Investing can sometimes feel like learning a new language, filled with buzzwords and acronyms that seem to pop up overnight. But behind the headlines and the jargon, the important principles remain unchanged. In this article, we take a closer look at some common investing phrases – and why the fundamentals matter most.
Over the years, the media has invented a thousand reasons to explain why prices go up or down. In the 1960s it was the “Nifty Fifty” (a group of around 50 large-cap, blue chip US stocks that were regarded as solid buy-and-hold investments); in the 1990s, it was the internet. More recently, the alphabet soup has grown thicker with many new catchy phrases emerging, such as: TINA (There Is No Alternative), TACO (Trump Always Chickens Out) and FOMO (Fear Of Missing Out), to name just a few.
They sound clever, and they may even look reassuring on a slide deck, but an acronym has never made a company more profitable, improved its balance sheet, or given it a durable competitive advantage.
For the last decade or so, low interest rates convinced certain investors that equities were the only game in town. Supposedly, bonds paid too little, cash was considered “trash” and so the common argument was: there is no alternative to owning stocks. But ‘inevitability’ is a dangerous word in investing. The moment you believe you must buy something, you might stop asking whether you should. In the 1970s, inflation was prevalent, so it was widely thought you “had to” buy hard assets. Some fortunes were made, but it was not a guaranteed success for all. Investing based on assumptions of certainty carries risks, while patience and diversification is valued over the long term.
This phrase has caught popularity during the ongoing tariff rollout and the political brinkmanship of the last decade. The idea is that markets wobble when promises of controversial changes are made and then recover when politicians roll back the changes and cooler heads prevail. Traders coined “TACO” as a shorthand for betting on a pullback in rhetoric.
While political events can certainly move markets – sometimes dramatically and in ways that are difficult to predict – basing long-term investment decisions on short-term political headlines can turn investing into a guessing game, rather than a disciplined approach to evaluating businesses. Over time, while politics can drive volatility, it is ultimately the quality and performance of companies themselves that shape long-term investment outcomes.
This one is as old as human nature. A neighbour brags about a hot stock, a cousin tells you about a cryptocurrency that “can’t lose”, or you see the headlines of riches made overnight. The temptation is to join in, for no other reason than not wanting to be left behind.
However, FOMO can lead investors to get swept up in momentum, narratives and emotion – especially during euphoric upswings where everyone else is making money. This is when valuations can be stretched, fundamentals ignored and short-term thinking replaces long-term strategy.
This is the essence of the often-quoted adage: “buy when others are fearful, not when they are greedy”. It’s not a call to be contrarian for the sake of being contrarian. Rather it’s a reminder that opportunities may lie in the moments when fear depresses prices below intrinsic value and when stepping in requires conviction.
What ties all of these together – TINA, TACO, FOMO – is the desire to predict market movements with repeat trends. They offer comfort because they give the illusion of certainty.
When it comes to investing, what has always mattered, and what always will, is fundamentals. Is the business earning more than it spends? Does it have a moat – in other words, a unique advantage – that keeps competitors at bay? Are the managers capable and working for shareholders rather than themselves? Will the business be stronger ten years from now than it is today? One doesn’t necessarily need acronyms to answer those questions. One more adage: price is what you pay, value is what you get. Acronyms may come and go, but value endures.
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