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

The Dot-Com Bubble in 1 Chart: InfoSpace

With all the recent talk of a new bubble in the making, thanks in part to the Yellen Fed's continued easy money stance, I thought it'd be instructive to revisit our previous stock market bubble - in one quick chart.

So here's what a real stock market bubble looks like. 

Here's what a bubble *really* looks like. InfoSpace in 1999-2001. $QQQ$BCORpic.twitter.com/xjsMk433H7
— David Shvartsman (@FinanceTrends) February 24, 2015
For those of you who are a little too young to recall it, this is a chart of InfoSpace at the height of the Nasdaq dot-com bubble in 1999-2001. This fallen angel soared to fantastic heights only to plummet back down to earth as the bubble, and InfoSpace's shady business plan, turned to rubble.

As detailed in our post, "Round trip stocks: Momentum booms and busts", InfoSpace rocketed from under $100 a share to over $1,300 a share in less than six months. 

In a pattern common to many parabolic shooting stars, the stock soon peaked and began a…

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL! 

Please bookmark our new web address at Financetrendsletter.com

Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner.  



Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead!

As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter. You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter). 

Stay up to date with our real-time insights and updates on Twitter.

Moneyball: How the Red Sox Win Championships

Welcome, readers. To get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter.

The Boston Red Sox won their fourth World Series titleof the 21st century this week.

Having won their first Series in 86 years back in 2004, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it?

Quick background: in late 2002, team owner and hedge fund manager,John W. Henry(with his partners)bought the Boston Red Sox and its historic Fenway Park for a reported sum of $695 million.

Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship.

This brings us to one of my favorite scenes from the 2011 film, Moneyball, in which John W. Henry (played by Arliss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pitt) over to Boston with an excellent job off…