Four big stocks have been driving the markets this year, according to Miller Tabak analyst Jonathan Krinsky, and their outperformance in comparison to the NASDAQ may signal tough times ahead. He points to Tesla Motors Inc (NASDAQ:TSLA), Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX) and LinkedIn Corp (NYSE:LNKD). Unfortunately what goes up usually comes down, and all four stocks are dragging heavily on the markets today in the wake of Krinsky’s report.
Tesla, Facebook, Netflix, LinkedIn decline
As of this writing Tuesday afternoon, shares of Facebook Inc (NASDAQ:FB) had declined 6 percent, while Tesla Motors Inc (NASDAQ:TSLA) was down 4 percent. LinkedIn Corp (NYSE:LNKD) fell 8 percent, while Netflix, Inc. (NASDAQ:NFLX) was down 5 percent.
Much of the stock market was a bloodbath on Tuesday as the government shutdown started to weigh on stocks. Tech stocks in particular were getting hammered, especially Tesla Motors Inc (NASDAQ:TSLA), Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX) and LinkedIn Corp (NYSE:LNKD) because they have been among the biggest gainers so far this year. The technology sector of the S&P 500 was the biggest loser in the index.
The Four Horsemen: Tesla, Facebook, Netflix, LinkedIn
Krinsky made some interesting comparisons in his report, comparing Tesla Motors Inc (NASDAQ:TSLA), Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX) and LinkedIn Corp (NYSE:LNKD) to the Four Horsemen of the 1990s tech bubble. At that time, the four horsemen were Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT) and Dell Inc (NASDAQ:DELL).
Krinsky says the last three in that group passed on their positions to Oracle Corporation (NYSE:ORCL), Sun Microsystems and EMC Corporation (NYSE:EMC). However he said no matter which configuration of the Four Horsemen of the tech industry you use, they dramatically outperformed the NASDAQ even as it was booking between October 1998 and October 2000.
The late 1990s bubble
According to Krinsky, the first group gained 100 percent in the first year and by March 2000 was up 225 percent. The second group gained 200 percent in the first year and 600 percent by the time the tech bubble peaked.
This year’s Four Horsemen aren’t much different than either of the first two groups. The equal-weighted index of Tesla Motors Inc (NASDAQ:TSLA), Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX) and LinkedIn Corp (NYSE:LNKD) rose 205 percent this year to date and 230 percent over the last 12 months. The group has also dramatically outperformed the NASDAQ Composite, which has risen about 20 percent over the last 12 months.
