The FAANG Market Is Fading(morningstar.com)
morningstar.com
The FAANG Market Is Fading
https://www.morningstar.com/articles/1070180/the-faang-market-is-fading
128 comments
Was just frowning when I read "For example, the three largest stocks accounted for less than 10% of returns in most years since 2009, and often just in the very low single digits." and saw that it was above 10% in 4 of 12 months in the table.
What the hell, who is this text for?
What the hell, who is this text for?
Same thought... Our trend looks great if we ignore 30% of the data that are massive and significant outliers :/.
I don't know if "% of total returns" is a fair metric. As a percentage of market cap, they still dominate the S&P500. Not to mention every asset manager has to own them otherwise they risk looking stupid. They're today's bluechip, for better or for worse.
Shouldn't we be calling it MANGA now?
If you change Facebook to Meta, you also should change Google to Alphabet, right?
Google did not change its name to Alphabet, nor has the ticker changed. Don't know why people keep saying this.
Sort of. GOOG(L) the ticker now represents Alphabet - when you buy GOOG, you are also getting shares of Waymo, Verily, Calico, and the rest of the "Other Bets". In that sense, Google did change its name to Alphabet. OTOH, Google as a separate company still exists within the Alphabet umbrella, and Google employees remain employees of Google (though they get Alphabet stock compensation). Also Waymo employees do not get GOOG stock (they get Waymo stock, which is currently privately held and majority-owned by Alphabet), so there is a real distinction between them.
MAAAN...
Can someone help me translate
To measure just how concentrated stock returns have been, we calculated the impact that the 10 largest stocks have had on the Morningstar US Large-Mid Index, which essentially tracks 90% of the stock market. We took the 10 largest stocks at the end of each year going back to 2009, and using Morningstar Direct's equity attribution tool, excluded their returns from the index's performance and compared that number with each year's total return.
into mathematics so I can interpret the percentages in the table below?
Why do people involved in finance hate mathematics so much? Is it obvious to everyone?
EDIT: I think it is: returns_of_index_per_year - returns_of_index_minus_returns_of_top_N_stocks_per_year
EDIT 2: What does "Cumulative Market Impact" mean? When you google it or "Market Impact" it gives bunch of unrelated measures... Finance jargon is such a mess.
To measure just how concentrated stock returns have been, we calculated the impact that the 10 largest stocks have had on the Morningstar US Large-Mid Index, which essentially tracks 90% of the stock market. We took the 10 largest stocks at the end of each year going back to 2009, and using Morningstar Direct's equity attribution tool, excluded their returns from the index's performance and compared that number with each year's total return.
into mathematics so I can interpret the percentages in the table below?
Why do people involved in finance hate mathematics so much? Is it obvious to everyone?
EDIT: I think it is: returns_of_index_per_year - returns_of_index_minus_returns_of_top_N_stocks_per_year
EDIT 2: What does "Cumulative Market Impact" mean? When you google it or "Market Impact" it gives bunch of unrelated measures... Finance jargon is such a mess.
It's beyond time to retire the FAANG acronym. At one point it signaled a group of companies that were dynamic players that were (to various extents) disrupting the existing business landscape. Now these companies are incumbent behemoths asking to be taken down in the same manner.
Remember when the BRICs were a trendy acronym? Obviously the individual parts have some relevance but not sure if the BRIC entity as a whole ever really meant as much as it was promised.
BRIC was basically up and coming geos. (Obviously an oversimplification.) China became something much different (ADDED: and more complicated) from the other three. And the other three arguably didn't grow as much in relative economic importance as the acronym implied they would.
Exactly. Didn't turn out as promised.
> It's beyond time to retire the FAANG acronym.
Antartica has a place called Wolfang. Lots of solar energy 24 hours for months half the year. Minus fifteen degrees centigrade temperature for the data center stadiums. Near zero cost real estate property prices. Uplink to satellite mega constellations. Two thirds of humanity isn't served as futuristically as Silicon Valley and they don't have a $50K Boxable for their inside. WOLFANG global services oriented market has yet to shine?
Antartica has a place called Wolfang. Lots of solar energy 24 hours for months half the year. Minus fifteen degrees centigrade temperature for the data center stadiums. Near zero cost real estate property prices. Uplink to satellite mega constellations. Two thirds of humanity isn't served as futuristically as Silicon Valley and they don't have a $50K Boxable for their inside. WOLFANG global services oriented market has yet to shine?
Is that from where the acronym emerged? I thought it was really an investing term, which described tech stocks with tremendous returns. I did not think "dynamism" was part of it.
So long as the acronym has utility for identifying something in a more concise way than the alternatives, people are probably going to keep using it. Incumbent behemoths still need names.
[deleted]
FAANGMULATAD-FacebookAppleAmazonNetflixGoogleMicrosoftUberLyftAirBnBTwitterAlphabetDropbox
Attribution- Blind
Square Salesforce Shopify Stripe SpaceX Netflix Alphabet Apple Amazon AirBnb Krispy-Kreme Equinix Zoom
"SSSSSnaaaakez"
Alphabet = Google
nice, that my lightning talk at 35c3 (2018) turned out so effective: https://media.ccc.de/v/35c3-9566-lightning_talks_day_2#t=333...
Maybe that s why Elon, Nadella, Bezos are selling lately
Might also have something to do with taxes.
Washington state is increasing capital gains tax next year. +7% I believe.
Elon had options expiring soon & was forced to.
Might be other reasons but those should not be overlooked.
Washington state is increasing capital gains tax next year. +7% I believe.
Elon had options expiring soon & was forced to.
Might be other reasons but those should not be overlooked.
Time to short FAANG and TSLA. :)
AAPL $2.65t, MSFT $2.47t, GOOGL $1.89t, AMZN $1.72t, TSLA $1t, FB $853b, NVDA $764b
Right now that's reasonably big tech in terms of publicly traded US tech companies. Everybody else is a long ways down.
So.
BRK $621b, JPM $476b, JNJ $419b, PG $362b, DIS $265b, KO $231b, VZ $215b, MCD $186b, BA $116, CAT $107b, MMM $100b
All of those companies combined will fit inside Apple's valuation at the rate things are going. And just about every old-line blue chip with a consequential market cap is somewhere between pathetically slow growth and stagnant. Meanwhile big tech is still expanding. And you can replace any number of those companies with others, whether HD, or AT&T (T) or WMT or LOW or PEP or TGT, with much the same outcome.
This article is, you guessed it, laughably, embarrassingly, false.
Big tech will keep getting bigger in relation to most of the other quasi rotting blue chips.
There is nothing coming up that will prompt a massive expansion of the old blue chips such that they're going to retake ground against big tech (not unless one believes all of big tech will be smashed to pieces by anti-trust - never gonna happen). The China boom is largely over, which means these old blue chips can't look forward to sucking off of that market any longer and there is no next China (nothing remotely comparable to that extreme of a boom). Are railroads and airlines going to start suddenly growing at 50% per year? Of course not. Productivity is about to skyrocket? Of course not. The US is going to suddenly take over the world's steel production? GM and Ford are going to put all of Germany and Japan's automakers out of business and every human on the planet is going to buy an extra vehicle? For no apparent reason companies like 3M are going to start growing rapidly? Pepsi and Coke are going to sell 2x the sugar water in an era that is turning against their core products (check out how pathetic Coke's business has been over the last 5-10 years)? How about big pharma, PFE's ass got saved by Covid, at least temporarily, as the vaccine threw them a bone. McDonald's, after so many years of stagnation (and given their saturation), is suddenly going to become a nice place to eat and start selling 2x the fries and burgers? Of course not. Americans are going to start buying a lot more Kraft box pasta or Heinz ketchup or Oreo's from Mondelez or soup from Campbell's? Of course not, it's all slow growth garbage. Campbell's is on a rocket ship to becoming a juggernaut $300 billion soup empire! Yeah, bullshit. And so on it goes.
For most of these companies, if they're lucky, they'll have just enough pricing power to keep up with dollar debasement and not lose real ground over this decade. More likely some of these garbage companies like MCD or KO will lose 1/4 or more of their real business to USD erosion as their customers can't (and won't) pay $5 for a 20oz soda or $6 for fries. These companies have struggled for many years to gain ground in real-terms prior to the recent wave of inflation, it's only going to get more difficult for them (consumers will be trapped in hell between higher prices and eroding real household purchasing power, and that's all assuming household debt doesn't get more expensive (it's historically cheap)).
If anything, the old blue chips will rot further and big tech will gain even more ground, over the next 3-5 years. Even if this market declines, relatively speaking big tech is still likely to take ground over time against the rest of the market.
Right now that's reasonably big tech in terms of publicly traded US tech companies. Everybody else is a long ways down.
So.
BRK $621b, JPM $476b, JNJ $419b, PG $362b, DIS $265b, KO $231b, VZ $215b, MCD $186b, BA $116, CAT $107b, MMM $100b
All of those companies combined will fit inside Apple's valuation at the rate things are going. And just about every old-line blue chip with a consequential market cap is somewhere between pathetically slow growth and stagnant. Meanwhile big tech is still expanding. And you can replace any number of those companies with others, whether HD, or AT&T (T) or WMT or LOW or PEP or TGT, with much the same outcome.
This article is, you guessed it, laughably, embarrassingly, false.
Big tech will keep getting bigger in relation to most of the other quasi rotting blue chips.
There is nothing coming up that will prompt a massive expansion of the old blue chips such that they're going to retake ground against big tech (not unless one believes all of big tech will be smashed to pieces by anti-trust - never gonna happen). The China boom is largely over, which means these old blue chips can't look forward to sucking off of that market any longer and there is no next China (nothing remotely comparable to that extreme of a boom). Are railroads and airlines going to start suddenly growing at 50% per year? Of course not. Productivity is about to skyrocket? Of course not. The US is going to suddenly take over the world's steel production? GM and Ford are going to put all of Germany and Japan's automakers out of business and every human on the planet is going to buy an extra vehicle? For no apparent reason companies like 3M are going to start growing rapidly? Pepsi and Coke are going to sell 2x the sugar water in an era that is turning against their core products (check out how pathetic Coke's business has been over the last 5-10 years)? How about big pharma, PFE's ass got saved by Covid, at least temporarily, as the vaccine threw them a bone. McDonald's, after so many years of stagnation (and given their saturation), is suddenly going to become a nice place to eat and start selling 2x the fries and burgers? Of course not. Americans are going to start buying a lot more Kraft box pasta or Heinz ketchup or Oreo's from Mondelez or soup from Campbell's? Of course not, it's all slow growth garbage. Campbell's is on a rocket ship to becoming a juggernaut $300 billion soup empire! Yeah, bullshit. And so on it goes.
For most of these companies, if they're lucky, they'll have just enough pricing power to keep up with dollar debasement and not lose real ground over this decade. More likely some of these garbage companies like MCD or KO will lose 1/4 or more of their real business to USD erosion as their customers can't (and won't) pay $5 for a 20oz soda or $6 for fries. These companies have struggled for many years to gain ground in real-terms prior to the recent wave of inflation, it's only going to get more difficult for them (consumers will be trapped in hell between higher prices and eroding real household purchasing power, and that's all assuming household debt doesn't get more expensive (it's historically cheap)).
If anything, the old blue chips will rot further and big tech will gain even more ground, over the next 3-5 years. Even if this market declines, relatively speaking big tech is still likely to take ground over time against the rest of the market.
> BRK $621b
BRK should not be included in these lists because it is just double counting AAPL, BA, and a few other blue chip companies. It is 40%+ AAPL.
https://hedgefollow.com/funds/Berkshire+Hathaway
I agree with your conclusions though.
BRK should not be included in these lists because it is just double counting AAPL, BA, and a few other blue chip companies. It is 40%+ AAPL.
https://hedgefollow.com/funds/Berkshire+Hathaway
I agree with your conclusions though.
AAPL is 40%+ of BRK's investment portfolio. There is a substantial number of wholly owned subsidiaries. AAPL constitutes only about 25% of BRK's market cap.
Ah, thanks for the correction.
USD erosion and buying power erosion are two different things. If salaries go up almost as much, they’ll still be able to buy the soda and fries. If not, McDs might even do better, because no one will be able to afford $10 soda and $25 fries at a better restaurant, and will settle for McDonald’s instead.
That never happens. You're talking about a fantasy scenario that only exists in a formula on a piece of paper, not in reality. Salaries will not step match USD erosion, incomes will get mauled as they tend to historically when confronted with inflation, and it'll cause increasing social chaos as the real standard of living drops (out of desperation for bargaining power, unions are likely to get more interest as a consequence).
We’ve been here before in the 70s, and what you predict did not come to pass. It might be different this time, but I doubt it. Prices and salaries will just adjust up to a new normal, and…the only thing that really gets hit are savings.
In my city the locally owned burger places have been paying decent salaries for decades and the people working there seem to not hate the job. The prices are just about McDonalds level and the quality is much better.
Prices are going up at places that see labor as part of their Just In Time system, which turned out to be amazingly fragile in a number of areas.
Prices are going up at places that see labor as part of their Just In Time system, which turned out to be amazingly fragile in a number of areas.
70-80% of McDs costs are labor, why wouldn’t their prices go up as their labor costs did? How do you have anything in services that isn’t dependent on just in time labor?
McDs stock prices always goes up during economic recessions for good reason. In many places, they are the cheapest game in town. Even in enlightened places like Lausanne Switzerland, only a few kebab places could compete on cost.
McDs stock prices always goes up during economic recessions for good reason. In many places, they are the cheapest game in town. Even in enlightened places like Lausanne Switzerland, only a few kebab places could compete on cost.
You don't need advanced scheduling systems if you've employed the same four people for the last three years. You don't need to develop training and management structure around people who truly do not want to be at work.
If you'll pardon the analogy, McDonalds has been using morale as a dump stat but it turns out to be important lategame.
If you'll pardon the analogy, McDonalds has been using morale as a dump stat but it turns out to be important lategame.
You make some good points.
However, note that there is a very long way to go for traditional industries.
China is one big chunk of people, and they may be in for a rough couple of decades with their recent return to hardcore communism, but there is a lot of room to grow there still. And there is India and all of Africa.
Untold numbers of people in the third world are rapidly approaching middle-class status, buying fridges and cars and so on.
This will have the concomitant effects on the rest of the economic ecosystem, and tech will ultimately gain even more from more rich consumers. But it's not game over for the big old juggernauts.
However, note that there is a very long way to go for traditional industries.
China is one big chunk of people, and they may be in for a rough couple of decades with their recent return to hardcore communism, but there is a lot of room to grow there still. And there is India and all of Africa.
Untold numbers of people in the third world are rapidly approaching middle-class status, buying fridges and cars and so on.
This will have the concomitant effects on the rest of the economic ecosystem, and tech will ultimately gain even more from more rich consumers. But it's not game over for the big old juggernauts.
If any of that were true, we'd have seen it in the old-line industries sales growth during the last five years. That hasn't been the case at all (and wasn't prior to Covid either). Global growth is not going to accelerate in some great way this decade, it's going to be mediocre as China struggles mightily with growth and debt, among other serious problems. Japan, Germany, Britain, France will all remain stagnant (as they have for most of the past decade plus net). Other Asia will produce growth, but there's no guarantee US industrials will have great access to that growth; if those countries (eg Vietnam, Indonesia, India, etc) are smart, they'll pull a China and favor their own domestic context as they grow (which India already does quite a bit of for its part).
> Untold numbers of people in the third world are rapidly approaching middle-class status, buying fridges and cars and so on
Not made in America fridges or cars. Those fridges won't likely be made by US companies in Asia, either. Not cars made by GM or Ford (trucks actually, as they hardly make cars these days). And those relatively poor global median consumers can't afford Teslas (now or in 20 years). And those emerging consumers aren't buying $45,000 US trucks either. The best case scenario for old US industry is to tread water, to not lose ground while sparring with China and all the other emerging market companies.
Most of the major emerging markets are going to come up ready to fight with their own champions, as China has (although not as potently as they've done it). The US old-line companies are at risk of getting their collective head punched in as a lot of new companies come up out of emerging markets looking to dethrone them. Mid-tier manufacturing will plausibly see a huge threat from emerging market companies pushing up the value chain, while high-tier manufacturing is absolutely going to take a direct assault from China (Boeing, Deere, autos, semiconductors, et al.).
As it pertains to the US, the only type of company I'd be interested in being over the next decade, is a tech company with (ideally) global use potential. Everything else is largely going to suck big time, either due to pricing power problems with USD erosion domestically (constant battle there), or intense competition problems overseas (and or market access problems in locations like China). An extra aside: along with particularly not wanting to be Boeing this decade, I wouldn't want to be Starbucks (just wait until you see what China does to them).
> Untold numbers of people in the third world are rapidly approaching middle-class status, buying fridges and cars and so on
Not made in America fridges or cars. Those fridges won't likely be made by US companies in Asia, either. Not cars made by GM or Ford (trucks actually, as they hardly make cars these days). And those relatively poor global median consumers can't afford Teslas (now or in 20 years). And those emerging consumers aren't buying $45,000 US trucks either. The best case scenario for old US industry is to tread water, to not lose ground while sparring with China and all the other emerging market companies.
Most of the major emerging markets are going to come up ready to fight with their own champions, as China has (although not as potently as they've done it). The US old-line companies are at risk of getting their collective head punched in as a lot of new companies come up out of emerging markets looking to dethrone them. Mid-tier manufacturing will plausibly see a huge threat from emerging market companies pushing up the value chain, while high-tier manufacturing is absolutely going to take a direct assault from China (Boeing, Deere, autos, semiconductors, et al.).
As it pertains to the US, the only type of company I'd be interested in being over the next decade, is a tech company with (ideally) global use potential. Everything else is largely going to suck big time, either due to pricing power problems with USD erosion domestically (constant battle there), or intense competition problems overseas (and or market access problems in locations like China). An extra aside: along with particularly not wanting to be Boeing this decade, I wouldn't want to be Starbucks (just wait until you see what China does to them).
The most potent competitor to Starbucks (Luckin' Coffee) took a huge hit due to accounting scandals just recently. More generally Starbucks in China is considered a luxury brand (not what it is in the US).
Anything manufacturing related I can see being shifted overseas. US labor is too costly compared to international labor. I think Deere and co already see the writing on the wall and are moving to diversify with autonomous capabilities. Software is not so easy to copy or we would've seen an iOS clone out of China that actually works as well as iOS.
Anything manufacturing related I can see being shifted overseas. US labor is too costly compared to international labor. I think Deere and co already see the writing on the wall and are moving to diversify with autonomous capabilities. Software is not so easy to copy or we would've seen an iOS clone out of China that actually works as well as iOS.
Numbers are one thing but it seems that these brands are growing under now. It's not the original product/brand but infrastructure, research, future unrelated projects.
FAANG is dead. Long live MANAMA! (Microsoft, Apple, Netflix, Alphabet, Meta, Amazon)
Silly, I know but I’ve always wondered why Microsoft was left out of the original 5
Silly, I know but I’ve always wondered why Microsoft was left out of the original 5
In the big picture, on a very long time horizon, they seemed on a trajectory of irrelevance through the Ballmer era, up until Satya became CEO. (That doesn't even necessarily preclude record profits under Ballmer, but a hide-bound inability to adapt to changing market fundamentals.)
PG tried calling it in 2007: http://www.paulgraham.com/microsoft.html
They really changed when Satya Nadella came in, however.
(Not to romanticize. Big tech has a smarmy evil these days. Ballmer just wanted to sell Windows and Office like products to big enterprises. It was less disturbing than donning their sith robes and joining the rest of big tech in trying to posses our incorporeal souls through massive amounts of data and 'nudges'.)
PG tried calling it in 2007: http://www.paulgraham.com/microsoft.html
They really changed when Satya Nadella came in, however.
(Not to romanticize. Big tech has a smarmy evil these days. Ballmer just wanted to sell Windows and Office like products to big enterprises. It was less disturbing than donning their sith robes and joining the rest of big tech in trying to posses our incorporeal souls through massive amounts of data and 'nudges'.)
Which is unfair and short sighted, given that Ballmer is the guy who turned it from the windows shop to a company where windows is just one of 3 growing massive sections (plus a few smaller ones), with windows not even being the first one anymore.
IIRC, Ballmer actually started many of the things that we saw happening early in Satya's tenure. So he deserves at least some credit for seeing the writing on the wall and trying to adapt to it. Perhaps he also figured that in order for the transformation to really happen he had to not be the one trying to lead it.
Ballmer also took charge right after the dotcom bust. Even though the stock tanked from ludicrous highs, revenue steadily grew under his tenure. I can’t speak to how company longevity performed under his reign.
I know Steve. He's been unfairly maligned for a long time. The biography of him is pretty mean. I doubt the author ever even met him.
[deleted]
>Ballmer just wanted to sell Windows and Office like products to big enterprises.
Yes, but actually, NO. I know it's fashionable to bash Ballmer for being the stereotypical image of the late '90's corporate villain, pulled right out of Office Space[1], but he was also the one who got the ball rolling on what we today know as Azure and saved the Xbox division during the red ring of death and other major issues that plagued the Xbox 360 and cost Microsoft billions.
If he only cared about the enterprise stuff, he would have sold the Xbox division or let it sink at the first sign of losses, but instead he propped it up despite the massive losses. IMHO, he should get some kudos for that as Xbox is currently the only competitor to the Play Station (Nintendo isn't since they do their own thing).
"I am trembling, sat in front of Steve (Ballmer), who I love to death, but he can be an intimidating human being. And Steve said, 'OK, talk me through this,'" Moore added. "I said, 'If we don't do this, this brand is dead.'" If we hadn't made that decision there and then, and instead tried to fudge over this problem, then the Xbox brand and Xbox One wouldn't exist today."[2]
Ballmer also set the stage for Microsoft's entry into the cloud space in the early days before it was even called Azure, when he saw what AWS was doing.
"Steve Ballmer, the former CEO of Microsoft, initially resisted the idea of embracing the software services paradigm fearing that it would cannibalize Windows and Office business which was contributing to 80% of the revenue. Eventually, Ballmer was not only convinced but pushed Microsoft to become a fully-fledged cloud company through “we’re-all-in” war cry."[3]
Not saying you should like him or anything, but this guys really deserves more credit that he gets for where Microsoft is today (the good and the bad).
As a bonus, for added humor, here he is going crazy on stage about 'DEVELOPERS', like a hamster on cocaine. [4].
[1] https://www.imdb.com/title/tt0151804/
[2] https://www.vg247.com/rrod-xbox-360-ballmer-xbox-one
[3] https://www.forbes.com/sites/janakirammsv/2020/02/03/a-look-...
[4] https://youtu.be/I14b-C67EXY?t=12
Yes, but actually, NO. I know it's fashionable to bash Ballmer for being the stereotypical image of the late '90's corporate villain, pulled right out of Office Space[1], but he was also the one who got the ball rolling on what we today know as Azure and saved the Xbox division during the red ring of death and other major issues that plagued the Xbox 360 and cost Microsoft billions.
If he only cared about the enterprise stuff, he would have sold the Xbox division or let it sink at the first sign of losses, but instead he propped it up despite the massive losses. IMHO, he should get some kudos for that as Xbox is currently the only competitor to the Play Station (Nintendo isn't since they do their own thing).
"I am trembling, sat in front of Steve (Ballmer), who I love to death, but he can be an intimidating human being. And Steve said, 'OK, talk me through this,'" Moore added. "I said, 'If we don't do this, this brand is dead.'" If we hadn't made that decision there and then, and instead tried to fudge over this problem, then the Xbox brand and Xbox One wouldn't exist today."[2]
Ballmer also set the stage for Microsoft's entry into the cloud space in the early days before it was even called Azure, when he saw what AWS was doing.
"Steve Ballmer, the former CEO of Microsoft, initially resisted the idea of embracing the software services paradigm fearing that it would cannibalize Windows and Office business which was contributing to 80% of the revenue. Eventually, Ballmer was not only convinced but pushed Microsoft to become a fully-fledged cloud company through “we’re-all-in” war cry."[3]
Not saying you should like him or anything, but this guys really deserves more credit that he gets for where Microsoft is today (the good and the bad).
As a bonus, for added humor, here he is going crazy on stage about 'DEVELOPERS', like a hamster on cocaine. [4].
[1] https://www.imdb.com/title/tt0151804/
[2] https://www.vg247.com/rrod-xbox-360-ballmer-xbox-one
[3] https://www.forbes.com/sites/janakirammsv/2020/02/03/a-look-...
[4] https://youtu.be/I14b-C67EXY?t=12
> As a bonus, for added humor, here he is going crazy on stage about 'DEVELOPERS',
I guess some people found it funny, but everyone I work around as a software developer (not for native Windows/MS, mind) all found it incredibly embarrassing.
I guess some people found it funny, but everyone I work around as a software developer (not for native Windows/MS, mind) all found it incredibly embarrassing.
[deleted]
>> trying to posses our incorporeal souls...
I think this is driven by an addiction of big tech to being 'relevant' and engagement is the metric that gives them that sweet hit of relevancy. Heaven forbid they just turn out a useful product for a reasonable profit.
I think this is driven by an addiction of big tech to being 'relevant' and engagement is the metric that gives them that sweet hit of relevancy. Heaven forbid they just turn out a useful product for a reasonable profit.
I similarly don't understand why Netflix is included. Well, I do, but I don't understand why "we" didn't change Cramer's acronym to FAAMG long ago, IMO Netflix does not belong with these names neither in it's size, it's role in tech or it's cash flow. Arguably Nvidia would be a more fitting N, but it's cash flow is not in the same league either.
My understanding is that this acronym is partially based on the perceptions employees have about the compensation and perks given out by big tech companies. Historically, Microsoft didn't pay as well.
> Historically, Microsoft didn't pay as well.
Microsoft minted millionaires of its employees like popcorn. In the 90s the newspaper estimated that 10,000 Microsoft millionaires lived in the area.
Microsoft minted millionaires of its employees like popcorn. In the 90s the newspaper estimated that 10,000 Microsoft millionaires lived in the area.
Tangential thought here: Today it’s fashionable to say that the reason for Seattle area housing costs is “Amazon,” so why wasn’t it the same thing in the 90s with Microsoft? My guess is that it’s a difference of scale: that back then there was still room to build on the eastside, and now it’s not just Microsoft yielding high incomes and wealth, but also Amazon, Google, Facebook, and others. Still, interesting to ponder the real role of these companies in housing costs (since that’s the knee-jerk assumption)
Housing prices in the eastside were definitely blamed on Microsoft.
Before Microsoft, for example, Kirkland was where you bought a house if you didn't have much money. Microsoft built their campus next door, and that was the end of cheap Kirkland real estate.
Housing prices were closely related to commuting distance from the campus.
Before Microsoft, for example, Kirkland was where you bought a house if you didn't have much money. Microsoft built their campus next door, and that was the end of cheap Kirkland real estate.
Housing prices were closely related to commuting distance from the campus.
My guess would be location. Amazon is one of the only companies to locate in the city. Not near it, in it.
Such that the "campus" of other companies is a discrete thing.
How this fits for housing is that many new hires to Amazon don't have cars, and choose to live close to where they don't need them. Not really an option for the campus centric companies, where folks live further out and commute.
Such that the "campus" of other companies is a discrete thing.
How this fits for housing is that many new hires to Amazon don't have cars, and choose to live close to where they don't need them. Not really an option for the campus centric companies, where folks live further out and commute.
Seattle commutes are pretty miserable. Always have been. The problem is the metropolitan area rings a huge lake, so a grid arrangement of roads is impossible.
The current problem is Sound Transit does not recognize that the metropolitan area rings Lake Washington, and the sensible thing is to build mass transit around that ring. I don't think the ST people have ever looked at a map. Even worse, the old rail corridors that ringed the lake were deliberately destroyed.
The current problem is Sound Transit does not recognize that the metropolitan area rings Lake Washington, and the sensible thing is to build mass transit around that ring. I don't think the ST people have ever looked at a map. Even worse, the old rail corridors that ringed the lake were deliberately destroyed.
I mean. You aren't wrong. But Atlanta commutes were easily as bad back when I lived there.
On the other hand Netflix always had a much smaller rate of hiring than the others. If it was just about high pay Renaissance Technologies could have been included. It is best understood as high pay and large numbers of hires. In that view Netflix looks like a mistaken inclusion.
Jim Cramer coined the term to identify hot stocks. The term was coopted by big tech employees.
I hear that thrown around, but while it may be accurate, it sounds like retconning as Jim Cramer came up with the term, and I can assure you Jim Cramer does not give a damn about developer salaries. It was about fast growing tech stocks, not software engineers.
Even that goofball is now calling for FAAMG[0] (well, MAMAA) while (some) devs want to cling on to FAANG. Bit funny how Facebook's name change was apparently the trigger for him.
[0] https://www.cnbc.com/2021/10/29/cramer-new-acronym-to-replac...
Even that goofball is now calling for FAAMG[0] (well, MAMAA) while (some) devs want to cling on to FAANG. Bit funny how Facebook's name change was apparently the trigger for him.
[0] https://www.cnbc.com/2021/10/29/cramer-new-acronym-to-replac...
Amazon isn't known for Silicon Valley comp levels either.
They're catching up with their new pay bands, SDE II is starting to get offers in 350k - 400k range. Can even go higher by Q1 next year.
Their “philosophy of total compensation” used to actually penalize you for past RSU grants appreciating beyond projection. Even with a strong review you’d hear things like you can’t get a salary bump, because you’re already over your target compensation. I wonder if that’s still the case.
Over time I've learned to tune out the reasons that employers use to justify changes to total comp. I just don't see why their reasoning would matter to me.
I find it more useful to make my own assessments about what I could make elsewhere, and whether or not (all things considered) I want to continue with my current employer.
I find it more useful to make my own assessments about what I could make elsewhere, and whether or not (all things considered) I want to continue with my current employer.
Washington Amazon employees don't have to pay the heavy SV taxes, either.
At least until lately. Washington is working overtime to raise taxes to California levels.
At least until lately. Washington is working overtime to raise taxes to California levels.
Up until the end of the 90s, Microsoft stock was booming enough that it was reasonable for them to compensate employees with less salary and more stock options. They survived the .com crash, but the stock basically flatlined for several years, making options not desirable as compensation. At some point, I think in the mid to late 2000s, they switched to higher salaries and actual stock grants instead of options. So there were a few years where it was paying less than other companies, but they corrected for it.
Apple and Amazon generally haven't paid as high as FB, Google, and Netflix in total comp either though. Of course in hindsight the stock gains in the past 5 years if you worked at either company have still made you extraordinarily well paid, and same with Microsoft.
> to FAAMG long ago
Because Netflix pays Senior Engineers ~$500k/year in cash and MS pays Principal Engineers $300k TC?
Because Netflix pays Senior Engineers ~$500k/year in cash and MS pays Principal Engineers $300k TC?
I'd love to read an article from an ex-Netflix engineer explaining why their service is such garbage. I want money, but the reason I'd think about asking for that much is because I'd need to interface with massive irritations.
Could you elaborate on what you mean by "such garbage"?
E.g., I stopped using Netflix for several reasons: uninteresting content, obnoxious UI, and unhelpful/implausible recommendations system.
But I was always very happy with the reliability and performance of their streaming system.
E.g., I stopped using Netflix for several reasons: uninteresting content, obnoxious UI, and unhelpful/implausible recommendations system.
But I was always very happy with the reliability and performance of their streaming system.
It's not garbage? What are you talking about.
What cheapskates Microsoft are!
The acronym has nothing to do with average developer salaries, for there are lots of other contenders that pay more.
Thus ‘GAFAM’, though I've more commonly seen that one in the francophone world.
I'm from Québec and GAFAM is the usual media term for the big tech companies here. Amusing how the acronym got (IMO appropriately) corrected in translation, tho I'm not sure if it's just an artifact of it sounding cool (whereas GAFAN would be read out "gafɑ̃")
I like MANAMANA (doo doooo, doodoo doo!)
Microsoft, Apple, Netflix, Alphabet, Meta, Amazon, Nvidia, Adobe
Microsoft, Apple, Netflix, Alphabet, Meta, Amazon, Nvidia, Adobe
Nvidia isn't as software-focused as the others. Adobe is popularly known to be a software shitshow internally, whether that's true or not although by the stability and age of their products I'm inclined to believe they are.
Maybe I'm misguided, but what I believe made FAANG a thing is a strong software-focused culture that maintained a level of quality and innovation that usually gets lost at that scale, as was the case with Microsoft and things like IBM.
Maybe I'm misguided, but what I believe made FAANG a thing is a strong software-focused culture that maintained a level of quality and innovation that usually gets lost at that scale, as was the case with Microsoft and things like IBM.
Adobe's stock did grow 200% during the Pandemic.
Everyone's stock did that during the pandemic.
Any other relatively well established tech company that's not in MANAMA ?
I don't know about Netflix, but I definitely agree Nvidia should be in, coming at 800B market cap.
Because FAANG was a stock market term for "hot tech stocks", and Microsoft was old and not-hot at the time.
It also meant highest paying companies at one point in the engineer market which is also why it got popular. MS isn’t at the top on that metric
[deleted]
Also MS has a reputation of being a horrible place to work for:
https://blog.zorinaq.com/i-contribute-to-the-windows-kernel-...
https://blog.zorinaq.com/i-contribute-to-the-windows-kernel-...
You can find these anecdotes for every one of these companies. My perception is that Amazon has the worst reputation but I haven't done any market research or worked at any of them.
Yes, but bad in different ways. Amazon's reputation is that they overwork you and people only stay until their "golden handcuffs" vest. But their code quality and tooling is seen as excellent.
I don't include microsoft so I can say they're "working for the MAAAN."
Totally agree on the Microsoft point, although another poster pointed out that from an investment perspective faang may have referred to high roi companies so maybe microsoft was too well established? Not my are of expertise.
In any case Im going to throw NAMMA out there too because I can say it easier and it leaves room for infinite M companies :)
In any case Im going to throw NAMMA out there too because I can say it easier and it leaves room for infinite M companies :)
> MANAMA
Doo doo do do do.
Doo doo do do do.
Microsoft, Apple, Netflix, Alphabet, Meta, Amazon, North America:
https://youtu.be/8N_tupPBtWQ
https://youtu.be/8N_tupPBtWQ
MANAMA? do doo di do do
[deleted]
Jim Cramer invents these acronyms
Manama is the capital of Bahrain :)
I prefer MANAAM, which is derived from the word “sleep” in Arabic.
I prefer MANAAM, which is derived from the word “sleep” in Arabic.
The new challengers need to name themselves all D and O names.
Do doo do doo
Do doo do doo
MMNAAA! Pronounced like you’re saying “Hmm, nah.”
2OEH8eoCRo0(3)
> wondered why Microsoft was left out of the original 5
Same reason Cornell is typically left out of conversations about Ivy league schools.
It's just not that prestigious. Seeing MS on a resume is not as impressive as the others, and that's also reflected pretty clearly in the comp. It's not nearly as competitive to get a job at MS. The stock performance over the past decade has been pretty meh compared to the others.
Same reason Cornell is typically left out of conversations about Ivy league schools.
It's just not that prestigious. Seeing MS on a resume is not as impressive as the others, and that's also reflected pretty clearly in the comp. It's not nearly as competitive to get a job at MS. The stock performance over the past decade has been pretty meh compared to the others.
How is Cornell Tech's campus doing at Roosevelt Island, NYC?
Microsoft has some really cool stuff going on aside from .NET Core. Simon Peyton Jones has been there since the late 90s working on Haskell. Some notable ones for me: F#, F*, Z3 (SMT solver), C# and its ubiquity in products like Unity, WSL2, VS Code, etc...
What's up with Hololens 2? Any uptake? I would like to make a short video of the ultimate PC vs. Mac parody with two armies facing each other with one wearing the stylish MR glasses coming from Apple vs. the more typical-looking HMD Hololens for nostalgia's sake.
I have been in computing for a long time, and all of my jobs have been on PCs with Windows other than the weird Banyan Vines, VMS, Irix, and QNX systems I have worked with over the years. All my graphic artist friends had Apple products. I have had one job where I used Quickbooks on an old Apple Macintosh (1994), but not much else with it. I did put a deposit on a NeXT machine, but that fell through!
I have had a computer since 1977, a Commodore PET 2001 followed by a Vic-20. A Toshiba dual-floppy laptop that probably wouldn't fit under the seat in front in Economy Class seating. My first Apple was a Power Macintosh in 1995/96 (I think the 7200) on which I loaded Minix or some Minix derivative at a later date, a pen-based NCR 3125. Amazingly slim for the time, and I updated the drive in it a year or two later. My first real micro-electronics project. The Newton came out around the same time. The NCR 3125 was a 386 running PenOS that I eventually put Windows with pen support on. Various PCs I built (a RAID 0, Dual-Athlon anyone?) in the early 2000s running Blender3D. I donated $50 to support Ton's efforts to take it open source back then. And so on...Microsoft has always had the tech, but not the marketing or style of Apple. I currently use a Windows 10 gaming laptop, an old Lenovo running Kali, a 2011 iMac (1TB HD! 16 or 32 GB of RAM - I have to look). I just want tools I can use. The only computer/OS I was evangelical about was mh Amiga 1000 and 500!
Microsoft has some really cool stuff going on aside from .NET Core. Simon Peyton Jones has been there since the late 90s working on Haskell. Some notable ones for me: F#, F*, Z3 (SMT solver), C# and its ubiquity in products like Unity, WSL2, VS Code, etc...
What's up with Hololens 2? Any uptake? I would like to make a short video of the ultimate PC vs. Mac parody with two armies facing each other with one wearing the stylish MR glasses coming from Apple vs. the more typical-looking HMD Hololens for nostalgia's sake.
I have been in computing for a long time, and all of my jobs have been on PCs with Windows other than the weird Banyan Vines, VMS, Irix, and QNX systems I have worked with over the years. All my graphic artist friends had Apple products. I have had one job where I used Quickbooks on an old Apple Macintosh (1994), but not much else with it. I did put a deposit on a NeXT machine, but that fell through!
I have had a computer since 1977, a Commodore PET 2001 followed by a Vic-20. A Toshiba dual-floppy laptop that probably wouldn't fit under the seat in front in Economy Class seating. My first Apple was a Power Macintosh in 1995/96 (I think the 7200) on which I loaded Minix or some Minix derivative at a later date, a pen-based NCR 3125. Amazingly slim for the time, and I updated the drive in it a year or two later. My first real micro-electronics project. The Newton came out around the same time. The NCR 3125 was a 386 running PenOS that I eventually put Windows with pen support on. Various PCs I built (a RAID 0, Dual-Athlon anyone?) in the early 2000s running Blender3D. I donated $50 to support Ton's efforts to take it open source back then. And so on...Microsoft has always had the tech, but not the marketing or style of Apple. I currently use a Windows 10 gaming laptop, an old Lenovo running Kali, a 2011 iMac (1TB HD! 16 or 32 GB of RAM - I have to look). I just want tools I can use. The only computer/OS I was evangelical about was mh Amiga 1000 and 500!
> How is Cornell Tech's campus doing at Roosevelt Island, NYC?
I dunno, but every time I head over to that end of the island it seems pretty dead. There is the Graduate Hotel with the swanky Panorama Room bar on top that’s fun to visit (watch seaplanes land every half hour some days), the fancy cafe is open, there’s nice open plazas between buildings, it connects to the park overlooking the river (and FDR memorial beyond) … but it’s all so empty. I can’t imagine it’s operating at normal capacity.
North end is better anyway ;)
I dunno, but every time I head over to that end of the island it seems pretty dead. There is the Graduate Hotel with the swanky Panorama Room bar on top that’s fun to visit (watch seaplanes land every half hour some days), the fancy cafe is open, there’s nice open plazas between buildings, it connects to the park overlooking the river (and FDR memorial beyond) … but it’s all so empty. I can’t imagine it’s operating at normal capacity.
North end is better anyway ;)
That's a shame. It's a great location. Near Manhattan, but it has that 'other' feeling, but maybe that's me. I was born and raised in Brooklyn, and RI was always 'other'!
I think Microsoft and Amazon have the most interesting products as far as dev tooling. Unless you're really into ML I guess. Too bad they don't pay as well.
Yes, I actually liked VS Code a lot, and I was an emacs user before that. MSVS is pretty good too. I am still using F# here and there for small, personal projects but I use my iPad Pro (2015) with Frank Kruger's [1] Continuous app[2], an F# and C# IDE with a built-in compiler, syntax highlighting, code completion, and live debugging. Frank is a juggernaut in .NET and many other eclectic things within the tech domain! Check him out. Continuous is the best way to play with code outside of sitting at your desktop, and even then too!
[1] https://praeclarum.org/
[2] http://continuous.codes/
[1] https://praeclarum.org/
[2] http://continuous.codes/
Funny, I'd just stumbled across his F# implementation of Hindley-Milner while working on my own inferencer (https://gist.github.com/praeclarum/5fbef41ea9c296590f23)
> The stock performance over the past decade has been pretty meh compared to the others.
MSFT’s ten year total return (1482%) is better than AAPL’s (1256%) or GOOG’s (815%), but not as good as AMZN’s (1629%) or NFLX’s (6250%). FB hadn’t IPOed yet ten years ago.
This is per a site called finbox.
MSFT’s ten year total return (1482%) is better than AAPL’s (1256%) or GOOG’s (815%), but not as good as AMZN’s (1629%) or NFLX’s (6250%). FB hadn’t IPOed yet ten years ago.
This is per a site called finbox.
Per this website, AAPL has a 32.79% annualized return, and MSFT has a 31.84% annualized return over the past 10 years, dividends reinvested.
https://dqydj.com/stock-return-calculator/
https://dqydj.com/stock-return-calculator/
Thanks. Don’t care enough to do a deep dive but it seems like at least MSFT is in the pack.
Sure, look at a few years while excluding ~1/4 of the data and I am convinced your analysis is just great.