It’s hard to believe that 10 years ago, the FANG stocks became an acronym that is still used today. A few days before my monthly appearance on Mad Money’s “Off the Charts” segment, Jim Cramer asked me to help come up with a topic. I knew Jim had named a group of names he liked the acronym CANDIES, so I played off that. Four high-voltage names (Facebook, Amazon, Netflix and Google) formed the easy-to-remember FANG. Jim did an amazing job of promoting it after that Feb 5, 2013 taping, seen here.
At the time, I had no idea that naming a group the FANG stocks would change the way people looked at stocks and investing as a whole. It created an awareness about groups of companies – either big alpha names or industry-specific names – that can dominate the competition. Those groups have proven to be the types of companies you want to invest in.
FANG stocks are far from finished
Like any company, FANG stocks have had their share of troubles, and two of them changed their names (Facebook to Meta, Google to Alphabet). Nevertheless, their business models have remained solid. Nothing is a sure bet in trading or investing, but they come close.
Netflix has been the best performing stock among the four, racking up a 1,247% gain over the 10-year period (splits adjusted). In second place is Amazon, with a more than 800% gain. If you had bought all four stocks in equal amounts 10 years ago, your composite return would be 780% – four times greater than the SPX 500’s return of 172%. Wow!
Over the years, some analysts have said the group is finished. But would you really want to sell those names? The recent earnings reports from Netflix and Meta pushed those composite gains higher. While their bottom lines were not great and growth was anemic, they did provide strong guidance for the future.
If history is our guide, we should continue to own these four names for years. These stocks will roar once again.