There’s this internet slang term you may have heard of: NGMI. An acronym for “not gonna make it,” it’s used as a bit of a dig at those making poor life choices.
Texting your ex at 2 am? NGMI.
Buying a jet ski on Afterpay? NGMI.
Turns out, it’s also the perfect slogan for the stock market. Every bull run, every crash, every frothy “this time it’s different” moment brings out the same old cast of characters, making the same old mistakes.
If you know what to look for, it’s not hard to spot who’s NGMI (and, hopefully, it’s not the face staring back at you in the mirror).
Here are some of the classic tells:
Confuses volatility with risk.
Yes, shares are volatile. No, that’s not the same as risk. If you can’t understand the difference, well, NGMI.
Chases short term trends
A good stock is one that is going up, and a bad stock is going down. Ha! If only. NGMI.
Mistakes share price with value
If you think a $100 stock is more expensive than a $10 stock, you probably think a pizza cut into eight slices is more food than one cut into four. NGMI.
Buys the theme, not the business
AI is the future, this company uses AI, ipso facto it’s a winner! If you can’t separate a buzzword from a business model, NGMI.
Thinks their broker’s on their side
Just like real estate agents only want what’s best for you. Bless your cotton socks, but NGMI.
Insists it’s not a loss until you sell
Keep telling yourself that, champ. NGMI.
Trades way too much
If you think holding a stock for more than a month or two counts as long term, well, NGMI.
Believes averaging down reduces the loss
It’s a nice idea, but maybe stop to think about what you’re saying. Otherwise, NGMI.
Obsesses over meaningless precision
You like the company, think it’s cheap, but place your buy order 2c below the market price. If you think that changes anything, NGMI.
Avoids profit to save tax
If you think that’s smart, ask your boss for a pay cut. Definitely NGMI.
Assumes a good product means a good investment
WeWork offices are very cool. The stock… not so much. Can’t understand the difference? NGMI.
Believes everything management says
You think the CEO is going to give it to you straight? LOL. NGMI.
Thinks they know it all
No, you don’t. No one does. If you think otherwise, definitely NGMI.
Follows ‘hot tips’
Your barber, your Uber driver, your cousin at Christmas lunch (all financial geniuses). Trust them with your life savings? NGMI.
Ignores opportunity cost
Holding a ‘meh’ stock for years because it’s not terrible. Meanwhile, great businesses compound without you. NGMI.
Anchors to past highs
If it used to be $50 and now it’s $10, it has to go back up! Sure, and MySpace is about to crush Facebook. NGMI.
Thinks ‘stop loss’ orders protect you
Great for generating commissions for brokers, not so good for creating wealth. Disagree? NGMI.
If any of these hit a little too close to home, fret not. All of us have operated under some flawed reasoning at one time or another. The fact we now see them for what they are shows growth.
Because if we can continue to evolve and improve, well, WAGMI.
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