Don’t Fight the FAANGs

Stocks are roaring back to life this week – and the big tech names are leading the way higher once again.

So far this year, the mega-cap FAANGs and other big tech stocks have performed most of the market’s heavy lifting. But even the strongest stocks need a break. Facebook & Friends took a quick summer vacation. We can’t blame them. Who doesn’t need a month off?

But the Nasdaq Composite is back in the driver’s seat. The big tech index jumped 2.6% during the final trading days of August, while the S&P 500 gained just a little more than 1%.

As the FAANG brigade first started to slide back in late July, we noted that the market’s lack of volatility during the first half of 2017 had lulled many investors to sleep. The little jolts we experienced in August slapped some unprepared traders in the face. And we didn’t even experience an actual correction! The market looks ready to roll again after just a few weeks of squishy action.

If you’re sick of hearing about Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN), or Apple Inc. (NASDAQ:AAPL) this year, I have some bad news. These are the stocks that will probably lead the market higher into 2018.

But if had to pick just one of these three names to hold until the end of the year, it would be Facebook.

Full disclosure: I don’t have a Facebook account. Why? Because I don’t care about your status updates or Minion memes.

Of course, I’m in the minority here. Sure, people love to complain about Facebook. But they don’t delete their accounts! Earlier this year, a couple of reports caused a small uproar when it was revealed that users couldn’t block Facebook CEO Mark Zuckerberg, the king of social media.

“Nobody is safe from Zuckerberg’s posts,” Gizmodo reported. “If one of your basic friends shares one of Zuck’s posts, you must read it. There is no way to rid yourself from modern day atrocities like a 16-minute interview with Mark Zuckerberg and Vin Disel, or 30 minutes of Zuck grilling in his backyard.”

To give Facebook some credit, it did fix this little problem and you are free to go about your life without Mark Zuckerberg bothering you. Unless he tracks you down in person.

While you can block him online, Zuck has taken to the streets recently to interact with real Americans. He’ll find you – even if you’re just trying to finish some yard work…

Zuck and yard work

Sure, it’s easy to poke fun at Zuck’s awkward meetings. But we know he’s a cutthroat businessman at heart. We’ve already watched him bury social media upstart Snap Inc. (NYSE:SNAP) this summer. Zuck simply implemented his competitor’s ideas, stepped back, and watched the market newcomer fall to pieces.

SNAP stock cratered as soon as it hit the market. And it’s yet to post a meaningful recovery. The Zuck wins hands-down—and he didn’t even break a sweat.

Facebook shares are quickly approaching all-time highs as we barrel into a new trading month. The stock is up almost 50% year-to-date – and I wouldn’t be a bit surprised if it continued to rip higher into the fall. This is one trend you don’t want to fight…

Sincerely,

Greg Guenthner
for The Daily Reckoning

The Daily Reckoning