Almost five years ago I wrote a blog post titled, “BANG: Why The Gold Miners Could Soon Make FANG Look Tame.” A reader recently reached out to ask if I would post an update so here it is. The chart below plots two custom indexes: FANG (META, AMZN, NFLX, GOOG) versus BANG (GOLD, AEM, NEM). Clearly, there has been some back and forth between the two with the BANG stocks taking the lead and holding it over the past year or so. Frankly, I’m surprised they haven’t done better but more on that in a bit. As for the FANG stocks, it’s pretty remarkable to see them generate essentially zero return as a group since mid-2018, even after their strong runup to start the year.
This article was originally published by The Felder Report.
The situation for the BANG stocks, still broadly ignored by investors, is very different. Free cash flow has soared more than four-fold since I first wrote about them. The rise in aggregate market cap has been far less. The result of all of this is that the BANG stocks have outperformed the FANG stocks even while they have gotten significantly cheaper and the latter have gotten significantly more expensive relative to their respective trends in free cash flow.
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