Julian Robertson on FANG stocks
Hedge fund manager Julian Robertson has an optimistic view on the Trump administration. He believes the reforms under the Trump administration could be greatly beneficial for the US economy (SPY).
He also shared his views on FANG stocks, which include Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL). He believes FANG stocks and the technology sector’s (QQQ) valuations look cheap compared to the valuation of the broader market.
He said, “I don’t think the FANGs or the tech stocks are frothy at all. I think relative to the rest of the market never have [these] stocks been this cheap. None of them were the caliber of Google, Facebook and Microsoft. I love Facebook.”
FANG stocks leading the bull market
During the 2008 global financial crisis, the US economy entered a depression. However, the economy witnessed some improvements in late 2009 when the Fed lowered its key interest rate to near-zero levels. The equity market also witnessed a strong bull market at that time. The bull market has continued for nine years, and the FANG stocks have led this bull market. These stocks have had tremendous performances in the last nine years.
The price-to-earnings multiples of Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL) stood at 32.58x, 280.30x, 263.32x, and 64.46x, respectively, as of June 14. Robertson believes these stocks are trading at an average 20% premium to the market valuation.
In the next part of this series, we’ll analyze some of Julian Robertson’s investment ideas.