It was all so simple back in the 2010s. You just put your money into US tech stocks and treasuries and sat back drinking pina coladas by the pool watching them shoot for the stars.

Most famous were the FAANGS, namely Facebook, Apple, amazon, Netflix and Google. It started to go pear shaped when companies changed their names and messed up the acronym. First Google gave us another A by becoming Alphabet, then Facebook became Meta and people wanted to add Microsoft and Tesla to the must-own list. Best new acronym I can come up with is Amanta which appears to be an Indian or Greek derived person’s name meaning Gift of God.

More like divine retribution looking at the numbers for 2022. Mark Zuckerberg’s all-in gamble on the Metaverse is proving about as popular with the financial markets as a Kwasi Kwarteng budget. The share price is down 70% so far, the worst of the AMANTA tribe. I know you’ll be worried about where Mark’s next meal is coming from – it certainly won’t be from shareholders who’ve seen $640 billion of wealth destroyed in a matter of months. There are a number of factors to blame for this. A growth stock that stops growing rapidly loses its appeal – Facebook user numbers declined at the start of the year for the first time in 18 years and their overall revenue fell in Quarter 2.

It’s possible that changing fashions in social media mean that Facebook is now a fully mature platform likely to begin a slow slide into oblivion. Instagram and Whatsapp user numbers are still growing, but not all users are created equal. As people in poorer countries sign up they don’t have the money to spend on the products being advertised. If advertisers see poorer ROI they will obviously cut back thus reducing Meta revenue further. There’s no natural brand loyalty to rely on with Gen Z either – President Xi will be pleased to know that the Chinese Tik Tok platform is now more popular with Americana kids than the home grown Whatsapp. Meanwhile another of the Amata tribe, Apple, introduced software that stopped advertisers tracking I-phone users, greatly impacting Facebook advertising revenue.

The big question for Meta’s future is whether Zuckerberg’s gamble on the Metaverse pays off. The early signs are not good, with forecast user numbers for the Horizon Worlds platform being cut in half for this year. While part of me is reminded of Henry Ford’s quote that if he’d done what people asked for he’d have given them a faster horse, I remain unconvinced that this brave new world will become a major money spinner in the medium term. The technology is clunky, there is no consensus on the best way to access it – do you really want to lug a giant headset the size of a 1980s mobile phone around with you? And the ‘virtual worlds’ people are creating are not exciting users enough to keep returning to them. Even Meta’s own staff are having to be nudged to keep using the platform themselves and they are on the payroll! At least they were until the latest round of job cuts kicked in. This wouldn’t be the first time an entrepreneur was hugely successful in one field and assumed that golden touch would carry over to his new venture.

Next up in the technology Hall of Infamy is Netflix, down 50% year to date with the loss of $130 billion in enterprise value. This is probably driven by the post-lockdown hangover when our governments have generously allowed us to step outside our front door without risk of arrest and actually enjoy going out rather than binge watching The Queen. They also looked like a busted flush with two successive quarters of falling subscriber numbers at the start of the year. Quarter 3 was better but you have to question how long they can go on spending astronomical sums on content and whether its quality can remain at a level that will keep us glued to our sets now that every other leisure time option is available to us.

Perhaps the biggest surprise given its wide spread of interests in e:commerce and cloud computing is Amazon’s 40% decline. Amazon has always been famous for re-investing its profits in further growth, but taking its workforce from 800,000 in 2019 to 1.5 million in 2022 sounds like too much too soon for my liking. I’d love to know where you find that many good people in such a tight labour market. Maybe the problem is they’re not that good? There must also have been some impact from Jeff Bezos stepping back from running the company. During the last Nasdaq crash twenty years ago Amazon lost 95% of its value then proved to be one of the great investments of the next two decades. It certainly feels like one of the strongest companies in this group. As ever, the question is whether we are now at or near the bottom? I fear not yet.

While Elon Musk is fighting for free speech with his new toy Twitter, his core electric car business is down 37% year to date. $580 billion has melted away – that’s 12 Twitters worth according to my O level maths. Will first mover advantage be enough to justify continuing stratospheric valuations for Tesla, even as the world’s major manufacturers launch full electric ranges in the next 3 years? Personally, I can’t see it as they have such manufacturing scale, global distribution and maintenance facilities already in place. He will need to disrupt himself, perhaps with a new battery technology that cures range anxiety, if he wants to stay ahead of the Big Beasts who are coming to steal his lunch.

Alphabet’s loss of 36% of its value, that’s $680 billion if you’re counting, can be mainly put down to online advertisers cutting back. It’s the dumbest thing to do in a downturn, but big companies are often run by dumb people who don’t understand the importance of marketing and see it as an expense rather than an investment. It reduces the competition and the cost per click for smarter businesses so I’m not complaining. It’s not so subject to the vagaries of fashion as social media so I am sure Alphabet will bounce back at some point, though again I’m far from sure we’ve reached rock bottom yet.

While Bill Gates busies himself buying up American farmland, his alma mater Microsoft has shed 32% of its share price, a value loss of $780 billion. You have to assume it’s simply that a falling tide sinks all boats, as Microsoft has stable recurring revenues both from software licensing and cloud computing. Same goes for the final entry in our Rogues Gallery, Apple. They are down a mere 15% but such is the value of the company that even that small decline equates to almost half a trillion dollars. Are we all about to ditch our smart phones? Unlikely, though it seems a long time ago that we all anxiously awaited the next Steve Jobs presentation to see what gadget he had dreamed up next. Are we at peak Apple, a mature company living on past glories? Feels a bit like it to me, but maybe there’s something none of us are expecting that will land in 2023.

So all the great tech darlings of the last decade are hitting the skids at the same time. There are nuances behind some of the falls while part of it is a simple move to Risk-Off mindset and a flight to safety in turbulent times. These companies are all case studies in the success of capitalism. They came from raw start-ups to dominate their market. They have grown to become the biggest companies in the history of the stock market. But here’s the exciting thing about capitalism. Creative destruction. Yesterday’s disruptor becomes today’s target. Somewhere in a spare bedroom in America, or maybe even Britain, the next Bezos, Jobs and Musk are working on their master plan.

And here’s what’s really exciting and what gets me out of bed in the morning. Most of the growth in those new disruptors will happen while they are in private hands. Did you know that 87% of American companies turning over $100 million or more are privately held? That’s why high net worth investors have around 30% of their wealth tied up in private equity. That’s at least as much as they have in the public stock markets. And they don’t have to experience the volatility we’ve seen from these former stock market darlings this year. That’s why private equity is such an important part of our focus here at Beaufort and we’re seeing similarly high returns from the companies we’ve invested in. As someone smarter than me once said – success leaves clues!