Is The Stock Market in FOMO Mode? Let’s Talk Serious...
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Hey, the stock market and Nasdaq are up again today! Is FOMO (fear of missing out) behind this stock market right now or is it something else Stocks keep going up and up and up Let’s Talk?
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Well guys why don’t you have a look at that there the NASDAQ is up once again here today in the stock market in general is up a once again here today. Again okay s&p 500 up just a little bit but it’s up okay NASDAQ up point seven 8% at this point do we have to just start assuming that the stock market goes up every day.
Like this is absolutely incredible and look at the futures are up I mean, you know, I guess you can just expect the futures always be up now or something like this, like this is absolutely incredible.
Now, you know, who knows where the market will trade out tomorrow? I just thought I’d bring that up to you guys. So that’s kind of funny, right the markets up you know, today futures up and it just seems like we’re in this market.
I mean, NASDAQ futures over 9300 just seems like we’re in a market right now. That is just uptrending an uptrend in an uptrend and just won’t quit. Let’s pull up a one year chart of the NASDAQ composite and let me show you something here.
Okay. The obviously the the market if you go back a year ago, it’s trading a little over a little over 7500 to 7600. somewhere around there roughly one year ago, 12 months ago, right. And then it goes on a crazy run, right, a huge run.
It climbs all the way till I think it topped out right around 9800 in terms of NASDAQ. Roni, Rona hits. And you know, obviously that freaked out the market in a major way it drops drops drops, I think it bottoms out at around 6600.
If I recall, and since at that time, it’s basically just been up massively for the past about two months now. And now here today, we’re trading at about 9200. And, you know, if we saw NASDAQ futures.
I believe they were trading over 9300. And so yeah, I mean, shoot another one or two weeks of this action, we’re going to be literally at all time highs for the NASDAQ. Literally, if this trend continues for just one to two more weeks, we will be back at all time highs for the NASDAQ. That is crazy.
I mean, you just think about what has happened and you know, to be back at all time highs possibly in a week or two, if this trend continues. That’s just unbelievable. It’s not like it’s just the NASDAQ’s up, okay.
The s&p 500 is now up 4.2% in the past one year 4.2%. So it’s not like the only thing that’s up in the past one years. And that’s like, by the way, NASDAQ in the past one year, so good that it’s up over 20% over 20% gain in the past 12 months for the NASDAQ.
Meanwhile, we have you know, I don’t want to go through everything but unemployment, Sky, high GDP, his worst ever corporate debt loads have been, you know, increased dramatically, pretty much across the board credit, you know, facilities withdrawn massive amounts of uncertainty in the overall economy, the business landscape.
I mean, it’s a bad bad situation plus the health side of things which we don’t know when Ronnie Roan is going to get solved because it’s certainly not solved as of yet. I mean, things are getting worse and worse on those fronts actually.
And, and and here we are one year, the NASDAQ’s up 20%. Okay, so what I want to talk about in the course, this video, we’re going to talk about what’s called FOMO. And if you do not know what FOMO is, that’s the fear of missing out.
And this was not a term that was ever talked about that much to be completely honest. Until Bitcoin really came around, there was a crypto boom. And then you know, once that boom happened, everybody was talking about FOMO FOMO FOMO.
And now it’s pretty common that this phrase is used. If a stock continues to climb higher, or the markets in general, it’s you know, for today’s video, we’re talking about really the markets in general.
And if there’s FOMO, driving this market, the fear of missing out that you can miss out on a bunch of gains, or if something else is going on here. Okay, so let’s video got 5771 thumbs up. I think we can beat that record in this video, guys.
Let’s see if we can smash it, no pun intended. Okay. So let’s go ahead and look at a NASDAQ chart for the past 10 years, going back to about you know, right around 2010 ish. And when you just pull up a NASDAQ chart, just look at a 10 year NASDAQ chart, you’re gonna see that puppy just goes up and up and up and NASDAQ 10 years ago.
You go back, it’s under 2000. Right? And here today, 10 years later trading at 9100 9200. Heck, tomorrow could be trading at 9300 Plus, right? That is a ridiculous amount of gains. Literally, if you just had your money in an instrument that basically followed what the NASDAQ does.
You mean crazy money the past decade like crazy money. And you know, you couldn’t say you make an argument that you didn’t actually take that much risk if you just had your money diversified around like the NASDAQ 100 or something like that.
That’s incredible. I mean, incredible when you just look at that chart, okay. And and so just looking at this chart, and NASDAQ, it can lead to FOMO. I mean, literally, you look at that chart, imagine you were on the sideline for the last 10 years.
You didn’t put a dime in the market, or you put very limited money in the market, right? Just looking at that can lead to fear of missing out, because you look at that and you say what have I been doing the last 10 years?
Why have I not you know, been heavily invested in the stock market. Look at the gains I could have had. Imagine what my wealth would be if I had you know, participate in it. A lot of us that have been fortunate enough to participate in this and you know, someone like myself, and a lot of you guys watching this video.
Like most of us have done very, very well and we’re very thankful for that, right? But if you’ve been on the sideline you’re looking at and then you’re like, dang, I missed some crazy gains. And I want some of that money, right?
I mean, you look at the stock, we’re talking about more than any other pull up a Tesla chart, you go back to 2011 2012 2013 tests as a stock that’s trading at like 30 4050 bucks a share back then right?
Here today in 2020 is trading over 800. You look at something like that. And man, you you start feeling the FOMO a little bit, right. It’s not it doesn’t feel good to look at that chart. If you didn’t only test the stock, you know, anywhere along the that ride, right?
Amazon stock, you go back and look at Amazon stock 2010 2011 2012. Even in 2013, you could pick these shares up for 100 bucks, 200 bucks a share. It’s 2400 plus dollars a share here today. I mean, you know, imagine the gains you do look at that.
And it’s just you you feel the FOMO if you’re sitting on that stock, you’d say why why did why did I not buy Amazon stock? Why was I not investing? Why did I not get those gains? Nvidia right Nvidia, it’s a 15 to $30 stock for years and years, basically, from you know, 2010 to about 2015 into 2016.
It’s a $15 to $30 stock. And over the past five years, it’s gone from there to over 300 $322 a share here today, okay, AMD, you want to see one of the NASDAQ poster child’s of you know, feeling that that FOMO go through your body right to another 15. AMD is a $2 stock, it’s $55 today $55.
And there was no reverse split with AMD, it’s just straight up gone, the $55 a share from two bucks in 2015. And you know, that that’s just some charts, I could have showed you a lot more, okay. And so at the end of the day, you can just feel the FOMO it goes through your spine when you look at those charts.
And if you weren’t investing, you didn’t get a piece of any of those rides really just feeling you just feel like you’re like, oh, man magian the money I could have I just invested in some of these companies, or the NASDAQ in general, right.
And it’s not just the retail investors that feel FOMO boov me on that, Okay, look at this. Hedge Funds can’t even keep up with the stock market. Most these hedge funds trail the stock market considerably.
The proof is there, the numbers don’t lie, like look at the s&p 500 versus hedge funds. s&p 500 crushes hedge funds almost every single year. And so imagine you’re a hedge fund or imagine you’re a client of a hedge fund, you’re looking at this and you’re like, you see a chart like that.
And you’re like, gosh, like why do I have my money with this hedge fund, I could literally just be in something that’s mirroring the stock market and getting just as good gains, right? Just as good gains.
Okay, never mind that if you’re an individual stock picker, and you’re a good one, you actually do the work, you have the right strategy, the gains can be ridiculous. I mean, s&p 500 is up what 4% in the past one year, the Public Accounts up 32.85%.
That was as of April 30, the gains have actually gotten a lot better for us since then. Okay. So you look at something like that. And it’s like, I don’t know, I’m no rocket scientist. I don’t have a massive team that, you know, gets me all this data.
And I don’t have a bunch of connections to executives and things like that. And yet, I’m massively outperforming the stock market. This isn’t even something that’s close. And so to beat the stock market, it’s not I wouldn’t say it’s easy, but I also wouldn’t say it’s hard.
You literally I would not say it’s easy, but I wouldn’t say it’s hard. We’ve got a ton of people in the private group who beat the stock market consistently, and are absolutely destroying it. You need three things to beat the market strategy, work ethic and discipline.
You got those three things, you’re good to go, okay. These hedge funds are desperate for the gains. Why are they desperate for gains because more and more of their clients are looking at charts like this? And they’re saying to themselves, why?
Why would I not just put my money in s&p 500 index fund, let’s just assume for a moment that you don’t want to individually stock pick, you don’t want to read in your reports, you don’t want to listen to conference calls, you don’t want to do the work.
Why not just put your money in something that mirrors s&p 500. And that’s what every single person that’s that’s in, you know, has money with all these hedge funds is thinking to themselves over the past year or two.
We’re looking at this and they’re like, I don’t know why I’m doing this. And so the hedge funds there’s, they’re desperate for gains there. They’ve got to get the game because if they don’t pick things up, these clients will continue to lead them and they will continue to move their funds to index funds and things like that.
And obviously the hedge fund industry they don’t want to lose all these clients. They’ve got to have some outperformance here, they can’t just get destroyed by the s&p 500 every year because think about a urine in the index fund.
You’re invested around the 500 biggest companies in America the best couple of companies in the in the world. You know, that’s a pretty safe strategy and probably do I want to make an argument that it’s actually much safer than a hedge fund and you’re going to likely get way bigger gains.
And then we have a lot of people that are starting that that have a lot of money that are starting to take their money Under their own control, rather than, you know, they used to put it with a hedge fund or something like that.
We have 2000 members in the stock group now, we have at least 25 members who are confirmed multi millionaire members. These are usually the hedge fund industries, clients, and they’ve decided, you know what, my hedge fund over here that I’m invested with consistently underperformed the market, why the heck am I going to go with them?
These are usually their clients, and these individuals that have money that are multimillionaires, saying I would rather pick stocks for myself then invested with these guys. Or I rather just put my money in an index fund and watch these hedge fund clowns.
You know, go and invest my money and not even be able to get destroyed by the s&p 500 just absolutely obliterated. So the fact is, FOMO is real, big investors in in these some of these hedge funds are desperate for okay.
And at the end of the day, here’s the thing that happens, okay? We know FOMO is real, if the market continues to go higher and higher and higher, there will be more and more FOMO. And once again, it’s not just from average Joe down the street, Pedro who’s investing 600 bucks.
He’s not moving the market guys, it’s these big funds with with billions 10s of billions or hundreds of billions. And don’t call them smart money. Uh, trust me on that they’re not smart money. They are some of the dumbest money in the stock market literally in a proof is in the pudding.
Look at the numbers, the numbers don’t lie once again, just because you can raise $10 billion for your fun does not make you a great investor. There’s a difference getting $10 billion in a fund is all about sales, not about games.
Remember that? Okay, so it’s all those big investors? Yeah, as the market continues to go up, if it does, the FOMO will build and build and build and exacerbates the games right? You know, what, once again, the FOMO the term really got super popular around the crypto times that’s awesome everybody to start use FOMO if we look at Bitcoin, right?
Bitcoin, if people start finding out about Bitcoin, either, you know, the average people out there who weren’t super up on the crypto markets, I remember I, you know, started kind of looking at, you know, Bitcoin and whatnot, right around, it was around 3k.
At that particular time, I started looking into it, because I started reading some articles and people were like talking about Bitcoin, and we’re starting to, you know, build a lot of hype, so there starts to be some awareness around it, then, you know, hits 5k real quick, and people are like, Whoa, what the heck, we just missed out on a ton of games in the FOMO starts to build.
And as it goes up, and up and up, FOMO builds, and more more people like gotta get in, gotta get in gotta get in till Finally, the FOMO peaks, you know, I think Bitcoin hit about 20k at that particular time, and you know, then it kind of fell from there and so much FOMO had built during that time that there was a lot of hate.
I mean, I remember I did a video is actually a really popular video, especially for those days for the channel, about, you know, the possibility that a Bitcoin crash was coming in 2018 and I did that video, probably a few weeks before, you know, bitcoin price takedown, and I got crazy amounts of FOMO hate on that there was so many people that were just saying.
No, you need to get in this, look at the price, you know, going back to the last price action, and there were so many people that were really legit delusional about what was going on with the bitcoin price at that particular time and that what was going on was not sustainable.
And ultimately, a few weeks after that video came out the peak happened and then Bitcoin fell and fell and fell Okay, now here today a Bitcoin at 500 versus you know, at the peak there was about 20,000. But the good news is for Bitcoin, there’s no more FOMO in anymore.
Now the people that are invested in Bitcoin are people that actually believe in Bitcoin long term, and that’s a healthy thing for a market, you never want to be in any asset market and feeling like you need to invest every penny because of FOMO.
Essentially, at the end of day, the fear of missing out is not good. Okay. So there’s, there’s real FOMO in this market, let’s be very clear about it. And it’s not just from the retail investors, believe me on that.
It’s from the big guys don’t believe me, the big guys are the ones that move the market, the ones that have, you know, 10 2030 4050 $100 billion of assets under their management that they’ve raised over time.
Those are the guys that are controlling us market knowledge, three other things that are also helping the stock market right now and making the stock market essentially go up and up and up in this uptrend that like I said, you know, another week or two, if we get this type of price action, NASDAQ’s gonna be at all time highs.
And that’s just crazy, right? One is the Fed backstop. The fact that the Fed is basically backstopping everything now, has made a lot of people have a lot less fear. I mean, you have things like some of these companies aren’t even allowed to go bankrupt, like a lot of the airline industry, right, you know, in a normal situation.
Some of those players would have already gone under or would have went under, but now that the feds, you know, basically stepped up and said, You know, we’re going to do this do that. And the government general stepped up which you know.
The government where are they getting that money from? They’re getting that money from the Fed, right? When that essentially happens, you have a lot of people that just get a lot less fearful and then like, why would this company gone to the feds probably just gonna bail them out anyway.
They’re not gonna let him go under right. You know, if somebody’s looking at Boeing stock Boeing’s in a pretty ugly situation right now, but the end of the day People are going to look at voting stock. Some of these some, you know, investors definitely going to look at it.
They’re like Boeing’s not going out of business like the government won’t let Boeing get out of business. Like no matter what the Fed the government in general, you know, which are basically the same exact thing, they won’t let that company go under don’t matter what and so you just have a lot less fear in the markets of a natural market.
Where businesses actually go out of business and bankruptcies actually happened and things like that the Fed backstopping everything, buying bonds, buying everything, it’s just put a lot less fear. And it’s honest, honestly, at the end of the day .
It’s increased, you know, asset prices quite considerably. Okay. Nevermind, you know, there’s a whole plunge protection team and all those sorts of things that we wanted to get into, but the Fed backstopping things big time.
Number two, okay, big is getting bigger. What I mean by this essentially, is some of the biggest companies in the world are getting much, much bigger during this time in terms of their market caps, which are helping the indexes even more go up faster and faster.
For instance, I was something I post on my Instagram yesterday, something I thought were, you know, two days ago, I thought that was really interesting. This shows you that the FB, Amazon, Apple, Microsoft and Google, right.
And this shows you the market capitalization in the s&p 500. And it’s like 20% plus now. So you know there that they can literally move the s&p 500 those five stocks can move that’s and P 500. up or down very positively or very negatively, just based upon their price action and nevermind net the weights of some of those companies in the NASDAQ’s even heavier.
Let’s go ahead and look at the components of the NASDAQ 100, Mr. Softee, apple, amazings on right, they make up like 30 to 33% of the weight. Those three stocks alone, those three stocks alone will move the market, big depending on if they go up or go down.
And never mind that you have that, you know, the smaller companies, if you want to call him that, after that, right? If you add up, you know, both of Google’s businesses, they make up around 8% of the NASDAQ 100. So at the end of the day, these components are getting so big, that those few companies are starting to really control the narrative, this market.
And if the markets going up, a lot of times, it’s because of those companies going up. And if it’s going down a lot of times, it’s because those stocks specifically are going down. Okay, the second reason why these markets continue to go up.
The third reason why these markets are continue to go up is hope. We’re seeing a lot of hope out there a lot of hope from investors that everything’s going to be okay. And I will 100% say I hope everything is great.
And I hope the unemployment drops, you know, back down to five 4%. Very quickly. And I hope corporate earnings jump back over the next year. I really do. I personally hope that happens. You know, is that the most realistic scenario?
I’m not so sure, I think there’s definitely a decent probability, we could have an unemployment rate over 10% for 12 months or longer, which would be officially a depression, if you want to call it depression, it needs to be basically unemployment needs to be above 10% for 12 months.
I think that’s definitely a possibility. Who knows if it will happen, but it’s at least a possibility. But the fact is, we got massive amounts of hope in this market right now. And when you have hope in a market.
It’s really hard to bring things down because, you know, investors between the FOMO and the Fed backstopping things, and you add on the hope that, you know, hopefully things will get back to normal.
These are the sorts of things that are basically causing a market melt up. And I think investors in the market in general should be much more cautious right now, I think people should be looking at this and saying, let’s just see how things play out over the next 369 months.
We’re going to get company earnings in three months from now. And we’re going to get a real clear picture what’s going on, because all the economies worldwide are starting to open. And let’s see what really is the truth here.
Let’s see if if things do bounce back. Great. Maybe they do Perfect. Okay, we can go from there. What if they don’t? And that’s a question I think not a lot of people are asking right now. They’re just hoping that things are going to be great.
And I just feel like at this moment, we should be more cautious and more like, let’s look at the data. Let’s see where things are at. And let’s go from there. Because the fact is the NASDAQ up 20% plus in the past one year, it’s not like we’re getting some massive discount on the NASDAQ.
We’re not, it’s up 20% Plus, in the past 12 months, the s&p 500 is up 4% in the past 12 months. The fact is, we are not getting a massive discount in the stock market right now. And when you’re not getting a massive discount in the market, and you got unemployment rates, you know, climate sky and GDP is offline and all the bad things we could talk about and talk about for days and days, right? In a market like that.
It’s best to be a little more cautious. If NASDAQ’s down 50% over the past four months, it’s fine to deploy money, boom, boom, boom, get it out there, you know, get it out there. Let’s ride on hope.
If the s&p 500 is down 40 you know, 30% 40% 50% in the past 12 months, let’s let’s get that money out there who you know, who cares? You know, if things bounce back in two years, three years, who cares?
Because the market is so cheap, right? We’re not in that type of market. The numbers aren’t lying here. So then this market is just like be a little more cautious, but hey, there’s a lot of FOMO out there.
And this if this market continues to climb, it just breeds more and more FOMO a lot of these big you know ones feel like I gotta get the money in because they don’t want they don’t want underperform their peers and also they need to step it up. They can’t even keep up with the stock market that’s not even close guys.
So hope you enjoyed today’s video as always, let me know your opinion down there in the comment section. I enjoy reading through those. So that’s thumbs up if you enjoyed today’s video. As always, thank you for watching. Have a great day.