FAANG Stocks Could Lose Big According to Experts

cageymaru

cageymaru

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The FAANG stocks known as Facebook, Apple, Amazon, Netflix, and Google (Alphabet) have been the darlings of Wall Street for years. Now they are coming under fire Monday as they have lost $185 billion in value over the past 2 sessions. Larry McDonald from 'The Bear Traps Report' predicts a 30% to 40% downside on the FAANGs. These particular stocks are so important that $6 trillion has come into passive management and all of that has been invested into the FAANG stocks.

A 30 percent decline would turn Apple and Alphabet lower for the year. Facebook is already negative for 2018 and currently trading in a bear market having fallen more than 20 percent from its 52-week high. Netflix is close to a bear market, but would still be positive for the year if it fell 30 percent from current levels. Amazon would also remain higher for 2018, but would be pulled into a bear market.
 
To be clear the bulk of that was FB (Last Thursday was 217 to 174 drop).
 
"Do stupids things, win stupid prizes" applies to every single company listed.
 
The downside of gaining value quickly, is you may end up with a (relative) few people owning a significant amount of very valuable stock. Smart investors will sell some portion (or all, if they think there is no more upside to the stock) of that when weakness is apparent (to reinvest elsewhere), and that can cause some serious turbulence if it includes those wealthy few.
 
That's ok. I'll keep buying. I love me some Amazon and Microsoft. Own both cloud platforms as companies flock to them in droves. I'll keep going to the bank.

When the market is dropping across a sector like this, that means some of them are on sale who had nothing to do with it. Buy the dip.
 
But as the say goes, Nothing of Value Was Lost. And the double-meaning is: the money taken from selling these stocks is rotated into other stocks.
 
I personally think it’s a buying opportunity. Microsoft and Google had great reports. Facebook will probably bounce back since most people don’t actually care about their privacy, aside from constantly complaining about it on social media (lol, irony), it seems most are more than happy to give it up to look at cat videos.

Netflix and Amazon have valuations that are silly at this point, but Apple, Microsoft, Google, and Facebook all have very reasonable P/E ratios based on their respective growth rates.
 
HockeyJon said:
I personally think it’s a buying opportunity. Microsoft and Google had great reports. Facebook will probably bounce back since most people don’t actually care about their privacy, aside from constantly complaining about it on social media (lol, irony), it seems most are more than happy to give it up to look at cat videos.

Netflix and Amazon have valuations that are silly at this point, but Apple, Microsoft, Google, and Facebook all have very reasonable P/E ratios based on their respective growth rates.
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That's exactly why the experts will tell you to sell.
 
IcePickFreak said:
That's exactly why the experts will tell you to sell.
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The entire Wall Street analyst roster more or less exists to get clients access to corporate boards; they’re effectively useless to everyday investors. The amount of misinformation on the street is unreal. It’s sad how many games are played at the expense of everyday people.
 
If it's a passive fund he's worried about, why would they sell individual securities this year after a price drop? Think about 20 years from now, etc.

And now AAPL shot up.
 
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