And just like that, the only game in town, the “FANGS” are back, at least for today.
Some random thoughts on this quartet:
I read the bulk of this year’s return is getting funneled through the current four horsemen of Facebook, Amazon, Netflix and Google. So lots of traders are long the FANG and short the rest or hedging with index puts or futures?
Did I read this correctly? Druckenmiller went heavy into Facebook and Amazon? It’s almost like he wants to relive the last war but really he’s not, these companies are operating on built out “stack” of hardware and software which wasn’t quite as developed 15 years back, which has enabled Facebook to exist and spread out like crazy and for Amazon to keep on not retaining its earnings after it has hoovered up every old brick and mortar dollar on planet retail.
I have no idea if Facebook will be able to completely pivot into messenger and make money on it. I have no idea if it becomes Zuck’s walled video streaming garden which puts the necks of fellow FANG members under its sneakers as people begin to steal, share and stream monetized images under FB’s stately pleasure dome. Speaking of the last war metaphor, the browser wars have long been over. The current battle is for your attention on your hand computer, via the “messenging app”. It’s all been repurposed from middle school sexting to Chinese capital flight investors buying and selling real estate thousands of miles away in shiny steel and glass piggybanks in New York and every other western metropolitan safe haven. Aside from that be prepared for “how to” success stories on making money via marketing on Facebook.
Google is alphabet but will it be alpha? I don’t know if Joshua Brown is right. I liked his tweet about the search engine as the money printer and the rest as the furnace to burn all that lovely endless money. I sure hope not, I plan to park money into shares at the next opportunity for a decline worthy of a Yahoo.
Amazon is every damn retailer I used to go to. It might become my local pizza shop too. God help some of you more adventurous types if they make deals with the Japanese manufacturers of lifelike doll companions and embed AI in them, you’ll never leave for the mall ever again. And God help us all if it pivots into an age of buy backs and dividends. Be careful what you wish for.* By then Amazon will be a dowager that’s lost its looks and an investor base tolerant of no earnings all in return for the “first Trillion dollar company” El Dorado narrative.
*Just look at IBM and all those lovely buybacks. (I watch IBM from a cloud provider perspective. It used to be called “CTR” for those old machines its used to make hence “Calculating Tabulating” but it kept evolving. We’ll see if he Oracle of Omaha’s money management hires will be correct in their investment.)
Netflix is eating up HBO’s space but watch out for the unbundling/cord-cutting. I’m personally hoping they make a deal with all the sports channels. If that happens, you buy the cable companies as just fat data pipes and they’ll stop doing “3 in 1” sales of telephone, tv, etc. But being a “studio” is a risky proposition. You either end up with content worthy of Game of Thrones or you end up with content that goes straight to digital broadcast TV (sans the digital decoder). Throw Amazon in with this too since they have a studio as well pizza delivery drones. Be prepared for Netflix and Amazon Studio stars as Youtube “celebs” might become yesterday’s news-swipe and jump ship.
YOU KNOW WHEN I would think of selling? Magazine covers. You know what I mean. But that’s print and no-one reads that so maybe we’ll all be okay.
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