By Mitchell Anthony
There is a reason why Facebook is the first name in the FAANG!
Facebook has become one of the most widely known companies in the world for many reasons. It has led the evolution of social media and its tools for sharing ideas, personal views, political views, pictures, and just about everything else has been widely used by Generation X, the millennials, and now the baby boomers. Facebook has learned how to monetize their products as their clients are highly sought after by anyone with something to sell. Facebook’s revenue for advertising has been growing hyperbolically and the outlook remains fantastic. Facebook has also been monetizing information they gather about what their clients do on their platform, what they share with friends, and what sites they visit. All of this has been done legally and with authorization from the clients. However, what they are doing here has been widely misunderstood by regulatory bodies and the media and anyone seeking to make a story that will sell newspapers.
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By Mitchell Anthony
The equity markets retreated as selling beget more selling and fear beget more fear in the fourth quarter of 2018. This dramatic change of course for the equity markets in 2018 was reminiscent of similar market action in 2014 and 2015 when weakness in global economic conditions emerged. However this correction was sharper with most indices falling 20% or more, compared with 10% or more corrections in 2014 and 2015. Was this just a big bump in the road to much higher levels for US equity markets? Or has the path for equity markets already reached its summit because recession lies on the horizon. Most investors have found themselves asking these questions over and over recently. While none of us know what lies ahead, trends in economic data point to further growth for the US economy as the impact from the trade war becomes more of a distraction to economic conditions than a game changing event. Further this is all occurring while inflation and central-bank policy mostly remains benign. This environment of continued steady growth will ultimately lead to higher equity prices particularly those equities that are insulated from the problems in manufacturing and highly cyclical industries. As the equity market continues on its path of recovery the leadership in the equity market will likely to take on a different twist as investors avoid the US sectors and foreign markets that are directly impacted from the trade war that is likely to persist for the short to intermediate term. This is a difficult time to own deep cyclical industrial names but contrarily a great time to own companies experiencing organic growth occurring with innovation and development of great products.
We have had tremendous alpha for the last few years based upon our ability to identify where investors were going early. We owned the fang long before most people knew what the fang was. The acronym for the market leaders in 2019 will be a different version of fang, but will clearly be areas insulated from global trade and benefiting from organic or secular growth.
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