With the “FANG” trade getting long in the tooth, so to speak, Wall Street analysts are now scrambling to formulate new acronyms to accommodate the most robust names in Big Tech today. FAANG, FAAA, FAAMG and now FANTASY have been brought forward adding companies like Microsoft, Tesla and Nvidia to the original FANG Fab-Four of Facebook, Amazon, Netflix and Google.
As market warning signs so, they don’t get better than this. Widely accepted market acronyms don’t evolve gracefully. They pop. Remember the BRICS (Brazil, Russia, India and China) and NINJA loans – (No income, no job)?
What most investors miss is that universally understood and enthusiastically embraced acronyms reflect peak sentiment. They are a market narrative boiled down to its most simplistic and easiest to grasp form. Repeated over and over and appearing everywhere, they are cognitive ease at its best. Like pieces of sea glass, all of the rough edges have been worn away over time and everyone can hold them.
In my book