FOMO, a new acronym for our vernacular !

[frayne]

Reading my latest weekly copy of the Bloomberg rag and an article on the current market and ran across this little acronym gem, FOMO or fear of missing out.

Since the election the DOW has gained what seven or eight thousand points. Maybe this run up predicated on deregulation and tax reform has already achieved equilibrium, in essence the train has already left the station for those in the FOMO camp ?

Just a thought and we can always use new acronyms !

 

[ripper1]

I have a friend who got out a few years out.....but he has FOGI....fear of getting in.

 

[candrew]

Is it accurate to say that either approach (FOGI/FOMO) can lead to AFU?

 

[Philliefan33]

FOMO has been in use for at least six years. I first heard it from DD who used it to describe why she never got enough sleep at college. (FOMO on a good party)

 

[copyright1997reloaded]

When there is a lot of FOMO, the end (of the boom) is near. When the market is predictied to be dead forever (e.g. 1982, 2009), i.e. Fear of Getting In (FOGI), the bottom is near. In 1999, there were so many people who weren't market investors asking me questions about investing. In 2002 they were selling everything. In 2006 people were telling me how real estate was so wonderful. In 2008 and 2009 they were desperately selling everything (or losing them to for closure). In 2009 the world was going to end. And so on. Fear and Greed drives market cycles, and will continue to do so. This is not only true from an individual investor perspective, but also from a business capital allocation perspective.

I am a closet, chicken market timer. What does that mean? It means I have the vast majority of my investments in for the long haul using time tested allocations. But, I have (and will) deviate around the edges and/or let allocations get a bit skewed over time based on my imperfect assessment of fear and greed.

I don't think the run is yet over. Yes, we are getting closer to that FOMO moment, but I keep asking myself are we at March 2000 yet or is this really more like 1998 or early 99? I only theorize this based on market internals and the fact it isn't just the generals that are still advancing. Having said that, yesterday was not a good day (in terms of the intra-day reversal and closing near the lows), but I don't think/guess/gamble that we have seen the peak yet.

Even though I don't think we've seen the peak, I've been a net seller in 2018, but it represents a tiny fraction of my investments.

 

[Ed B]

I am struggling with FOMO right now as I approach my RE launch. My new ER target is June 1st this year. I need to move more money to the stable value fund in megacorp's 401k to fund about 4 years of distributions. But things are going so well I hate to miss out. Its silly and irrational and I will move the money very soon. I almost did it a few minutes ago.

Edit: I made the transfer after posting this. Locking in today's 1% jump helped with the FOMO.

 

[gayl]

Yeah. I have a GTC conditional order to trade 143 SPY for 770 SCHZ when SPY hits 281. Will lower stock & stock indexes to under 90% of portfolio FOMO

 

[splitwdw]

If you restore Ford vehicles you know this "FoMo" parts or Ford's kid character, FoMo.

 

[copyright1997reloaded]

I am struggling with FOMO right now as I approach my RE launch. My new ER target is June 1st this year. I need to move more money to the stable value fund in megacorp's 401k to fund about 4 years of distributions. But things are going so well I hate to miss out. Its silly and irrational and I will move the money very soon. I almost did it a few minutes ago.

Edit: I made the transfer after posting this. Locking in today's 1% jump helped with the FOMO.

Glad to see you made the move. This reminds me of people I worked with (when young) who were trying to decide when to sell the company stock to get money required to close on a house which they had signed a contract on. My answer was always "What, are you nuts? You need to sell it RIGHT NOW so that you KNOW you can close on the house."

I guess your case might be a bit different if you decided you could take more risk on the out years...but even then the transfer for the first year or two needs to be locked in.

 

[RonBoyd]

Warren Buffet used FOMO a couple weeks ago to explain the rapid rise in the price of Bitcoin.

 

[mickeyd]

BOHICA


Bend over here it comes again

 

[akidagain2018]

I think: we old. Say it isn't so! Surely we haven't all been working and managing our FIRE plans so much that those of us with kids have missed the whole FOMO thing on social media - insert eye roll here. Can't believe I know what FOMO is -- because this is the extent of my social media, and I really despise the original - FB . FOMO re: the markets, meh. Not sure I like it. But yeah, that's the range the markets are in now. FOMO - a la millennials and their social media acronyms they developed as kids to hide stuff from their parents, aka, chat in code. No?

 

[RobLJ]

FOMO could be a useful concept--I've used it in biotech investing (and at 2000 when the S&P PE went above 30 and in 2006).
Basically, when an investment ramps up 100% over a year or so and the PE increases far above market norms, you are looking--potentially--at a FOMO. If earnings keep accelerating, probably not; if not, then probably so--eventually (timing is all, as Shakespeare writes.) Basically, an investment sector--or the broad market--is reaching the point where everyone is jumping in; at some point there will be no more fools to buy because everyone is rushing in to buy. This does not apply when the market has corrected/crashed, since the market will accelerate (usually) before earnings recover, by the way, so there is a reverse of FOMO. 2009-2010 looked pretty good but I didn't buy as much as I should have, although I did go up to the minimum stock allocation and above, which paid off--so far.
I suspect we may have a year or two to run, but I'm scraping gains down close to the stock allocation minimums as they run. YMMV. I looked like a fool in 2006-7 and in 1999-2000 when I was taking gains.
Afterwards, not so much like a fool. Is it market timing? Yes. I don't mind mild timing based on market valuations based on historic ranges. Again, YMMV.
I've jumped up from the 58% minimum stock allocation to 61% in only 2.5 months (64% is the max when I should rebalance, but I don't mind leaving a chunk of steak on the table.) I don't mind taking some of the "gains" even prematurely.

 

[USGrant1962]

CNN is reading e-r.org!

Do you have stock market FOMO? - Video - Business News

It is actually a pretty good piece for the general public.

 

[gayl]

Yeah. I have a GTC conditional order to trade 143 SPY for 770 SCHZ when SPY hits 281. Will lower stock & stock indexes to under 90% of portfolio FOMO

Got a bad case of FOMO. Replaced conditional order with alert & sold enough to replace funds used to pay property taxes (6 shares @ 281.5) and let the rest ride

 

[Free bird]

1982-1999 the dow rose 1400%. 1987 was a bump in the road. We should see dow 100k in 2027. I have FOBO. Fear of being old.

 

[dunkelblau]

My FOMO comes on both sides, sure it's hard to decide to sell something whose price is on a hockey-stick trajectory, but I also have painful memories of going down with the ship on 10-baggers that subsequently wiped out. So there's a very strong FOMO on a golden opportunity to cash out. Then there's the FOMO on the deferral of capital gains taxes if what I sell goes into a 'permanently high plateau'.

FWIW I think it's not hard to find replacement candidates at the other end of the pool, the vultures aren't going hungry these days. But it is hard to get excited about doing this rebalancing into 'dead money' when we're mesmerized by the price action in the fashionable names.