Fear Of Missing Out? Wall Street & Retail Hang On.

The “Fear Of Missing Out,” or “F.O.M.O.” is a centuries-old behavioral trait that began to get studied in 1996 by marketing strategist Dr. Dan Herman.

“Fear of missing out (FOMO) is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make one’s life better. The fear of missing out is also associated with a fear of regret. Such may lead to concerns that one might miss an opportunity. Whether for social interaction, a novel experience, a memorable event, or a profitable investment.” – Wikipedia

Over the last couple of years, the “fear of missing out” went mainstream. Young retail investors armed with a “stimmy check,” the Robinhood app, and membership to WallStreetBets piled into the financial markets. The lure of easy money and lavish lifestyles was too hard to pass up.

However, recent events are the point where F.O.M.O. became most visible. In reality, the “fear of missing out” has been with us for over a decade. As shown, repeated rounds of monetary interventions created a sense of moral hazard in the financial markets.

Fear Of Missing Out, Fear Of Missing Out? Wall Street & Retail Hang On.

What exactly is the definition of “moral hazard.”

Noun – The lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance.

The massive Federal Reserve interventions provided a perverse incentive to take on extreme forms of risk. From speculative I.P.O.s, S.P.A.C.s, or Cryptocurrencies, investors believed the Fed was protecting them from the consequences of risk. In other words, the Fed effectively “insured them” against potential losses.