Are The FANG Stocks Dead?

Are the FANG stocks dead? Or, to be clear, are the MANNGMAT stocks dead? Of course, we are talking about the big technology heavyweights of Meta (FB), Apple (AAPL), Netflix (NFLX), Nvidia (NVDA), Google (GOOG), Microsoft (MSFT), Amazon (AMZN) and Tesla (TSLA). According to a recent article via the WSJ, such seems to be the case. To wit:

“Big technology stocks are in the midst of their biggest rout in more than a decade. Some investors, haunted by the 2000 dot-com bust, are bracing for bigger losses ahead.

Some investors say the decadelong era of tech dominance in markets is coming to an end.”

In the short-term, it certainly seems that value investors, after more than a decade of underperformance, are finally taking a victory lap as the long-awaited resurgence occurs. The value trade was something we wrote about extensively in 2020, as many believed “value investing was dead.”

“Such certainly seems to be the mantra as investors continue to pile into growth stocks while rationalizing valuations using methodologies that historically have not worked well.”

The chart below shows the annual performance difference between the Vanguard Value and Growth Index funds. The surge in value in 2022 is unsurprising as investors look for a “safe place” to hide as markets stumbled.

FANG, Are The FANG Stocks Dead?

The brief periods of outperformance of value versus growth occurred during rough patches in the financial markets. However, as the following chart shows, there is a massive performance gap between value and growth.