It looks like Jim Cramer's acronym FANG has come back to bite investors. Cramer coined "FANG" to represent Facebook, Amazon, Netflix and Google and point out the stocks that are working in the market. But on a day when the averages took a total nosedive, he warned that FANG's leadership now represents everything that is terrible in the market.
"I want people to know, loud and clear, that FANG, the isolation of a handful of stocks that can power higher in spurts like we haven't seen in ages, is a bad thing, not a good thing for the market," the "Mad Money" host said.
Right now, Cramer sees that mutual fund and hedge fund managers are desperate for growth and are willing to pay anything for it. That funnel for growth is getting smaller by the day, which sends them to look at the names with proven stories and high prospects—thus they are hungry for FANG.
And Cramer gets why the market loves the FANG stocks. Amazon reported a truly outstanding quarter and hasn't even scratched the surface in China. Netflix wowed its fans with its new sign-ups and has become even more loved overseas. Not only that, but it doesn't plan to go into China until next year. Google was also finally able to shake its reputation of being a reckless spender when it brought on Ruth Porat as the new CFO.