Gundlach: Avoid Facebook, Amazon, Netflix, Google At All Costs

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November 16, 2016 7:35am Nasdaq:FB

Nasdaq:FB | News, Ratings, and Charts

In his first webcast following last week’s shocking presidential election, fund manager Jeffrey Gundlach of DoubleLine Capital made a very bearish call on the group of so-called “FANG” stocks.


In case you’re unfamiliar, FANG is an acronym coined by TheStreet’s Jim Cramer a few years back that stands for Facebook, Amazon, Netflix, and Google — four of the biggest and best performing technology stocks over the past five years or so. Analysts and pundits like to group these companies together, despite the fact that they operate mostly in different businesses and their share prices aren’t really correlated.

Anyway, Gundlach first noted that FANGs seemed to have predicted the result of the presidential election, rolling over about a week ahead of Donald Trump’s historic victory. Their downward slide has continued since the election as well, although yesterday saw a nice-sized bounce in all four names.

As for the future, Gundlach wouldn’t touch any of those names, echoing his comments to CNBC a few days ago:

On what to avoid on Trump’s election: “One thing about Trump’s win, there’s something about it [where] people just want something real. They want to see things being made. They want to see policies being changed … which means the financial engineering stocks and the momentum stocks, the FANGs, I would stay away from them in a big way.”

Later he added, “I think the FANGs [stocks] are a bubble frankly.”

Gundlach believes the FANG names are still too expensive right now, and noted that the “fundamental machine” helping the companies disappeared over a week ago.

On what to avoid on Trump’s election: “One thing about Trump’s win, there’s something about it [where] people just want something real. They want to see things being made. They want to see policies being changed … which means the financial engineering stocks and the momentum stocks, the FANGs, I would stay away from them in a big way.”

Facebook Inc (NASDAQ:FB) shares fell $0.42 (-0.36%) to $116.78 per share in premarket trading Wednesday. Year-to-date, FB has still gained 11.98%, but the stock is down more than 10% since the start of November.

FB-2016-11-16


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