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Fear of Missing Out (FOMO) (错失恐惧症)

FOMO is one of the biggest enemies for investors, especially when the market is moving upward. When a stock has recently hit their historical high, and you feel that it may go higher, and you decided to buy the stock regardless of its valuation, that is exactly what FOMO means.

Let’s take Malaysia’s stock market as an example, the share price of glove companies soared for numerous thousand percent and every investor are eager to buy these stocks. If one is able to buy the stock when it is still cheap, then he will be able to earn a lot. The most terrifying type of investors are the one that do not bother to get involved into glove companies at first. However, after seeing people after people are earning money from it, and the share price did rose to a historical high, these investors are unable to stand their ground and also bought in glove companies despite its high PE ratio by that time. These investors are the ones who suffer losses after the August-September glove correction where the share price dropped for approximate 50%.

To be honest, investors should not have a FOMO mind-set where they will sell every holding just to chase for the trend, but to make their own assessment. A more rational investor will first assess what are the risks if they buy the stock immediately, despite its valuation and peak share price. Then, they will set a few prices for them to buy, and will only buy when the share price dropped to a more rational position. Furthermore, these investors do not fear when the share price dropped because they are well aware of the glove demand is still very high globally, and the backlog can be tracked until year 2022.

One of the best quote from Warren Buffett is his Rule number 1: to not lose money, and Rule number 2 is to never forget Rule number 1. Although it may seem tedious that Warren Buffett said these kind of words but it was proven to be true. If one missed out something, for example APPLE stock, they will not lose anything. However, if you bought APPLE stock when they are priced in a very high position, you may eventually suffer losses, and that’s what Warren Buffett tried to warn the young investors, to not have the mind-set of FOMO.

In short, investors nowadays, especially during the big surge of glove companies back in June and July have the same mind-set of being FOMO, where they put all their money into these stocks. However, a wiser investor will distribute their risks into other segments too, to prevent the big drop in gloves causing the entire portfolio to suffer losses. Hence, risk management is a must when investing, even that makes you earn lesser, but the possibility of suffering losses can be minimized.

错失恐惧症是投资者最大的敌人之一,特别是在市场上扬的时候。当一个股杠突破它们的历史新高时,而你又觉得它会去到更高时,你便会不顾任何的价钱或者估值地去买。这便是错失恐惧症的征兆。

我们可以拿马股来做例子,手套板块的股价已经上涨了接近上千巴仙,而投资者们都非常想要买他。如果投资者在一开始便在低价买进,那他们便可以赚得很多。最可怕的是有一些投资者一开始不看好手套板块,但却在看到很多人都从中获益而股价也在屡屡破新高时,便不管估值有多么得高,都去买。而这些投资者便是在8月,9月手套大回调接近50%时所受伤的人。

老实说,投资者不应该有错失恐惧症的心态,以卖掉他们所有的持股来追当今的趋势,他们更应该先做出自己的评估。一个理性的投资者会评估买股的风险,而把现在的估值和股价先放一边。然后,他们会设定几个买入点,而且只会在股票跌的时候,并且价钱比较合理的时候买入。此外,这些投资者在股价下跌时不会恐惧,因为他们很清楚手套的需求,也知道他们的订单排到了2022年。

巴菲特其中一个有名的语录便是他的第一首则:不要亏钱,而第二守则便是:谨记第一首则。虽然听起来有点胡闹但这确确实实是真的。如果投资者失去了一个机会,例如买进APPLE股票的机会,他们其实并不会面对任何的亏损。相对的,如果你在APPLE股票高估值高股价的时候去买,那么你就很可能会面对亏损。而这些恰恰就是巴菲特给年轻投资者的一个忠告,就是不要有错失恐惧症的心态。

总结,现在的投资者,特别是在6,7月手套大涨的时候就会有错失恐惧症的心态,而一部分人会在手套建满仓。但其实,一个比较聪明的投资者会分散他们的风险去其他板块,来避免手套板块可能发生的大跌导致投资组合蒙受亏损。因此,风险管理还是必须在投资中执行的。尽管投资者可能会少赚些,但至少把亏损的可能性降至最低了。

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https://klse.i3investor.com/blogs/InvestingKnowEverything/2020-12-08-story-h1537450848.jsp

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