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Warren Buffett Warns of Bubble

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Warren Buffett Warns of Bubble

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SAN FRANCISCO - DECEMBER 11: Billionaire investor Warren Buffett talks as Democratic presidential hopeful Hillary Clinton listens onstage at a fund-raising event December 11, 2007 in San Francisco, California. The junior U.S. senator from New York was joined by Buffet, who has not endorsed Clinton and has also hosted a fundraiser for Clinton's chief rival for the Democratic nomination, Sen. Barack Obama of Illinois. Buffet has called both candidates "presidential." (Photo by Justin Sullivan/Getty Images)

Warren Buffett may not be the biggest user of Facebook and Twitter.

But one of the world's richest men does know a thing of two about the value of a dollar and when he believes the valuation of some of tech's hottest companies is overvalued, it's news.

Buffett issued a warning this week that he believes a bubble is building in the social-networking world.

"It's extremely difficult to value social-networking-site companies," Buffett said, according to  Bloomberg News. "Some will be huge winners, which will make up for the rest."

The billionaire investor and CEO of Berkshire Hathaway didn't name specific social-networking companies he was concerned about.

But with sites such as Facebook, Twitter and Zynga drawing valuations in the billions, other sites have launched to try to follow in their footsteps.

Does Buffett's warning indicate another dot-com crash is in the Silicon Valley's future? Not likely since he says he believes some of the companies will survive and make up for the overvaluation of others.

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