The FAANGs Are Not Even Tech Stocks!

JC Parets
December 14, 2020

I'm not sure when this happened. When did they start grouping any company that uses a computer into the Technology Sector?

First of all, 80% of the FAANG stocks represent a ZERO weighting in the Technology Sector. ZERO.

Facebook and Google are in the Communications Index, together representing approximately 45% of that sector. Combined, $FB & $GOOD represent ZERO percent of the Technology Sector. Netflix $NFLX accounts for another 4% or so Communications, and again, a ZERO weighting in Tech.

Furthermore, Amazon represents approximately 21% of the Consumer Discretionary Index. When you look at the Technology Sector, you'll find that $AMZN has a ZERO weighting.

The latest version of journalists grouping any company that uses a computer into the "Technology Sector" is Airbnb and DoorDash. Neither one of these are in the Tech sector, but instead are both in the Communications Index. Together $ABNB & $DASH represent a ZERO weighting in Tech.

Meanwhile these are the fairytales they feed you...

I point this out not to pick on WSJ or BI. I feel like they all do this.

But why though?

Why do they group everything into Tech?

When it's absolutely not true.

Is it stupid? Should these stocks be in the Tech sector? Maybe.

But They're Not. And that's my point.

And it's not my responsibility to make them Tech, either.

It's incredibly irresponsible to group any company that uses a computer into "Technology".

It's misleading.

Here is the fact sheet for the S&P Technology Sector Index. And here is the fact sheet for the MSCI Technology Index. Take it up with them if you have a problem with it.

But don't make things up and throw stocks into sectors they don't belong to.

Be smart. Be better. Know what you own.

JC

 

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