Rule du Jour: Rule #83 - POMO - Pain of Missing Out (Patreon)

Rule #83 – POMO
I almost called it Fail Fast, but instead coined a new term: #POMO. And it’s a good one.

An investing rule inspired by this scenario: Admit errors early and act decisively—selling near a bottom is a setback, but if you recognize the stock as a generational opportunity, fail fast by re-entering promptly rather than anchoring to a desired lower buyback price, as compounding gains far outweigh the ego of 'buying low' at all costs.

This rule emphasizes humility and adaptability in investing. In Gary Black's case, he reduced his TSLA position significantly by around 95% in March 2024 when shares were trading near $183 (partly due to active trims and partly ETF redemptions), retaining only a small stake. He then exited the 5% remainder, around $358, later on, which he claims was the price he sold at, when really he sold the bulk at $183. While "buy low, sell high" is sound in principle, claiming an exit at $358 can be misleading if the bulk was offloaded much lower, effectively locking in losses on most of the position. Had he recognized TSLA's long-term potential earlier and failed fast by buying back during the recovery (instead of advising to wait for $240 or below as of September 2025, when shares are well above that), the opportunity cost of missing the rally could have been avoided. Generational trades like TSLA reward conviction over rigid price targets, especially when the thesis (e.g., autonomy, energy, robotics) strengthens.

Now Let's DIg into the Psychology of this:

The Pain of Missing Out vs. FOMO

Missing out on a major opportunity creates a unique psychological burden. Unlike FOMO, which drives people to chase trends impulsively, the pain of missing out is rooted in regret and opportunity cost—the sense of “what could have been.”

I personally missed out on the early run of HYPE after watching it since Jan 2025... but by mid year I had missed out on a rampage but decided it was not too late to jump in. So in order to catch up, price was at $39 I decided to Perp it hard... and that has proved to work out very nicely. Update on that soon.

That dealt w my POMO.

Back to Gary. His regret triggers cognitive dissonance: to protect his fragile ego, he tries to justify his decisions, often turning negative or critical toward the opportunity he missed. Over time, this defensiveness can harden into extreme toxicity (Ross Gerbil, Gary Black, Meet Kevin, Fred Lambert etc), where POMO investors highlight flaws, dismiss successes, or hope for setbacks to validate their past choices. He is now clinging to $UBER as his Tesla replacement, while the irony is that over time, TSLA will severely hurt UBER.

In investing, this shows up when someone sells too early, watches the stock rally, and then anchors to their exit price—unable to re-enter higher, yet unable to let go. The result is a cycle of regret, rationalization, and negativity that is very different from FOMO but is equally destructive to rational decision-making.

SUMMARY

It’s never too late to board a winning train. If you exit too early and the rally resumes, don’t be afraid to chase. While the rule is usually “don’t chase, replace”, with generational assets you sometimes have to bite the bullet and get back in.