Quick Read
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Elliott Investment Management coined “FOGO,” warning that inflation, federal deficits, and debt-financed AI bets echo the speculative excess seen before the Great Depression.
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In October, the Nasdaq-100 fell 7%, yet nine of the S&P 500’s 11 sectors rose and the equal-weight index gained 5%.
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Singer recommends holding enough cash to buy during sell-offs and auditing AI stock concentration across funds to trim oversized positions.
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For most of 2026, the risk of sitting out the stock market felt greater than the risk of buying in. The S&P 500 gained nearly 13% through September, and investors who were wary of the artificial intelligence boom had to watch from the sidelines as the market climbed. Then October gave them a glimpse of what could happen when investors started asking how soon all that spending would pay off. The Nasdaq Composite fell 5.3%, while the S&P 500 slipped 0.9%.
For billionaire hedge fund manager Paul Singer, the sell-off offered an early test of a warning his firm had just sent to investors.
Paul Singer’s Warning Goes Beyond AI Stocks
Singer’s Elliott Investment Management, which reported managing $80.3 billion as of June 30, has a name for what can happen when the fear of missing out wears off. In an October investor letter review by The Wall Street Journal, Elliott called it FOGO, or “fear of getting obliterated.” The firm drew a parallel to the speculative years before the Great Depression, pointing to persistent inflation, federal deficits, and debt-financed bets on AI infrastructure.
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Elliott’s argument is that a reversal in just one or two of the forces driving the rally could set off a wider sell-off. If investors lose confidence in the returns on new data centers, lenders may demand more to finance them. That can make it harder for developers to keep spending and leave their suppliers facing slower growth than shareholders had counted on. There were signs of strain before October ended. Jeffrey Gundlach had already flagged widening spreads on riskier AI debt.
