CONTROLLING FEAR OF MISSING OUT!
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
CONTROLLING FEAR OF MISSING OUT!
Americans spend $70 BILLION each year on lottery tickets or about $230.00 per man, woman, and child! The fear of missing out: The feeling that others are experiencing better things than you. This fear is exacerbated by 24/7 social media sites like Instagram, Redditt, Facebook, etc. The FEAR OF MISSING OUT causes intelligent people to take high risks with close to zero odds of winning.
FEAR OF MISSING OUT – REAL AND COSTLY!
RIVIAN AUTOMOTIVE IPO – FEAR OF MISSING OUT?
Rivian is a perfect example showing how the fear of missing out drove the MUCH anticipated and talked about IPO stock to irrational prices. Traders rushed in and moved the price up in a matter of hours!
To control your fear of missing out, recall what your parents taught you when crossing the street- STOP; LOOK BOTH WAYS; PROCEED WITH CAUTION. Dad and Mom taught me this repeatedly, so I could hopefully avoid getting run over! One Saturday, I forgot or ignored this advice and started crossing a street. A vehicle was approaching and slammed on the brakes. This was the south and before the one-finger wave grew in popularity. The driver smiled and motioned me to cross. Today, MANY years {Ok Decades Latter) I try to STOP; LOOK BOTH WAYS; PROCEED WITH CAUTION when crossing the street and when investing MY HARD EARNED MONEY!
STOP; LOOK BOTH WAYS; PROCEED WITH CAUTION WHEN INVESTING YOUR HARD EARNED MONEY!
Rivian Automotive, a new Electric Vehicle {EV] manufacturer, started trading on November 10, 2021. The financial IPO Professionals, priced the stock at $78.00/share. The stock opened at $106.75. That first day of trading, Rivian achieved a ~$91 billion valuation, {number of shares X stock price} which is greater than the valuations of General Motors and Ford, ~$81 billion each. LOGICAL?
Day one made Rivian’s founder and CEO worth ~$1.7 Billion and MANY original employees instant Millionaires. Yes, Uncle Sam lit a cigar and played his favorite song- MONEY, MONEY, MONEY!
By the fourth day of trading, the stock irrationally reached ~$180/share.
Compare the three companies production numbers.
VALUATION BASED ON PRODUCTION
| CAR MANUFACTURER | ANNUAL VEHICLE PRODUCTION 2020 | MARKET VALUATION ($ Billions) | VALUATION PER CAR |
| General Motors | 6.8 Million | $81 | ~$12,000 |
| Ford Motors | 4.2 Million | $81 | ~$19,300 |
| Rivian Automotive | ~600 (2021- NOT A TYPO) | $91 | ~$152 million {Red alert warnings going off yet?} |
The above chart shows Rivian’s manufacturing numbers compared to GM and Ford. Rivian is valued higher than Ford Motors and General Electric. SERIOUSLY?.
Many traders and a few investors were buying Rivian in the early days, primarily due to a fear of missing out. Those who purchased near the top at $180/share were in for an unpleasant roller coaster ride DOWN!
COMBATTING FEAR OF MISSING OUT – STOP; LOOK BOTH WAYS; PROCEED WITH CAUTION
While I worried about missing out on the possible next Tesla, I did NOT buy Rivian. I combatted this fear by STOPING, LOOKING BOTH WAYS (researching the company and their obstacles) and decided to MISS OUT.
I reviewed Rivian’s quarterly report released on December 16, 2021, and AGAIN chose to STOP, LOOK BOTH WAYS. As you can see on the above chart, Rivian’s stock price has been recovering since that report was released.
If interested, add Rivian to your stock watch list or buy a small number of shares. FIRST DO YOUR HOMEWORK!
My preferred method when buying a high-risk asset is dollar-cost averaging. If you have $5,000 to invest, maybe you buy $500.00 or $1,000.00 initially. Purchase little enough; you will not cry like a baby when you lose 50 percent or more of your HARD-EARNED MONEY! If the stock goes up, you can keep buying additional shares over weeks, months and years. If you were WRONG and the stock goes down, STOP, LOOK BOTH WAYS and evaluate if time to sell your shares.
I recommend establishing a percentage loss you will sell. I often sell my losers when down ten percent.
DAY TRADING VERSUS INVESTING
Day trading is highly speculative and lucrative for a VERY small percentage of traders. I recommend day traders keep their day/short term trades at less than five percent of their investable assets. This allows you to speculate and sleep at night.
CONCLUSION – RIVIAN MAY OR MAY NOT BE THE NEXT TESLA
It is too early to predict Rivian will be the next Tesla. Tesla finished 2021, producing ~940,000 cars. Tesla will double its manufacturing capacity to two million EVs by the end of 2022. Most of that growth will come from two new factories: Gigafactory Berlin and Gigafactory Texas. Tesla’s growth in 2022 will depend on how smooth production ramps up at these two factories. As production ramps up, this will free production capacity at Gigafactory Shanghai, enabling Tesla to grow deliveries in a key market, China.
Despite the potential of companies like Rivian, Lucid, and 400+ more Chinese EV companies, zero have proven the competency to become the next Tesla!
Today, Tesla is the Electric Vehicle industry leader. Elon Musk has first-mover advantage, incredible battery and EV manufacturing technology, and years of learnings from mistakes.
ABOUT THOSE LOTTERY TICKETS
I confess – I occasionally buy lottery tickets because I fear missing out on winning hundreds of millions of dollars. {Let’s keep this secret between us!}. I know I have a better chance of being struck by lightning ten times in one day, than my odds of winning the lottery. I don’t even want hundreds of millions of dollars! I know how annoying my relatives would be!
LET’S MAKE SOME MONEY – CRYPTOCURRENCY IS ACCEPTED!
YOUR GREATNESS IS NOT WHAT YOU HAVE; IT’S WHAT YOU GIVE! – EXAMPLE CHARITIES I SUPPORT
St Jude Hospital: https://www.stjude.org/
Wounded Warrior Project: https://www.woundedwarriorproject.org
Folds of Honor: https://foldsofhonor.org
Wilson’s No-Kill Animal Shelter: https://wcnkas.org
TRUST ME – YOU WILL LIKE THE BELOW BLOGS! {IT’S FREE!}
2022 REVIEW OF THE ELECTRIC VEHICLE (EV) INDUSTRY
https://wealthbuildingpowers.com/2022/01/03/2022-review-of-the-electric-vehicle-ev-industry/
SHOULD YOU TAKE A GAMBLE ON RIVIAN AUTOMOTIVE STOCK?
EIGHT GREAT COMPANIES AND STOCKS, BUT……
WITHOUT MASTERING STOCK CHARTS AND SUPPORT/RESISTANCE, YOU ARE GAMBLING – NOT INVESTING!
FORGET GAMESTOCK – INVEST IN GOATS!
TESLA STOCK INCREASED OVER 700% IN 2021 – HOW TO PICK THE NEXT TESLA
INVESTING IN STOCKS IS COLOR BLIND – WHAT IS STOPPING YOU?
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
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