Don't Get Distracted
March 5, 2019
Author: Bianca Yang
This is a post about avoiding FOMO, or fear of missing out. I was rereading this excellent article from Morgan Housel of Collaborative Fund recently.
This time, one of the things that popped out to me was point 14: “A tendency to be influenced by the actions of other people who are playing a different financial game than you are.” For context, his post is about mental flaws and biases he’s seen when people deal with money. He illustrates the danger of point 14 by talking about short-term traders. Short-term traders are likely playing a different game from most amateur investors, who are really best off doing the invest-once, wait 20 years, witness the magic of compounding and the strength of the global economy (or American economy) kind of thing. The danger in playing the stock market off the short-term traders’ cues is that you screw up your strategy. You start thinking that temporary price bubbles are the only reasonable price you can get your favorite stock at. You start freaking out when the market jitters by 1% each day. You start getting up at 4am to watch Bloomberg, check CNN, put a couple of stop-limit orders, drink a couple of cups of coffee, and chat up your broker, on those 8 separate 20k screens you just bought. You start forgetting what your priorities and your focus should be.
Don’t do that. Don’t get distracted. Don’t start getting FOMO.
You play the game you think you should be playing. Until there is sufficient evidence to suggest that you’re an absolute fool and that your strategy won’t achieve your goals, it’s best to sit back and watch the compounding fairies do their work. There are a million ways to skin the cat. Anybody who is skinning it a different way from you is merely another person to observe, to learn from, and to discard if irrelevant to your life goals and trajectory.
Don’t get distracted by everybody else in the world. Live by your values, focus on your priorities, build the life you think is worth living.