YOLO. O.

One of my favorite dumb movies from the 1980s was a film called Johnny Dangerously. It starred Joe Piscopo. For my younger Dear Readers who may never have heard of Joe, he was a rising star in the mid-80s. Also starring was Michael Keaton 1.0. If you know Michael Keaton from Birdman or later movies, you only know Michael Keaton 2.0. A lot of other screen stars, including some legends, also appeared in the flick.

Briefly, the movie is a comedic homage to the gangster films of the 1920s and 1930s. Like I mentioned, it’s kind of dumb. But it’s funny. One thing that I—and probably everyone else who saw the film—remember from the movie is a gag in which Joe Piscopo says “You shouldn’t [do some thing] to me. [Name] did that to me once. ONCE!” Here’s a montage of some of those moments.

Once . . . a lifetime

I think that I first heard the acronym “YOLO” about four or five years ago. I know, I know. I was a little late to the game. I’ll appreciate your excusing an old man his lack of ironclad knowledge of the hip lingo (“hip lingo” used for comedic and ironic effect). For my fellow ignorant Dear Readers not in the know, or for other Dear Readers who don’t care know what YOLO stands for, allow me to educate you. It stands for “you only live once.”

As I recall, I first was introduced to the term on some FIRE blog or other. The gist of the context in which the term was used was that most people adopt a forever-YOLO attitude to justify their expenses and consequently are chronically financially insecure. Instead, these writers suggest, people should be more mindful about how they spend their money and time and be a YOLOer generally only when the thing or service sought is truly meaningful.

I agree with that philosophy.

But I think that my thinking may be a little more nuanced. When I hear/see people giddily saying “YOLO!,” I think of Johnny Dangerously. In my head I translate it to “You only live once. ONCE!” I suspect that the YOLO enthusiast does, too. The difference between us, however, is how we respectively read that “ONCE!”

The YOLOer will say you only live once! So go for it! Now! Right now!

Not me.

I can do basic math and understand simple statistics. I’m old. But not thaaaat old. I’m not an exemplar of a completely fit person. But neither am I a festering blob of ooze (try getting that image out of your mind now, Dear Reader). I’m fortunate to have savings and a nest egg. But I know that those funds aren’t limitless, and that the value of our investments can in an instant drop. And do so precipitously, to boot.

So, although there are no guarantees, the odds are that I’ll be on the earth for a while longer. And in some able-bodied (if not able-minded) form. Probably/Hopefully decades longer. And as long as that’s likely to be the case, I have to be mindful of short-, medium-, and long-term financial security. I can YOLO a lot of things. But not everything. And not all the time.

Wild, child

I was reminded of all this by the recent and ongoing story involving GameStop stock. Also, AMC stock, BlackBerry stock, and apparently as I’ve read today, silver. Long story short for those not keeping up on the news or who are reading this at some point in the future when the story’s long since disappeared from the headlines: the prices for these things (for which there’s no reason to believe there’s a ton of value) has skyrocketed.

The events are being fueled in no small part by a bunch of retail investors trying to stick it to the man (hedge funds, short traders, Wall Street). Apparently a lot of these retail investors are bragging about YOLOing by buying these stocks/precious metal, no matter the purchase price. Some allegedly have made real fortunes in mere days. Others allegedly have made paper fortunes.

I’m a pretty dim-witted guy, but there are a few things that I feel reasonably confident about. First, this story doesn’t end pretty. Second, there’s a reason retail investors are derisorily referred to as the “dumb money,” and Wall Street as the “smart money.”

In addition to those YOLOers who’ve allegedly made a lot of quick money, there’ll surely be more. But from all that I’ve read, a lot of the retail investor YOLOers who are getting in on these recent games are perfect examples of “dumb money.” There’s every reason to believe that a lot of these folks have no idea of what they’re doing and are risking large sums of money. Or money they have no business putting at risk. Or both.

In the end, for every retail investor who hit the jackpot and cashed out, I think there’ll be scores who lose their shirt. And pants, socks, and underwear to boot. In part because market fundamentals eventually will return, and the stock/precious metal prices will return to where they should be. Which is nowhere near where they are now. And, I think, because the smart money will recover from the punch its taken (and some smart money that’s been on the sidelines all along will enter the fray) and do what it does well. Prey on the dumb money.

I’m hoping—tho doubtful—that a lot of these YOLOers who get hammered will learn the same invaluable lesson that I did when I lost the entire $750 that I invested in the only individual stock I’ve ever purchased. An even more silvery lining would be if they learn about low-cost index funds and going forward invest any money that they can responsibly put at risk into them. And mostly or entirely avoid investing in individual stocks. At the very least, I’m hoping that they do a rethink on the second O in YOLO to read it as I do. After all, you only live once. ONCE!

And in the end . . .

All manner of people have been publicly taking sides in this purported Wall Street vs. Main Street moment. But I suspect that most of the actual participants think that the other side is made up of a bunch of fargin bastage iceholes.