Nothing like Twitter to keep us honest and humble. I like to look at it not just because I am a masochist of the first order who loathes my very being but also because it is helpful in seeing what people are thinking.
This morning I got a good one. A young investor complained that I had buried him in FAANG and he had lost all the money the government had given him because of me.
Now, take out the personal responsibility I am supposed to bear for my nefarious act of recommending FAANG since I created it and then augmented it many years ago. Forge the ad hominem nature of accusing me of stealing federal candy from a stock babe in the financial woods and let's deal with the matter head on by examining how FAANG will do in the new world of a vaccine with 90% efficacy when it would have been enough to get 50 or 60.
First, before we break them down let's analyze the vaccine situation. I pursued the prospects of getting the vaccine through my doctors yesterday -- I don't want the Jim Cramer rate any more than Aaron Rodgers or Patrick Mahomes rate at State Farm. I learned that even as I have contacts at all the major hospitals in the city and have done a lot of charity work, I would be lucky to get two shots by the spring. I can only imagine when others can or want to get them. So keep in mind you have to go through two earnings periods before you get to a potential promised land.
So how will they do? What happened or is happening to these stocks if the pandemic winds down?
Facebook (FB) ? We learned that Facebook was a fabulous place to get business for your online presence. Given that it will be a long time before we all feel safe that will just accentuate. Is Facebook as good as Roku (ROKU) to get ads? Yes for direct response, not sure for consumer packaged goods. I think it's a push for Facebook and that it probably has no more than 50 points downside, which would take it near where it was when the pandemic began. I know that sounds like a lot but not in this market.
Apple (AAPL) I think is simply a much better company under Biden than it was under Trump. You want to take China off the table and you want to put 5G on the table. We know from Skyworks (SWKS) that orders are through the roof. We know that the stock finally has a tech model. Just as we found out that there will be a vaccine, we also found out that there will be a new president who is more certainly in league with the Chinese. Outright positive.
Amazon's (AMZN) arguably the toughest. It was more than one thousand points below where it was before the pandemic, which makes it per se overvalued for now. We know this quarter is a wash because of health concerns. If I were a hedge fund I would most definitely sell this stock. It's simply way too vulnerable even if it has a terrific holiday season. Totally vulnerable.
Netflix (NFLX) is very tricky. People didn't like the last quarter. I don't think they will like this quarter any more. Like the selling in the gaming stocks, Netflix gets hurt because of the pent-up desire to go somewhere. I would put Netflix in the camp of a stock that's bushwhacked by a 90% vaccine. It simply isn't worth what it is selling for and has a lot quicksand under it.
Alphabet (GOOGL) ? This is the one to buy. It had a fabulous quarter without its most important advertisers, the travel and leisure sector. YouTube is, at last, being monetized as if it is now run by someone who gets it. The cloud has a hero in Thomas Kurian, whom I have met. He is a force of nature. I would buy this stock aggressively if it came in.
So, Apple and Google great, Facebook, a push, Amazon and Netflix overvalued. Anyone who is nimble can sell the latter two but I would put that money in the former two. FAANG, alas, may no more, at least for now.