The FANG that won’t bite back

Investing


CNBC’s Jim Cramer remembers the days when the market declined and traders would flock to safety in “recession-proof” stocks like General Mills and Kimberly-Clark.

But times have changed. Now, the “Mad Money” host sees traders fleeing to the FANG stocks, Cramer’s acronym for Facebook, Amazon, Netflix and Google, now Alphabet when their favorite sectors go awry.

“Look, it’s highly unusual for non-dividend paying, high-multiple stocks to be the lovey blanket of safety that these FANG names have actually become in our market. But, you see, their growth has nothing to do with the economy,” Cramer said. “FANG is driven by a global secular trend that’s not going away any time soon.”

Rather than offering reliably “safe” products like cereal or facial tissues, companies like Amazon, Alphabet and Facebook are the beacons of both e-commerce and advertising, Cramer said.

Endlessly searching for ways to target specific types of consumers online, these companies offer ways for traders and investors to play new-age retail amid controversial health care policy change or weakness in the financial stocks.

“These have become the default stocks to buy when you get freaked out. Until something replaces them in terms of their commonality — which is the love of the consumer — I think it stays that way. The P&Gs and the Kimberly-Clarks used to be the international consumer stocks that you could gravitate to when health care or the banks broke down. Now? Now, you just get long FANG,” the “Mad Money” host said.



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