Jim Cramer: FANGs can withstand trade tensions

FANG stocks – the big tech companies – are perfect for current market conditions, says former hedge-fund manager Jim Cramer.

904_MW_P14_strategy_guru
Jim Cramer,host of CNBC's Mad Money and founder of TheStreet.com

With US investors focused on President Donald Trump's trade dispute with China, CNBC says Jim Cramer believes there are four specific stocks that can withstand trade tensions the Fang stocks (Facebook, Amazon, Netflix and Google now Alphabet). "In one of the great coincidences in stock market history, Fangs have got nothing in China," Cramer said at the end of last week. "All four are accidentally anti-Chinese stocks, and that is perfect for this market," the former hedge-fund manager adds.

Indeed, social-media giant Facebook and streaming service Netflix are both blocked in China; Amazon's way is blocked by Alibaba, an e-commerce giant already established in the country; and Alphabet withdrew its business from China to protest against the government's increased censorship. Yet that now looks like a smart move: "Alphabet's lack of China exposure... makes it a better stock than if it had China as a major market," notes Cramer. The stocks also benefit from being in secular growth markets to an extent they are indifferent to the global growth cycle.

That said, Cramer also acknowledges on CNBCthat the recent rally in large-cap tech stocks has been "breathtaking", and that there appears to be "no particular reason" for it.So "it's easy to see why these Fang stocks are reviled for being too high, too fast, too rich, too whatever. But that's been the case ever since we coined the term five years ago. Who knows? Maybe it'll be the same five years hence."

Recommended

The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Robin Geffen: dividend cuts aren't all down to Covid
Stockmarkets

Robin Geffen: dividend cuts aren't all down to Covid

The seeds of recent dividend cuts and cancellations were sowed many years ago, says veteran investor Robin Geffen.
25 Oct 2020
Dividend payments will take a long time to recover
Income investing

Dividend payments will take a long time to recover

Companies are gradually resuming dividend payouts, but we can expect only a modest rebound in 2021, says Cris Sholto Heaton.
25 Oct 2020
“Big Finance” comes out of its decade-long slump as bankers bounce back
Stockmarkets

“Big Finance” comes out of its decade-long slump as bankers bounce back

The financial sector was hammered by the crisis of 2008. Now, bankers are rediscovering their swagger, says Matthew Lynn.
25 Oct 2020

Most Popular

Negative interest rates and the end of free bank accounts
Bank accounts

Negative interest rates and the end of free bank accounts

Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK bankin…
19 Oct 2020
UK post-Covid recovery stocks: these 20 companies could be set to rocket
Share tips

UK post-Covid recovery stocks: these 20 companies could be set to rocket

Finding stocks with the potential to rise tenfold or even further is far easier said than done. But the pandemic has produced the most promising backd…
22 Oct 2020
Big spending government is here to stay – just ask Rishi Sunak
UK Economy

Big spending government is here to stay – just ask Rishi Sunak

Governments around the world are splashing huge amounts of cash as they do “whatever it takes” to prop up their economies. John Stepek looks at where …
23 Oct 2020