Skip to main content

Google (GOOG) vs. Apple (AAPL) + "FANG" stocks

Google is a household name and one of the preeminent stocks in the minds of individual investors, but it isn't the biggest tech winner of this current bull market. So is the best performer America's favorite tech stock, Apple?

Here's a monthly performance chart of Google (GOOG) vs. widely-owned Apple (AAPL) and the rest of the so-called "FANG" stocks: Facebook (FB), Amazon (AMZN), and Netflix (NFLX). Click to enlarge the chart and compare gains.

Google Apple Facebook Netflix Amazon stock chart FB AMZN GOOG NFLX AAPL


GOOG (shown in price bars) is up 320% from the March 2009 start of this bull market. Meanwhile, FB, which only IPO'd in 2012, is up 250%. AAPL (shown in light blue) is up 675%. AMZN (in green) is up 800%, while NFLX (in blue) leads the pack by a wide margin, up 1,860% since 2009.

Now that FANG stocks have replaced the .com bubble's "Four Horsemen" of tech (Microsoft, Intel, Cisco, and Dell), does that mean we just buy this new basket of tech leaders and hold on forever (or at least until retirement age)? 

Well, here are a few problems with that approach. So consider these points so you don't get burned.

1) The new tech leaders, like the "Four Horsemen" of old, are likely to stumble or be thrown from their perches at some point. Tech is at the leading edge of capitalism, and each company's fortunes can shift rapidly. Today's leading stock is often tomorrow's punch line. 

Remember IBM, DEC, Commodore, Yahoo, GeoCities, JDS Uniphase, or Research in Motion?  

2) Once a group of stocks is tied to an acronym, as with FANG stocks, it tends to indicate mass acceptance of an investing theme. Once something becomes that popular, you'll know that this is an idea being marketed and heavily sold to the public (and bandwagon hopping fund managers). Increased buying pressure may help fuel the advance of these stocks, but at some point in the not too distant future, who is left to buy them?

Prior leading stock themes/fads included the "Nifty Fifty" of the 1970s, the TMTs and "Four Horsemen" (and later, the "new four horsemen") of the '90s and early 2000s, and the BRICs or emerging market giants of the 2000s. These stocks were all eagerly snapped up in their heyday, but their peak to trough performance left many "buy and hold" stockholders burned. 

3) It is a good idea to buy stocks in an uptrend, especially in the earlier stages of an uptrend. We are now in the sixth year of this bull market. Right now, the leading big cap tech names are among a very small group of strong stocks leading the market higher. It's getting narrow and windy near the top of the mountain. 

Final point (note of caution): Holding popular stocks through mania peaks and ensuing downtrends, or worse, adding to losses and buying more in an effort to "average down" can be a recipe for disaster.  

Subscribe to Finance Trends by email or get new posts via RSS.  You can follow our real-time updates on Twitter and StockTwits. 

Popular posts from this blog

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Slate profiles Victor Niederhoffer

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li...

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4. ...