Grass Greener

Is the grass greener on the other side? Chewbacca doesn’t give a damn.

I first heard the acronym “FOMO” used in a sentence when I, like many bored Americans entering month three of social distancing in June of 2020, decided to download an upstart app called Robinhood…

By now, many of you have watched the 2023 movie “Dumb Money” which chronicles the madness of the rise and fall and rise and fall of GameStop (GME) stock and the part Robinhood played, both good and bad, in all of that chaos.

While I was no Keith Gill (aka Roaring Kitty), I too found myself caught in the whirlwind of meme stocks in January of 2021.

Gill’s overnight success and his resulting fame, by becoming the messiah of the consumer investor sector of the stock market, produced a cottage industry of novice traders who would take to a variety of social media platforms to pontificate the next big Wall Street gamble.

My particular social media outlet of choice was Twitter (now “X”), and I followed anyone who appeared legitimate in an effort to get my tip fix. Never mind that by this time it had been well-known that Twitter contained a glut of known bad actors, bots, and general loons. If someone on Twitter had a tip to give, I was listening.

My 2021 investment strategy, summarized

By blind luck, I bought several option calls of AMC stock (the movie theater chain) in January of 2021, which turned out to be a rather lucrative decision.

Options are a far more risky investment strategy in the world of stocks, in that you essentially bet on a particular stock to be higher or lower, by a price you select from those being offered, and if it rises or falls to that particular price by the time allotted, you win. If it doesn’t, you lose. If you lose, you lose every penny of what you bought the option call for, but if you win the call can be highly profitable. One other note: the cost of an option increases with the more time you choose to predict it will hit your price by, and conversely the cost of an option decreases if you give yourself a short period of time to make the price.

Here’s two examples of the above:

Stock X is currently trading for $10. There are currently several options being offered, predicting the price of the stock will be either higher or lower by a date from today. I choose to purchase an $11 call for a month from now. The call is selling for 30 cents, but because a call is the purchase of a contract that allows you to keep 100 shares of the stock, the price I have to pay for the call contract is 100 X 30 cents for a total of $30 that I must pay. If that call hits $11 thirty days from now, I’m in the money. If it doesn’t reach $11 by that same time, I lose the $30 I bought it for. The amount of money I can make is actually limitless, because if the stock price exceeds $11 by a large number, I can sell my call to other traders, earlier than 30 days, for a new market driven asking price.

Now I buy a call on Stock X, which is the exact same stock as example 1 (remember that the stock price is currently $10), and also predict it will hit $11, but this time I want extra time to give the stock a chance to get to $11. So I buy a call for $11 to hit six months from now. I’ve only changed the time, but now the cost of this call option is $160 as opposed to the $30 call option in example 1.

If you’re drooling already, never fear, this is where things get a bit more exciting.

On January 25th, 2021, and on the advice of my financial investment team of Twitter hacks, I purchased 40 AMC $6 call contracts that were set to expire just four days from the date of purchase on Friday, January 29th. The stock was currently trading at around $5, so I had to gain at least $1 on the stock in order to not lose the entire $2,280 I spent to buy these contracts. As I write these words now, I still shake my head in disbelief. I can assure you that under normal circumstances, no one would make a purchase like this, or at least no sane person would. These, however, were not sane times, and my FOMO had already been hyper engaged as I watched laypeople from all sectors of life cash in big time on the already surging Gamestop stock which had seen a 300% increase from the beginning of the year, just three weeks earlier.

January 27th, 2021: TIL that it’s easy to make money in a stock market that you can throw darts at and find a winner.

On January 27th, I awoke to chaos. AMC stock was already trading at over $20 a share, or in other words it was a 323% increase from the $4.81 it had been trading at when I purchased the call options just two days earlier.

 I had just been prescribed progressive reading glasses, so I still wasn’t used to reaching for them, and combined with morning grogginess I continued to rub my eyes as I had clearly been looking at incorrect information. Finally recovering my glasses, and as my vision came into focus, I was staring at my current balance of $50,000!

I don’t remember the next several minutes, other than general scene being reminiscent to the Jackson Steinem boiler room of “Wall Street” shortly after Bud Fox starts sharing the tip he received from Blue Horseshoe.

That was a good day, but as the law of polarity teaches, this would not last.

The Securities and Exchange Commission (SEC) announced their decision to charge eight men from Atlas Trading with a “pump and dump” scheme on December 14, 2022. I, along with many others, followed these men on Twitter, which is to say whatever they said to do, I did. Who knew not to trust strangers with your money? In the eight months following my January 27th high, I watched almost every penny I had “made” on that big day dissapear, as I continued to double down on risky investment advice by people with handles such as @MrZackMorris.

September 6, 2021: TIL not to take investment advice from twitter.

Fear of missing out (or FOMO) has been a strong emotion that has governed so many of my decisions throughout my life. So naturally, and somewhat ironically, it is also one of the things I most wish I could change about my genetic makeup. FOMO used to be called something else: impulse control.

I see impulse control demonstrated in Chewey all the time. Sure, he along with most dogs, have their “squirrel” moments. These moments most frequently occur on windy days, which are particularly prevalent in New Mexico during the spring, with gusts often reaching 40 to 50 mph. Walking Chewey during the time of the year can be both comical and terrifying as, if not on a short leash, he will fearlessly charge into oncoming traffic to grab blowing leaves that no doubt remind him of prey or toys.

But Chewey’s impulsivity, unlike mine, subsides the moment I yank him back to my side. He doesn’t spend the rest of his walk brooding over the leaf that got away. Contrariwise, Chewey quickly recovers from his futile hunt and instantly begins wagging his happy tail the moment he is back on the walk.

Impulsivity is to be nothing more than identified with the mind, allowing time to creep its way back into existence, when nothing matters more than the present moment of our “walks” through life. We believe that if we can obtain what our impulsivity is screaming we must have, that life will somehow be better. Chewey’s lesson of the unobtainable leaf is clear: enjoy the walk.

If I only had that leaf: Chewbacca’s sadness over his failure to catch life’s leaves is always short-lived