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
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 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.
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In terms of size, Amazon is a category killer. It has killed brick-and-mortar retailers and malls, for one thing. It's killing small business retailing startups, and it's killing budding competitors in areas like home connectivity and cloud computing.
Because of its size, Amazon was going to become a target at some point. That point in time has just arrived.
Amazon isn't in trouble because tiny competitors who have no fighting chance are attacking - and it's not because regulators are pointing antitrust fingers either. We're here because Amazon's founder owned up to his disdain for President Donald Trump in an article in The Washington Post.
That's right; Jeff Bezos may have finally bitten off something he can't chew up and swallow.
There's a Way to Profit from This
President Trump regularly berates Amazon because of The Post's coverage of him. An article in The Washington Post last week said, "One person who has discussed the matter repeatedly with the president explained that a negative story in The Post is almost always the catalyst for one of his Amazon rants."
Mr. Trump regularly calls the paper "the Fake Washington Post" and demanded last week that it register as a lobbyist for Amazon.
Of course, Amazon in its entirety is now under attack and, like Facebook, has crossed over into the political realm in a big, bad way.
New regulations will be fashioned to address the political side of what these companies do, and it will affect their business models as they exist now. Which, for both companies, has illustrated a free and very open market in every way.
But they're not going anywhere. They're just going to have to adjust.
I love both companies, and want you to own both for the long haul.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.