FOMO is stronger than ever given social media, the 24-hour news cycle and various fintech apps that facilitate equity trading.
FOMO (“Fear Of Missing Out”), is stronger than ever, especially among the retail trading community. Retail traders are flush with cash coming off of 2020’s Federal Government issued checks and enhanced unemployment benefits. Technology has enabled FOMO to reach a frenzy with bullish investment pitches and trading tools accessible on every screen and phone.
- Social Media: Facebook and Twitter are littered with equity trading gurus, trading communities and related content that targets retail investors. YouTube is also cluttered with promotors pitching various trading strategies delivered as dedicated channels or run as YouTube Ads. YouTube Ads often feature the financial promotor pitching his or her service from the beach or in front of a large beachfront residence likely owned by someone other than the promotor. Where is the SEC?
- Financial News Media: CNBC and Bloomberg only give air to happy talk where valuation is an afterthought. CNBC religiously promotes Bitcoin on its YouTube channel. The 24-hour news cycle adds fuel to the fire, making it increasingly difficult to “tune out” market-related chatter.
- A lot has changed since 1999: The last great equity bubble took place in 1999, well before the advent of social media, YouTube, cryptocurrency, various fintech apps such as Robinhood, eToro, Webull, Square and the fractional trading phenomenon. Bullish content spins traders into a fever pitch and fintech tools provide a low-friction way to act on trading impulses.