FANGS
Exposed!
FANGS are in the news. But what are FANGS? Today on www.preciousmetalsinvesting.com Ted Sudol and Paul Mladjenovic, author of Stock Investing for Dummies, High Level Investing For Dummies, Precious Metals Investing For Dummies and High Level Investing For Dummies discuss FANGS.
FANGS stand for Facebook, Amazon, Netflix and Google. At today’s high prices are they a good investment? A lot of boosters of FANGS will say that these are the stocks of the future and to some degree they are right. They will say that it is all about market share. However the important question to ask is what is the cost of gaining this market share. If you promote sales to the point that your expenses exceed the revenue you don’t have a healthy business model if that goes on for too long.
An important piece of data to look at is the price to earnings ratio. As recently reported although Amazon’s sales were at record levels they were only making a tiny sliver of profit. Whenever you are looking at a stock in a slowing market a P/E ratio of over 900 as Amazon’s was a few weeks ago is an extreme danger sign.
At the hyper heated levels of the Fangs investing in the precious metals makes them a bargain. Twitter for instance doesn’t even make a profit. So what is to justify the stratospheric level of the FANGS prices at these astronomical P/E ratios?
The volatility and drops in the stock market indicate that there are some dangerous economic waters ahead. here at https://preciousmetalsinvesting.com we always think it is prudent for investors to diversify and part of that diversification should be investing in the precious metals. It seems even more important today.
If you are listening to this interview welcome to the Precious Metals Investing podcast. It’s now available on itunes. You can subscribe here:Subscribe to the Precious Metals Investing podcast at iTunes