A slowly cooked frog?

My friend forwarded me the following chart (the upper one), highlighting the FOMO moment currently is heating up. Today's another jump to an all new high will definitely add a lot more euphoria for sure and further push up the FOMO to all new highs as well. You may think FOMO is usually only reserved for retailed or amateur investors. Well, apparently this is not the case. The chart below is actually about what the professional investors are doing and NAAIM stand for fthe National Association of Active Investment Managers. So the chart is showing money managers' exposure to the market. After a dip in August and October, this index is quickly rising as money managers plow money back into the market for FOMO on a year-end rally. It makes sense as they have to show positive return by end of the year. How can they miss the strong rally going on by just sitting on the sidelines? So they are all in.


Of course we have seen similar FOMOs before, two major ones back in late Apr and late Jul, three months apart. Each time, also after grinding highs for weeks, the reckoning moment came eventually and months of the gains virtually evaporated within a couple of weeks. This is typically how a FOMO will end up and when the day comes, it is typically very fast and seemingly out of blue from no where. During the FOMO time, people usually think they are smart enough to get out at the exact top but hardly anyone can do that consistently. The vast majority will have to endure enormous pains as the result, then changing their mood from euphoria to depression. Then the same process starts again and again and again!! That's why for hundreds of years, the market has changed tremendously but the human psycho has never really changed in any way.


I thought to add a S&P chart for this year to highlight the last two FOMO time period what the market was doing (the yellow cycles for both charts). And I shared this for a couple of WeChat groups last evening. A friend immediately spotted something interesting and he added a few lines to my S&P chart. What it looks like now? Yes, a frog and he even gave an extremely interesting and vivid decipher of the chart: 温水煮青蛙！How brilliant it is!! Yes, the flog feels really great initially with the slowly warming up water until it is heated so much that without knowing it, the frog faints and then dies.


So we are in Nov now, also about 3 months from the last FOMO. Will we see the frog going through the slow dying moment again? We will see probably very soon!😏😄😎