Don’t Get Wedded To A Meme
In 2013, CNBC’s consummate showman Jim Cramer coined the first of a memorable series of shorthand references for the group of tech leaders: FANG, then comprised of Facebook (now Meta), Amazon, Netflix, and Google (now Alphabet). The grouping changed over the years, from FANG to FAANG to FAAMG (a little hard on the tongue, that one) to its most recent incarnation, “the Magnificent Seven.” This most recent group includes Amazon, Alphabet, Apple, Meta, Microsoft, Nvidia, and Tesla. In this incarnation they have prompted analysis that strips them out of the S&P 500 and contrasts them to the “S&P 493.” It helped that during 2023, visible robust earnings growth in the index was largely confined to these leaders.
Since then, there have been some changes and missteps, prompting us to make this observation: don’t get too wedded to a meme or a heuristic, even if it’s catchy.
Whatever the current leadership, however proverbial and exciting, it’s prone to an unceremonious rejection from the club of cool. We have noted this of late with Alphabet, Apple, and Tesla.
Bloomberg’s Magnificent Seven Index. While the chart may suggest it is motoring along, there is distinct misfiring in three of its cylinders.
Woes for the Biggest of the Big
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