FOMO The Fear Of Missing Out is a new popular word to describe situations where investors jump on a trade impatiently, because they are afraid that if they wait, they will miss out on the opportunity!
Today, I am going to talk about opportunities that I have missed. I am not going to talk about some stocks that I wanted to buy, but I missed them. I am going to talk about positions that I was already in but closed too soon. I was in the right boat, but I jumped out too soon! I am sure I made the best decisions I could in those circumstances so I don't have anyone or anything else to blame. I take full responsibility for untimely exits. I am writing this post to share with the world that you are not alone. This happens with most of us at some time. Sometimes, we are in the flow with the market; and sometimes, I try our best but we are stuck against the flow! In this post, I am going to talk about some positions over the last year, on or after January 2020, that could have yielded excellent returns.
TVIX: This is a triple short volatility play. I was overall 400 shares long at an average price of around $67. The stock dropped to around $40 in Feb-2020. Then the COVID panic was just starting and the stock prices were going down for most companies. Only this stock, and similar bear market related stocks were going up. TVIX started going up. I closed the position at an average price of around $80-85! The stock actually touched almost $1000 over the next few weeks. During the time when almost all stocks were dropping, this one stock actually went up by around 20 times. Very frankly, I don't think I would have held this position that long. Theroricatlly, that $27k position could have, in the very best-case scenario, turned into almost 400k!
UVXY: Another triple short ETF. I was long around 5000 stocks in Jan-Feb of 2020 with an effective price of $14. I was out when the overall market started dropping but UVXY started climbing up, at an average price of $18-20. The stock peaked at $135 over a short period of 3-4 weeks!
NIO: Just when NIO started going up from the $2 level, I was long around 25000 stocks at an average price of $3! I sold all of them for under $8 by June 2020 end! After 6 months, since my exit, NIO is at $60 today! Had I held on to it that full position, I would have... lol, it really doesn't matter. I started trading NIO to make around 100k and once I had it, I happily called a quit. Actually, for NIO, I have recorded all of my traders here on a Google Spreadsheet. Check out if you are interested to peek into my trading!
PLUG: Had around 20000 stocks with the purchase price of around $2-3. I sold them all below $10! Today the stock is at around $70! (At one time, I did a quick trade of 30k more stocks so at the peak I had 50k position in this stock!)
These are some of the situations which can leave anyone scratching his head! Don't think I am too smart or successful. Here I was just showing some positions that resulted in tremendous profit potential, that actually had the potential to make a lot of money for me but I jumped ships too quickly....Let me be very frank, I lost a good deal of money during COVID panic, and then when the market was going up. I didn't think the market would go up this high and Tesla would touch $4500 split-adjusted price as of last week. I traded more short than long and that caused me a good deal of pain. My 2020 was actually painful. Please, by reading about my positions in this post, don't think I am super successful, or smart. Like most others, I have good days and bad days.
Here are some other recent trades.
GEVO: Knew nothing about this stock or company but at one point I was depressed. My picks were not moving as intended so just listened to my brother-in-law. Bought 20000 stocks at around $1.30. Sold them around $2! My brother-in-law was very bullish. Wish I had stayed longer with him! Today, within 2 months period, GEVO is trading at $13! (And my brother-in-law is minting money in his positions in GEVO ;) )
AMC: A friend told me towards the end of 2020 that he liked AMC so just to keep the stock on my radar, I bought 1000 stocks at $2.21. I thought I would buy more if and when the stock starts going up! In the last 3 days, it is going up and has gone up by almost 400%. Unfortunately, I couldn't buy more!
GME: One recent very interesting example. Last Thursday, a friend sent a message on WhatsApp that he is shorting GME- Gamestop. I never followed that stock and didn't know much about it! Checking news, I found a lot of posts/news articles about Citron fund manager, Andrew Left, who was saying why Gamestop stock was overpriced, was about to crash, and why GME was a great short play. Maybe that is why my friend was interested in shorting it! To me, it seemed that Andrew Left, and other Andrews like him, were struck, and they needed us also to short the stock so they can actually make the stock go down! Normally, greedy hedge-fund managers never tell anyone what they are buying or shorting; it is a very secretive business. Only when they want you and me to also buy or sell, so they can have prices go higher or lower, they will share such investment ideas publicly ;) Anyway, so at the market open last Friday, I bought 200 stocks at $42.70. Then I put a limit to sell at $46.50 and went for my daily hike. The position got closed within an hour or so. Then the stock touched a high of $70 the same day and closed around $60. The next day, on Monday, which was yesterday, the stock touched a high of $155 and closed around $80! Today, in the aftermarket, it is trading at $210! LOL, wouldn't you also like to hit your head against the wall to have missed an opportunity to make 500-600% return over 3 trading days! Well, I didn't know much about GME and I was quite happy with my 10% return within an hour! I am sad now because I coulda woulda shoulda LOL This is market ;) Sometimes, things go your way and sometimes they go against you. Don't confuse wins with brains. Many times, it is just that nature's positive force is with you and you are winning, and other times, the negative force is around you and you keep missing out. FOMO- it is real, and it is there in everyone. If you just go ahead and act because of FOMO, most of the time, you would end up losing IMO. The current bull run and exuberance is exceptional and is not going to last too long IMO It is just a matter of time. However, when the party is going on, just enjoy it. Don't worry much. There is only one truth in life: We came in this world empty-handed and will be leaving empty-handed. Whatever in between the entry and exit we can enjoy or experience, just do that with a gamer's spirit. If you win, don't think you are too smart. If you lose, slow down but do not stop. The wind is going to change in your favor one day. Stay humble at the peak and stay positive at difficult times. Nature's two forces are always there and that can make you feel like being on the top of Everest, and at times, make you feel like in a deep ocean.
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