Internet Stocks To Lead NASDAQ To New Highs In 2015

The internet stocks are showing relative price strength after a year of price consolidation and will likely lead the NASDAQ to new highs in 2015.  The largest companies by market cap in the Dow Jones Internet Composite index are listed above.  Notice that Facebook (FB) and Google (GOOGL & GOOG) make up approximately 20% of the index alone.  Google has been moving sideways for the majority of 2014 and I think is modestly valued relative to other technology companies.  FDN is the largest ETF that tracks this index.

Akamai breaks out. Tech leadership expands.

What began as market leadership in biotechnology stocks quickly spread to internet stocks and is now perpetuating in the NASDAQ 100 mega cap stocks.  We are entering a period of broad based tech market leadership which may continue for the duration of this bull market that began in 2009.  It is important to note that both the biotechnology and the internet index has doubled in a 2 year time frame.

Facebook Up 17% After Hours, LinkedIn Trend Is Up, FDN Is The Best Way To Play Them Both

Facebook finally posted earnings results that beat estimates and will be rewarded by the market tomorrow.  However, its social networking cousin, LinkedIn, seems to be the better play.

Despite the fact LinkedIn is a fraction of Facebook's size,  it has far more predictable earnings and revenue growth data and is likely to continue its smooth growth in the future as it continues to implement more revenue generating service offerings to its members.

It is extremely hard to determine the likelihood of success of a given social network or high P/E multiple internet company.  FDN is an ETF that tracks the Dow Jones Internet Composite Index. Although it has a more modest MER of 0.60%, it is worth every penny over the long term.

Is the internet neutrality argument really important?

There seems to be an ongoing debate surrounding the prioritization of internet bandwidth and whether or not priority access to greater bandwidth should able to be paid for. What the net neutrality advocates are overlooking is the big picture.

In The Singularity Is Near, Ray Kurzweil illustrates that the following characteristics of the internet are true:

Wireless Internet and phone services price performance (increasing exponentially)
Number of Internet hosts (increasing exponentially)
Bytes of Internet traffic (increasing exponentially)
Internet backbone bandwidth (increasing in a very terraced, quasi-exponential manner)

I fail to see how attempting to charge for priority access to bandwidth have any impact on the internet as a whole over the long term. In the short term, some of the small people may be short changed while big corporations pay for the best access. But over the long term, there will be more than enough virtually free bandwidth available than we could ever use.