Show Me Your FAANG’s
I was in Target last Sunday and was surprised to see the Halloween section in all its full gory.
The amount of candy filling the shelves is awesome. Along with all things Halloween.
Is the beginning of September too early for Halloween?
Apparently not. Still, two months to go, I doubt buyers of those 5-pound bags of candy are going to wait two months before the candy goes in a bowl by the door.
In the costume area I found lots of fangs. Not to be confused with FAANG’s.
I might wear fake fangs on Halloween although I am more interested in the FAANG’s in my portfolio.
FAANG is the acronym for Facebook, Amazon, Apple, Netflix, and Google.
Each company is a publicly traded company, meaning you can buy shares of stock in each or all of them.
The FAANG stocks are heavily weighted in the S & P 500 index. Collectively they account for about 20% of the index.
The implication is that the index becomes more volatile based on the performance of five stocks, a reason for concern among some investors.
Let’s take a quick look at each of the companies:
Facebook has 2.85 billion monthly users. It is, by far, the largest social media platform in the world.
Can you guess which country has the most users?
If you guessed the United States you would be wrong by a mere 140 million people.
India has the most Facebook users, 340 million. The United States has 200 million.
• Facebook users by country 2021 | Statista
Social media has become a platform for investment ideas.
Using social media for investing has pluses and minuses.
On the plus side, I like the people who do research before buying a stock. Often they provide thoughtful analysis and enough quality information for you to make an independent decision.
Or encourage you to do some research of your own.
In my view, this is a more balanced approach to the “democratization” of investing.
The minus is the hyped-up mania and “meme” investing.
People with no real experience or knowledge are promoting stocks.
There is the “gamification” of stock investing. These are the people who are not interested in you making money. They are really investing for the short-term hoping you will be the buyer who pays a higher price, and they will make money.
Either way Facebook is still the king.
New investors break traditional mold when investing, says CNBC survey
A report for CNBC breaks down how investors research investment ideas. The report looks at individuals who invested before 2019 and individuals who invested after 2019.
“Social media also plays a big role for new investors. More than a third said they used social media to research investment ideas, compared to 15% of those who began investing in 2019 or earlier. On the flipside, only 9% researched investment ideas through direct discussions with a broker or financial advisor, compared to 29% of the more seasoned investors.”
Here’s a thought. You can invest in social media! Or invest in the companies you use the most.
Facebook. If you use Facebook every day, wouldn’t you want to OWN a piece of the company?
Amazon. Ever used Amazon? Bought anything on Amazon? Do you look forward to an Amazon package greeting you at the end of the day?
Apple. iPhones, iPads, Macs. Do you buy or use ANY products or services from Apple?
Netflix. It’s scary movie season. Do you have a subscription to Netflix?
And finally:
Google. Is there anyone among us who has NOT used Google ?
To Google: “I googled, you googled, we googled, they googled” Everybody googles.
Instead of googling investment ideas why not invest in Google ?
Just out of curiosity I wanted to know how much it would cost to buy one share of stock in each of the FAANG companies.
Below are the closing prices as of September 23, 2021
- Facebook : $345.96
- Amazon: $3,416.00
- Apple: $146.83
- Netflix: $593.26
- Google: $2,824.32
Total: $7,326.37
Okay, that could be expensive if you are starting out.
You could buy the less expensive stock, or buy a partial share of each stock.
Remember, when you buy shares of company, you become an owner of the company.
Another option is to buy a mutual fund or exchange traded fund that has FAANG stocks in the portfolio. You won’t be an owner of the companies but in investment parlance, you have “exposure” to the companies.
The point is that investment ideas can come from anywhere.
For me, it was looking at the Halloween department at Target and thinking of FAANG stocks.
Full disclosure, I do own shares in each of the FAANG companies.
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