Tina Fomo → Tia Momo

Several years ago, I asserted that Mr. Market had a mistress named Tina Fomo.  Although I was not invited to the nuptials, I believe that they have been living in wedded bliss ever since.  Unfortunately, I’ve come to suspect that Mr. Market developed a bit of a roving eye recently and has been flirting with someone new – the similarly named Tia Momo.

For those unfamiliar with the acronyms above, here is a brief guide:

                TINA: There Is No Alternative

                FOMO: Fear Of Missing Out

                TIA: There Is an Alternative

                MOMO: Momentum

Over the past several years, TINA was deeply ingrained in many global investors’ mindsets.  US exceptionalism was an investment theme, particularly when it came to large-cap technology shares.  The Mag 7 became the epitome of that thesis, particularly as these companies and key peers cemented their leadership in artificial intelligence. Certainly, there have always been good investment opportunities elsewhere on the planet, but the dominance of key US stocks seemed unassailable.

Lately, however, that has not been the case.  As we can see from the chart below, other countries’ flagship benchmarks have outperformed the S&P 500 (SPX) over recent months.  The Hang Seng (HSI), Euro STOXX50 (ESTX50) and DAX are among them, though the Nikkei 225 (N225) has lagged a bit:

Year-To-Date, SPX (red/green), HSI (purple), DAX (blue), ESTX50 (red), N225 (yellow)

Source: Interactive Brokers

There are several reasons why some of these markets are outperforming, and a detailed explanation would warrant several columns of their own.  The simplest theory is that international investors, who had been overweighting US investments because of their solid performance and global heft, have been re-shoring some of their investments amidst global trade tensions.  The HSI has benefitted tremendously from China’s stimulus packages and developments in AI, such as DeepSeek.  The DAX has surged as Germany reversed course on decades of fiscal austerity, and most other indices in Europe have followed in the DAX’s wake. 

Bottom line – for global investors there ARE alternatives.

Meanwhile, the negative momentum in US stocks and positive momentum have accelerated these trends.  Investors like to back winners and shun losers, and over the past few weeks, US stock markets have not been the reliable winners that they have been for the past two years.  It hardly means that US stocks are no longer investable – there are still solid money-earners based here – but it has become evident that investors are no longer necessarily willing to pay increasing P/E multiples for those earnings.  Much of the recent outperformance had come from that sort of multiple expansion, and thus the valuation premium that is attached to major market leaders has been shrinking.

And as the US markets flounder, there is far less fear of missing moves.  We still see active traders willing to attempt to buy dips in their favorite stocks and the broad market, but whereas this had been a nearly foolproof strategy for several years, it has become unreliable in recent weeks.  Quite frankly, the bounces have been fleeting, and in the past few days it has been more profitable to sell into those rallies.  But the ferocity of the fleeting bounces shows that old habits die hard.  FOMO may be relatively dormant, but it is not gone entirely.

Thus, TINA has given way to TIA, and as MOMO has turned in the wrong direction for many, diminishing their FOMO, can we blame Mr. Market for at least checking out an alternative.  Every marriage has its rocky patches, and Mr. Market’s love of Tina Fomo might be getting tested by Tia Momo’s allures.