I've been telling investors for years to buy (most of) the so-called FANG stocks -- Facebook, Amazon, Netflix, and Google -- for a reason that has nothing to do with price-to-earnings ratios, their popularity with large investors, or their chart momentum.

That reason is simply technological domination. In a special report for Zacks Confidential in June of 2016, “Big Economic Disruption: Big Data, AI, and Robotics,” I highlighted recent economic research about the impacts of automation on both developed and emerging economies.

Technology at Work v2.0: The Future Is Not What It Used to Be built on 2013 research by Carl Benedikt Frey and Michael Osborne which found that 47% of US jobs were at risk of automation over the next two decades.

Then there was this startling projection:

Risks of job automation in emerging economies such as China and India are as high as 77% and 69% over the next two decades.

As a technology investor at Zacks, I quickly became more interested in the pace and nature of innovation and automation after I saw the crisis ahead for literally billions of workers in the next 10-20 years.

I wanted investors -- who are also workers, parents, business owners, and professionals with their livelihoods at risk -- to be able to prepare for what was to come.

To at least partiallycapitalize on the waves of disruption and transformation we could never hope to stop, my top three investment recommendations in that report were Alphabet (GOOGL Quick QuoteGOOGL - Free Report) , Amazon (AMZN Quick QuoteAMZN - Free Report) , and Microsoft (MSFT Quick QuoteMSFT - Free Report) .

My rationale was simple then but maybe not as obvious as it is two years later: these companies have thousands of employees dedicated to invention, engineering, design, research and development and they are constantly talking to, or buying, the latest small company innovators.

Indeed, Google Ventures (now just GV) has held a portfolio of over 300 startup companies across all tech-focused industries for several years.

The Future is Coming at You Fast

Then in early 2017, I read an important book by the historian Yuval Noah Harari titled Homo Deus. At the risk of writing science fiction, Harari extrapolated the past and current trends in technology and culture into a future that would be dominated by the super-rich who could become "super human" with all manner of biological and neurological enhancements.

Obviously, the rest of humanity, out of work since there were no jobs that automation couldn't take care of, would be their servants, content with some version "universal basic income."

Even if this dark dystopic vision is too far-fetched, it painted a vivid picture of technological innovation accelerating -- possibly beyond our control. And when in doubt about how it might turn out a decade or three from now, I re-upped my position that investors should be fully loaded with the top, breakthrough companies, like NVIDIA (NVDA Quick QuoteNVDA - Free Report) .

In fact, since I never really cared that much either way for Netflix as an investment (even though it qualifies for my "franchise" definition), I swapped it out and made NVDA my "N" in FANG.

You can learn more about Harari's book and my conclusions in my May 2017 podcast and article What to Do Before the Machines Take Over.

Where's the Productivity and Who Hid the Inflation?

But many investors have resisted the siren call to buy Amazon, Alphabet, and NVIDIA because they either didn't like their sky high P/E multiples, or they didn't believe their growth was sustainable.

Meanwhile, I continued to assert that the economics of innovation were creating another "this time is different"moment, just like when the Internet or the smartphone were recognized as world-changing industries.

I just had to find a way to explain it better. And in December 2017 I came up with a great way. I wrote another special report for Zacks Confidential titled The Technology Super Cycle where I solved two puzzles that most investors and economists had been struggling with the past two decades.

In my thesis, I used the work of two economists to help me explain (a) how productivity was "hidden" in the government's data, and (b) how inflation was kept under wraps by massive new technological efficiencies that changed production and distribution processes by orders of magnitude, especially as they disrupted entire industries and career fields.

In essence, this is what Intel, Microsoft, IBM, Google, Amazon, and NVIDIA have wrought.

And on July 15, the Wall Street Journal took their own stab at solving the same puzzles in The Problem With Innovation: The Biggest Companies Are Hogging All the Gains. In the well-researched article, Jason Douglas, Jon Sindreu and Georgi Kantchev used other economists to answer their burning questions about why innovations were not still "diffusing" throughout the economy and handing productivity gains to all companies.

(Note: In the video that accompanies this article, I incorrectly assigned credit for the WSJ story to the NYT.)

The WSJ piece is definitely worth your time, even though I answered the questions better with my economists than they did with theirs. Economies are not orderly systems with lots of equilibrium. They are chaotic cauldrons of complexity, fueled by and producing disruption and transformation in a viral, recursive, but never closed cycle.

You can get a copy of my special report The Technology Super Cycle by emailing Ultimate@Zacks.com. Just tell 'em Cooker sent you.

I elaborated on some of these themes in last week's video Stock-Picking is a Cult where I highlighted two concepts every investor and citizen should stay familiar with: creative destruction and punctuated equilibrium. Along with human ingenuity and tenacity, these are the main engines of economic progress.

Facebook: Not Just Another Social Media Darling

Even though I kicked Netflix out my "future-creating companies” club -- and I always add Apple (AAPL) as a second "A" -- I always keep Facebook too.

Why? How is Facebook a revolutionary innovation enterprise when they make 95% of their revenues selling online advertising?

First, Facebook is only #2 in digital ads behind, you guessed it, Alphabet. And just like the GOOG, FB is busy making sure it is at the forefront of every possible impact technology innovation has on society.

That's why they poached Regina Dugan in 2016 from Google's top-secret lab Advanced Technology and Projects (ATAP). Before she ran Google's other "skunk works" (Google X was a long-known internal tech incubator) Dugan was the chief of DARPA, the Defense Department's Advanced Research Projects Agency.

But Mark Zuckerberg must have made the brilliant engineer an offer she couldn't refuse in 2016 when she hopped ships and began experimenting in Facebook's Building 8 on their Menlo Park campus. Dugan left Facebook early this year to explore other secret projects. But Since Zuck and Co. aren't so secretive (anymore) about what they're up to, I'll let them describe what goes on in there...

Building 8’s goal at Facebook is to create and ship new, category-defining consumer hardware products that are social first. To do so at scale. And to power this with a breakthrough innovation engine modeled after DARPA. As a team of world-class experts, we drive innovation in the areas of augmented and virtual reality, artificial intelligence, connectivity, and more – and operate on aggressive, fixed timelines with extensive use of partnerships in universities, and small-large businesses.

China Beckons, China Shuns

Speaking of Facebook innovation, in the video that accompanies this article, I forgot to mention the big news this week for them in China.

On Tuesday, Reuters reporter Cate Cadell published Facebook plans innovation hub in China despite tightening censorship and opened with this sentence...

Facebook has set up a subsidiary in China and plans to create an “innovation hub” to support local start-ups and developers, the social media company said on Tuesday, ramping up its presence in the restrictive market where its social media sites remain blocked.

But maybe I forgot to mention it because I knew it was too good to be true that Facebook could be warming up to Chinese officials and getting cozy in Alibaba's (BABA) home turf. Today, Dow Jones is reporting that the "long campaign to re-enter China has been hit with another reversal."

Apparently the listing for the $30 million subsidiary had been pulled from the national business-registration webpage. Yang Jie in Beijing and Liza Lin in Shenzhen wrote...

“The action suggests the hub plan has been sidelined, likely because of internal dissent among different levels of Chinese government over the Facebook effort, according to people familiar with the matter.”

This is not a big setback. FB will keep working to figure out how to get access to the largest middle class on the planet, as well as a young and hungry citizenry full of math and science fans.

And I'm still not betting against Facebook -- ever again. I bought the investor panic to $150 on all-things Cambridge Analytica in March and then I sold too soon when the stock couldn't make new highs above $195 on more "fake news" fears.

I promise if the stock pulls back under $210, I won't make the same mistake to doubt the Zuck. But if you are along-term investor, just buy it on any pullback after earnings tonight.

Disclosure: I own NVDA shares for the Zacks TAZR Trader portfolio.

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators and TAZR Trader services. Click Follow Author above to receive his latest stock research and macro analysis.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>