Facebook has something in common with Tesla. Here's what it is.
What does electric carmaker Tesla have in common with social media giant Facebook?
Well, if you take a look at one chart, a whole lot.
Tesla and social media companies like Facebook, Yelp, Pandora, and the like are all momentum stocks. That is basically a polite way of calling them highflyers.
Calling social media stocks hot this year is an understatement. The most popular tracking ETFs for that group –the Global X Social Media Index ETF (the SOCL) – is up 48%. Besides the expected American sites in that space such as Twitter and LinkedIn, it also includes Chinese internet companies like Tencent and SINA.
Here's where it gets interesting: Chart the ratio of the SOCL versus the S&P 500 index since July. This shows the relative price of the sector versus the general market. Take that chart and overlay it on top of a chart of Tesla during that same time period andRead More »from Why Tesla’s pain is bad for Facebook