anyone holding either industrials or technology stocks since the industrials have been wiped so much already anyway.

The favourite story last week was the new economy stocks like Baltimore entering the Footsie 100 at the expense of old economy stocks like Imperial Tobacco (not that I'm sorry to see that one go!). Most reporters scratched their heads as they tried to explain that market capitalisation had nothing to do with making a profit. Jeremy Paxman even got into the act, inviting Nicola Horlick to explain why on earth anyone would buy a stock when there was no chance in the foreseeable future of them turning in any money whatsoever, and why you'd pay a fortune for it instead of sticking with Allied Domeq. Ms Horlick explained very simply to a clearly irate (but isn't he always) Paxman, that fund managers had absolutely no idea which technology companies were going to be successful in the future, but you needed to buy a good spread of them so that, among the dross, one or two pearls would be found.

So the scattergun approach of the professionals is partly to blame for the rise of these stocks - nobody knows enough about most of them to make any value judgment but are buying them just in case. And the trouble is that, since they're having to evaluate them so differently from old economy stocks, none of the professionals is 100 per cent comfortable with what he has.

This is why they are so keen to take profit from time to time and why they are so jumpy when markets tick downwards, even temporarily. Everyone is afraid that the emperor's new clothes are as non-existent now as they were in the fairy tale.

And the only people who can be truly sure that the fairy tale has worked for them are those who set up their sites and their companies and sold them to uncertain investors at vastly inflated prices.

Last week the investors' guru, Warren Buffett, whose Berkshire Hathaway fund has been a consistently high returner over the past 30 years, apologised to stockholders when announcing that earnings had dropped 42 per cent in 1999, leading to a 20 per cent fall in the stock. Mr Buffett blamed himself entirely for the fact that this was the worst performance of his life and that it was a rotten performance relative to the S&P index too. In 1990 the cost of a share in his fund was $5,000. In 1998 it was $81,000. Last Friday, the shares were trading as low as $41,300 although they rebounded when Mr Buffett said that he would buy them back himself at $45,000.

Mr Buffett has been a bricks-and-mortar man, sticking with low-tech even last year and the results were a foregone conclusion. People were prepared to pay a premium for Berkshire Hathaway when a knowledge of old economy stocks was one you'd pay a premium for - its core investments are in companies like Coca Cola, Freddie Mac and Gillette. But when his only exposure to technology is Microsoft - which at this stage is almost old economy! - investors think they can do better themselves.

Meanwhile, plenty of excitement was generated when Riverdeep, an educational software company, issued 36.5 million new ordinary shares which has turned its founder into yet another Internet millionaire. Actually, he's almost a billionaire which is enough to make you weep with envy - I know that people say education is important but its the first time they've put a price on it!

Anyway, lots and lots of people reckon that Riverdeep was massively overvalued, but since there aren't too many Irish techie companies to take a pop at, they scrambled to buy them anyway. Jeremy Paxman and Warren Buffet would have a heart attacks - the company has accumulated losses of $32 million (€33.08 million).

And then there was Proctor & Gamble, ye olde economie stock, which issued a profits warning, fell like a stone and dragged the Dow with it. The interesting thing here is that P&G has sales of about $38 billion and profits of about $3.7 billion. That's billion. In profit. But investors have sent the stock plummeting because the profits weren't enough so that they can buy shares like Riverdeep with losses instead. Of course I know that we're talking about potential in the years ahead here - I've read all the bumpf too. But, will people keep on pushing the share prices higher (which is the only way you're going to make any money because obviously there's no dividend) until these companies finally do make some money? And if most of them aren't expecting to turn in a profit until 2004 or 2005, what sort of multiples are we talking about?

Maybe, of course, it's that there's still a difficulty in quantifying what a tech stock is going to provide. P&G produces all sorts of soaps, shampoos, toiletries and cosmetics which are things we all use, and is a brand leader in this sector. But, paraphrasing Mr Buffet, which companies in the technology field possess a durable competitive advantage?

The falls on stock markets this week reflected Asian nervousness again following a shrinkage in the Japanese economy. Investors didn't like that GDP had fallen by 1.4 per cent when most analysts had predicted a fall of around 0.9 per cent.

And so they sold the stocks that they've made the most money out of - like Sony and Hikari Tsushin.

And there have been a few mutterings about how difficult it will be and has been for the private investor who deals on the Net to sell when the markets are falling.

You can't connect, you can't place your order, you're left holding the ticking parcel! Which is the one sure thing in all of this. But, hey, we're all in it for the long-term, aren't we?