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The FAANG Market Is Fading

88 pointsby woldemariamover 3 years ago

13 comments

Retricover 3 years ago
“So, to create a more useful comparison point, we&#x27;re excluding those three years from our long-term average.”<p>Sure, look at a few years while excluding ~1&#x2F;4 of the data and I am convinced your analysis is just great.
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sofardover 3 years ago
I don&#x27;t know if &quot;% of total returns&quot; is a fair metric. As a percentage of market cap, they still dominate the S&amp;P500. Not to mention every asset manager has to own them otherwise they risk looking stupid. They&#x27;re today&#x27;s bluechip, for better or for worse.
jstx1over 3 years ago
Saying that they&#x27;re fading because they grew more last year is oversimplifiing things just to get a headline.
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Incertoover 3 years ago
Shouldn&#x27;t we be calling it MANGA now?
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inshadowsover 3 years ago
Can someone help me translate<p>To measure just how concentrated stock returns have been, we calculated the impact that the 10 largest stocks have had on the Morningstar US Large-Mid Index, which essentially tracks 90% of the stock market. We took the 10 largest stocks at the end of each year going back to 2009, and using Morningstar Direct&#x27;s equity attribution tool, excluded their returns from the index&#x27;s performance and compared that number with each year&#x27;s total return.<p>into mathematics so I can interpret the percentages in the table below?<p>Why do people involved in finance hate mathematics so much? Is it obvious to everyone?<p>EDIT: I think it is: returns_of_index_per_year - returns_of_index_minus_returns_of_top_N_stocks_per_year<p>EDIT 2: What does &quot;Cumulative Market Impact&quot; mean? When you google it or &quot;Market Impact&quot; it gives bunch of unrelated measures... Finance jargon is such a mess.
ferdowsiover 3 years ago
It&#x27;s beyond time to retire the FAANG acronym. At one point it signaled a group of companies that were dynamic players that were (to various extents) disrupting the existing business landscape. Now these companies are incumbent behemoths asking to be taken down in the same manner.
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ultrasounderover 3 years ago
FAANGMULATAD-FacebookAppleAmazonNetflixGoogleMicrosoftUberLyftAirBnBTwitterAlphabetDropbox Attribution- Blind
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chris_wotover 3 years ago
It&#x27;s a MAANG market now, I guess. Can&#x27;t wait for it to be the AANG market. Or perhaps the NAGA or NAAG market. Perhaps the GAAN market might be inappropriate.
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mro_nameover 3 years ago
nice, that my lightning talk at 35c3 (2018) turned out so effective: <a href="https:&#x2F;&#x2F;media.ccc.de&#x2F;v&#x2F;35c3-9566-lightning_talks_day_2#t=3337" rel="nofollow">https:&#x2F;&#x2F;media.ccc.de&#x2F;v&#x2F;35c3-9566-lightning_talks_day_2#t=333...</a>
cblconfederateover 3 years ago
Maybe that s why Elon, Nadella, Bezos are selling lately
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DeathArrowover 3 years ago
Time to short FAANG and TSLA. :)
adventuredover 3 years ago
AAPL $2.65t, MSFT $2.47t, GOOGL $1.89t, AMZN $1.72t, TSLA $1t, FB $853b, NVDA $764b<p>Right now that&#x27;s reasonably big tech in terms of publicly traded US tech companies. Everybody else is a long ways down.<p>So.<p>BRK $621b, JPM $476b, JNJ $419b, PG $362b, DIS $265b, KO $231b, VZ $215b, MCD $186b, BA $116, CAT $107b, MMM $100b<p>All of those companies combined will fit inside Apple&#x27;s valuation at the rate things are going. And just about every old-line blue chip with a consequential market cap is somewhere between pathetically slow growth and stagnant. Meanwhile big tech is still expanding. And you can replace any number of those companies with others, whether HD, or AT&amp;T (T) or WMT or LOW or PEP or TGT, with much the same outcome.<p>This article is, you guessed it, laughably, embarrassingly, false.<p>Big tech will keep getting bigger in relation to most of the other quasi rotting blue chips.<p>There is nothing coming up that will prompt a massive expansion of the old blue chips such that they&#x27;re going to retake ground against big tech (not unless one believes all of big tech will be smashed to pieces by anti-trust - never gonna happen). The China boom is largely over, which means these old blue chips can&#x27;t look forward to sucking off of that market any longer and there is no next China (nothing remotely comparable to that extreme of a boom). Are railroads and airlines going to start suddenly growing at 50% per year? Of course not. Productivity is about to skyrocket? Of course not. The US is going to suddenly take over the world&#x27;s steel production? GM and Ford are going to put all of Germany and Japan&#x27;s automakers out of business and every human on the planet is going to buy an extra vehicle? For no apparent reason companies like 3M are going to start growing rapidly? Pepsi and Coke are going to sell 2x the sugar water in an era that is turning against their core products (check out how pathetic Coke&#x27;s business has been over the last 5-10 years)? How about big pharma, PFE&#x27;s ass got saved by Covid, at least temporarily, as the vaccine threw them a bone. McDonald&#x27;s, after so many years of stagnation (and given their saturation), is suddenly going to become a nice place to eat and start selling 2x the fries and burgers? Of course not. Americans are going to start buying a lot more Kraft box pasta or Heinz ketchup or Oreo&#x27;s from Mondelez or soup from Campbell&#x27;s? Of course not, it&#x27;s all slow growth garbage. Campbell&#x27;s is on a rocket ship to becoming a juggernaut $300 billion soup empire! Yeah, bullshit. And so on it goes.<p>For most of these companies, if they&#x27;re lucky, they&#x27;ll have just enough pricing power to keep up with dollar debasement and not lose real ground over this decade. More likely some of these garbage companies like MCD or KO will lose 1&#x2F;4 or more of their real business to USD erosion as their customers can&#x27;t (and won&#x27;t) pay $5 for a 20oz soda or $6 for fries. These companies have struggled for many years to gain ground in real-terms prior to the recent wave of inflation, it&#x27;s only going to get more difficult for them (consumers will be trapped in hell between higher prices and eroding real household purchasing power, and that&#x27;s all assuming household debt doesn&#x27;t get more expensive (it&#x27;s historically cheap)).<p>If anything, the old blue chips will rot further and big tech will gain even more ground, over the next 3-5 years. Even if this market declines, relatively speaking big tech is still likely to take ground over time against the rest of the market.
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neilo40over 3 years ago
FAANG is dead. Long live MANAMA! (Microsoft, Apple, Netflix, Alphabet, Meta, Amazon)<p>Silly, I know but I’ve always wondered why Microsoft was left out of the original 5
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