Tech stocks have led the market higher for years, and now they’re dragging it down. But we are far from the end of tech’s era.
What we’ve seen in the markets recently is an expected, albeit abrupt, interruption in a mega-trend that’s going to continue for decades – maybe even forever.
We only have to look at the two hardest-hitting tech darlings to see what’s happening right now.
Here’s how far this will all go, and how to play this situation for all it’s worth.
The Real Cause of the Political Standoff
The two leaders to turn to are Facebook Inc. (NasdaqGS: FB) and Amazon.com Inc. (NasdaqGS: AMZN).
Both of these companies are the leaders in what they do. Facebook practically wrote the book on social media, and has 2.2 billion users to prove it. Amazon went from a bookseller to grocery outlet to everything in between.
The problem for both of these giants is that they’re skiing downhill at breakneck speed and are way out ahead of their skis. They’re ahead of regulators everywhere, ahead of politics, and ahead of the trends that they eventually become the standard.
Specifically, in Facebook’s case, as said in the Heisenberg Report, “… it was always absurd to think that Facebook [was] going to continue to operate unfettered as the preferred medium of (un)civil discourse once it became abundantly clear that [the] platform [was] being used(in some cases by bots operating at the apparent behest of foreign intelligence services) to manipulate the public.”
That’s Facebook’s problem in a nutshell. Of course, it has other issues, but the lack of regulation of social media sites is now front and center. And that’s shining a light on how all emerging technology companies and their “new age” business models are being regulated.
In Amazon’s case, it’s about two things: sheer size and politics.
In terms of size, Amazon is a category killer. It has killed bricks-and-mortar retailers and malls, for one thing. It’s killing small business retailing start-ups, and it’s killing budding competitors in areas like home connectivity and cloud computing.