Investing

Do You Have FAANGs?

Don’t you love a good acronym? Can you guess what FAANG stands for?

And it’s not what you grow when you are hangry.

I will give you one clue.

They are all American technology companies that have had a huge impact on the way that we communicate, shop and enjoy entertainment.

Still haven’t guessed?

F = Facebook.
A = Amazon.
A = Apple.
N = Netflix.
G = Google.

These five companies have had a huge impact in the way we live our lives. I would struggle to find someone who has never engaged with at least one of these brands.

This year, the value of these companies has been calculated as $2.415 trillion.

Not billion. Trillion.

That amount of money is almost inconceivable, but to give you a comparison, that is about the same size of the entire economy of France.

In other words it would buy enough cheese, wine and croissants for 67 million people.

With the benefit of hindsight, it is always easy to look back and think ‘if only’ I had bought shares in these companies years ago.

And even though these FAANGs are already worth lots of money, they continue to increase their earnings year on year.

Because of this amazing growth, some analysts are speculating that the valuation and performance of these companies can’t continue. They are saying that the FAANGs have grown so big and so expensive, that these companies may have been overvalued and are predicting a bubble.

And we all know that bubbles burst at some point.

But others point out that the field of technology still has so much growth.

If you think about it, Google was created 19 years ago. Facebook was invented 13 years ago. The iPhone has only existed for ten years. Can you imagine what type of technology we will be using ten or even twenty years from now?

Fields like social media, e-commerce, artificial intelligence (AI), cloud computing, machine learning and big data are still being explored and developed.

We can’t predict the future, but we can use lessons from the past to make a good guess. The FAANGs may have some bite for years to come.

Do you have FAANGs?

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