February 5, 2024 | Daily JAM, Short Term, Videos |
Today’s Trend of the Week is How Long Does FOMO Drive this Market? FOMO is “fear of missing out” and I’m using it to describe a market that is not driven by facts and fundamentals, but is largely focused on a fear of missing out on another rally, as many did in 2023. So what is the emotional trend and how long will it last? My sense is that there is one factor determining behind a lot of FOMO is expectations for a rate cut from the Fed. A potential rate cut could bring a lot more money into the market and drive prices higher– something investors don’t want to miss. In my opinion, we’ll have to wait until May or Jun for that cut to happen. So the hope of a cut will keep the market moving sideways and limit selling on high valuations. We’ll see some consolidation in the market leaders, but nothing that is likely to upend the market before these highly anticipated rate cuts.
November 14, 2023 | Daily JAM |
One day fluke? The next step in an end of year Santa Claus rally? Huge bear market trap? The beginning of the next big Bull market?Tough questions to answer but important for figuring out an investment strategy for NOW. So here are three things that I’ll be watching in the next few days.
June 14, 2023 | Daily JAM, Videos |
FOMO is back. FOMO (or, fear of missing out), sweeps over the market every so often. And it’s certainly been familiar in the last year or more. Portfolios and investors buy stocks because they’re going up and they don’t want to miss out, even if the stock’s valuation doesn’t really make much sense. Apple recently announced its new VR headset, priced at $3,500 while the competition is closer to $350. The new technology is impressive but whether or not there is a market for this high-priced item is unclear. Kim Forrest, from Bokeh Capital, commented on Bloomberg that “Apple’s valuation hasn’t been compelling for years. You buy it because it mints cash and the gravitational pull of it in the index makes you need to own it to keep up with the markets.” Essentially she says, I don’t like it, but I need it or I’ll miss out on one of the main stocks propping up the S&P 500 at the moment. I’ve talked about the narrow market before and this is another example of core technology companies propping up a sideways market. Investors are flocking to stocks like Apple so they don’t miss out on gains, even though the air between the valuation and price continues to increase. The worry is that FOMO can collapse very suddenly when investors decide they’re no longer willing to pay the high price or we hit a recession.
October 22, 2022 | Daily JAM |
The stock market continues to hope that Christmas has come early this year. Or more precisely that the January effect rally, which normally kicks in around the middle of November is already in place and pushing stocks higher.
What’s the evidence? At this point it’s mostly speculation–but I don’t think investors should ignore the possibility.
August 14, 2022 | Daily JAM |
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May 15, 2022 | Daily JAM, Morning Briefing |
On Monday I’m looking for a test of key market narratives. After Friday’s big bounce, we could see the return of the “buy on the dip” narrative. Or the FOMO, fear of missing out, narrative. Or the market has bottomed narrative. Or the “it was just a bounce; let the selling resume” narratives. These narratives are important because money follows each story line.
March 19, 2022 | Daily JAM, Friday Trick or Trend |
Here is what I expect: A strong spring and summer rally–powered by FOMO and by gains in Post-Pandemic economic recovery stocks. But that rally will be subject to big plunges because so many investors are poised to sprint for an exit. And all of this, later in 2022 will be followed by an actual Recession market. My worry is that the FOMO rally will make it harder for investors to make the moves they need t make now to prepare for that Recession market. The time to prepare is now nd not when everybody has bid up the price of Recession market favorites. Tricky, no?
February 1, 2022 | Daily JAM, Short Term, Volatility, You Might Have Missed |
Yesterday stocks reversed direction big time. After days of pounding lower the Standard & Poor’s 500 gained 1.89% and the Dow Jones Industrial Average added 1.17% The NASDAQ Composite climbed 3.41% and the NASDAQ 100 tacked on 3.29%. Even the small cap Russell 2000 gained 3.05%. On those numbers I ‘d say the days action looks like a big oversold bounce off of a truly terrible January. But dig a little deeper and it looks like something else–or maybe additional somethings–was going on.
July 25, 2020 | Daily JAM, Friday Trick or Trend |
Our regular (or occasional or perhaps occasionally regular) Friday series (actually running on Saturday this week) Trick or Trend looks at what might (or might not) be emerging investible trends. Exclusively on JAM. This post won't run anywhere else. Ever. Yesterday,...
November 13, 2019 | Stock Alerts, Volatility, XLNX |
On November 6 I added chip maker Xilinx (XLNX) to my Volatility Portfolio as one last FOMO pick to go with Skyworks Solutions (SWKS) and Cirrus Logic (CRUS). The stock closed that day at $93.77. It closed essentially unchanged at $93.29 today. My argument for the...
November 9, 2019 | Daily JAM, Friday Trick or Trend |
Our regular (or occasional or perhaps occasionally regular) Friday series (actually running on Saturday this week) Trick or Trend looks at what might (or might not) be emerging investible trends. Exclusively on JAM. This post won't run anywhere else. Ever. Here's the...
March 19, 2019 | Daily JAM, Morning Briefing, Short Term |
"Fear of missing out" is driving this stage of the market rally. Fund managers were under allocated to equities at the start of the year and are now playing catch-up with the indexes. And since the consensus is that the Federal Reserve has the market's back, there's...