It’s called “FOMO,” or the fear of missing out.
Like when your dumb neighbor, at the start of 2021, bought a new Tesla Model S with his tech stock gains.
Or last November, when your neighbor told you about his $100,000 profit in cryptocurrencies … that he made in less than one month.
All of a sudden, you were more worried about what you might be missing — than what you might risk getting yourself into.
That’s FOMO.
Over the years, FOMO has sent countless investors to the poorhouse.
It ran rampant when pandemic stocks like Zoom, Etsy and Peloton soared by upward of 700%.
Now these stocks are down more than 90% from their peaks.
It’s easy to get caught up and invest with the crowd because FOMO is a natural instinct.
It’s not your fault. It’s how we are wired. Scientists call it our “herd instinct.”
This kind of thinking was valuable for our caveman ancestors.
Sticking with the herd made sense for them. Go their own way, and they’d end up as a wooly mammoth’s lunch.
But that same FOMO has driven investors into the worst losing investments of our generation, including:
- Dot-com stocks before the bust that saw the Nasdaq plunge 78% from its high.
- Financial companies that were driven by subprime profits before they plunged more than 50% during the 2008 financial crisis.
- And stocks like Beyond Meat, off more than 80% from its high in 2021.
These trends are exciting, promising innovation and hitting headlines with plenty of star power.
But the writing was on the wall, every time.
Yet it’s not easy to tune out your FOMO and go against the crowd.
I know from personal experience.
Back in 1999, I wrote that: “The internet stock craze will probably go down in market history as a textbook example of a mania.” And I caught hell for it.
Some of my readers told me I was crazy. That I didn’t know what I was talking about.
They said the same thing in 2005 when I warned them about the housing bubble three years before it collapsed.
Likewise in 2021 when I told them to steer clear of meme stocks like GameStop and AMC.
Did they listen? Many did, but some didn’t.
But I never wavered.
That’s because I understood one important fact:
“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”
Although Ben Graham, Warren Buffett’s teacher, said it decades ago — it still rings true today.
The Obvious Alternative
Instead of following the crowd, all you have to do is go in the other direction.
I look for “anti-FOMO” stocks in growing industries … the kind that most investors are happy to miss out on.
And since most investors hate them, those stocks are usually selling for a huge bargain.
This year, semiconductor stocks have been one of the best “anti-FOMO” investments in the market.
The iShares Semiconductor ETF (Nasdaq: SOXX) is down over 30% this year.
That’s despite projections that the global semiconductor market will double to $1 trillion by 2030.
And that’s why we’ve been adding semiconductor stocks to the portfolio this year.
Once we buy them, all we need to do is sit on our butts and wait.
Because over the long term, the stock price follows the fundamentals of the business … and we make big money.
In fact, we already have five semiconductor stocks in our Alpha Investor portfolio.
Some are already up as much as 123%. But 4 of the 5 are still under my current buy-up-to price.
I call one of the recommendations:
That kind of real-world opportunity is what investors should worry about missing out on — even if it means standing against the crowd.
You can get my semiconductor stock recommendation and more in my new Buy Alert Report.
Regards,
Charles Mizrahi
Founder, Real Talk