Chart of the week: the FANG frenzy

Is the dotcom bubble back? You'd be forgiven for thinking so given the buying frenzy in the tech sector. The FANG+ index consists of ten tech giants, including Amazon, Google's parent Alphabet, Facebook and China's Tencent and Baidu. It has just eclipsed the 3,000 mark for the first time, as Russ Mould of AJ Bell points out, and only took 1,365 days from its inception at 1,000 to get there. By contrast, the broader tech benchmark, the Nasdaq Composite index, needed 1,570 days, just over four years, to go from 1,000 to 3,000. Valuations aren't nearly as overstretched now as they were then, but given the inauspicious outlook for the sector (see Viewpoint), investors should treat the tech giants with extreme caution.

"[Consider] the extraordinary list of charges against Facebook, Google, Twitter, Amazon and Apple and others: exposing young people to online grooming, sexting, cyberbullying, pornography and harassment; destroying entire industries without replacing the taxation; exploiting labour; encouraging eating disorders and self-harm; enabling political extremism... accelerating the atomisation of society; and promoting fake news the World Health Organisation [has] included gaming disorder', [involving] behaviours such as impaired control of time spent playing video games and prioritisation of gaming above other activities', in its draft diagnostic manual big tech will end up like big tobacco: heavily regulated around the world [and] taxed aggressively to pay for the health and societal problems they have caused."

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