WHY WE DON’T INVEST IN MOST FAANG STOCKS

A question we often get from clients and prospects alike is, “Why don’t you own FAANG stocks in your LightPoint Portfolios?” For those of you who might not be familiar, the so-called FAANG stocks refer collectively to Facebook, Apple, Amazon, Netflix and Google. These are the largest and arguably most innovative high flying tech companies in the world. So big, in fact, that they constitute over 12% of the market cap weighted S&P 500 Index. These behemoths move markets. So, this is a very good and valid question.

Simply put, we don’t invest in most FAANG stocks because they all (with the exception of Facebook) are purveyors of pornography. While it is not a primary business activity for any one of them, we have a zero tolerance policy prohibiting the ownership of any company engaged in the pornography business (also abortion). We absolutely do not want to support or profit from this morally bankrupt enterprise.

While it was once also true of Facebook (Ticker: FB), to their credit they have really cleaned up their act on this issue. In 2018, Facebook adopted and implemented a strict policy prohibiting all forms of pornography including sex talk and solicitation on the social media platform. Enforcement of the policy, however, remains questionable. Facebook is not currently on our stock exclusions list, although we do not own them in the portfolios either at present.

Many of you reading this blog (myself included) may own an Apple device (or two!) Apple (Ticker: AAPL) makes great products, no question. Regrettably, Apple also sells sexually explicit content (primarily podcasts) in its iTunes Store. On a separate issue altogether, in August 2017 Apple Inc. CEO Tim Cook announced that the tech company would be making a $1 million donation to the Southern Poverty Law Center (SPLC). SPLC is an organization linked to pro-abortion causes that categorizes conservative, Christian organizations like the Family Research Council, Alliance Defending Freedom and American Family Association as “SPLC designated hate groups.”

Amazon (Ticker: AMZN) has morphed in recent years to become the largest online seller and distributor of almost anything you can think of that individuals purchase (B2C) — including groceries and pornography. Under the category of “Erotica” they sell adult entertainment subscriptions and books through both their bookstore and on Kindle. Amazon Prime programming is rife with graphic sexual images and scenes. They are also one of the leading retailers of sex toys and sex dolls. For these reasons, Amazon has been named to the 2019 Dirty Dozen List by the National Center on Sexual Exploitation.

Netflix (Ticker: NFLX) is one of the greatest technological innovations of our day serving some 50 million subscribers. You may be one of them. I am too. There is a wide variety of entertainment and content available to stream video right into your living room TV or computer – movies, Television shows, and documentaries for all ages, ideologies and lifestyles. Some of its MA and unrated material can be found under the category of “Steamy.” And now Netflix has gotten into the business of producing and curating original content, including exclusive documentaries focused on the pornography industry. Netflix also ranks on the 2019 Dirty Dozen List.

Google (Ticker: GOOGL), officially incorporated as Alphabet, Inc., is a particularly interesting company. In addition to promoting a very liberal social agenda, Google is the search engine connecting millions of users, including children, to pornographic images and material every day. These could easily be blocked. It too makes the 2019 Dirty Dozen List. Google is also one of the most active and aggressive companies when it comes to advocating for anti-family lifestyles. Big Brother privacy concerns with Google also top our list.

So, as you can clearly see there are myriad reasons we choose not to invest in most FAANG stocks. Remember that when you own stock in a particular company you become a fractional owner of that company which carries with it certain moral and ethical responsibilities.

 

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DISCLOSURE: Shining Lights companies are those companies we have identified as exemplary companies living out the Golden Rule and exhibiting the virtues of Integrity, Humility, Diligence, Caring and Courage. This is intended for general information purposes concerning only the values, corporate culture and business practices of the companies being spotlighted. It DOES NOT incorporate any analysis of the companies’ investment merit based on intrinsic value, fundamental analysis, etc. This must not be construed as investment advice or a buy/sell recommendation. These companies may or may not be included in our LightPoint Portfolios at any given time.