This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Greenberg: How Social, Cloud ETFs Defied Skeptics

NEW YORK ( TheStreet) -- Proof that there are exceptions to every rule: The Global-X Social Media ETF (SOCL).

When it was first rolled out in late 2011, I was among the very first (I'm now not proud to say) to mock it.

Historically, sector mutual funds had a tendency to arrive late in a trend. They often signaled the top. As I wrote at the time, "What always after the fact?"

And the social media ETF wasn't the only one to have a joke on me. Also check out the First Trust ISE Cloud Computing Index (SKYY), which I also rolled my eyes at in that story.

Beyond the historic top-ticking of sector funds, there was reason to be leery and (for skeptics) even embolden: For more than a year the social media fund looked like a loser. Zynga (ZNGA) didn't help. But then the likes of Facebook (FB - Get Report), Pandora (P) and LinkedIn (LNKD) spiced things up. On Deck: Twitter.

And over on the cloud side - cloud computing has been the story. The only surprise is that its biggest holding is Facebook, not (CRM - Get Report), which ranks fourth among its holdings.

Facebook? As a cloud play? Really?

Turns out anything and everything can be a cloud play. Its holdings include Microsoft (P), Hewlett Packard (HPQ) and Apple (AAPL).

According to the fund's fine print, "a security must be engaged in a business activity supporting or utilizing the cloud computing space."

Well, "utilizing" means every company.

Reality: None of these quibbles matter. The social fund was launched long before Facebook's IPO, Facebook's ability to show mobile growth and Twitter's announced IPO; in retrospect giving it a long runway -- long before "social" as a faddish investment theme peaks. (Don't get me wrong: Social is not going away, but after a while themes like these become mainstream.) As for the cloud fund, Facebook is hardly a "cloud" play, yet it leads an index that should be weighted more to Salesforce. All of which is the ultimate reminder: In this market the tide lifts all stocks. Just remember: The tide can go out as it can go in.

--Written by Herb Greenberg.

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security.


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Herb's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs