Forget the FAANGs. It’s a stock picker’s market now
The latest results from Tesla (“First quarter results so far highlight our view that investors need to be selective,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a report this week. Haefele added that “Tesla’s record profit underlines rising global demand for electric vehicles,” and also pointed out that “the disappointing outcome for Netflix shouldn’t obscure the robust outlook for subscription services.”Netflix’s big miss could wind up being a company specific issue. It’s not necessarily a reason to shun all of the other FAANGs.Of course, investors are still willing to flock to companies that are reporting strong results. The success of Tesla shows that traders are not afraid of high-priced stocks that value investing gurus like Warren Buffett tend to avoid. Yes, Tesla is expensive when you look at traditional price-to-earnings ratios and compare Tesla with the rest of the auto industry. But as long as Tesla lives up to the hype, that may not matter. “Tesla’s ability to achieve a trillion dollar valuation…is a confirmation that paying up for future earnings potential is still a rational investment with the right business model,” said Louis Navellier, founder of Navellier & Associates, in a report Thursday.
