Forget FOMO: Hedge fund tycoon warns of FOGO - fear of getting obliterated - as worries over stock market crash mount

Updated: 09:29 EDT, 3 November 2026 One of the world’s top hedge funds has warned that a stock market slump could see ‘fear of missing out’ (FOMO) replaced by FOGO – ‘fear of getting obliterated’.In a chilling letter to investors, Elliott Investment Management bosses compared the current state of the markets to the Roaring ‘20s that preceded the Wall Street Crash and the Great Depression.The £60billion New York firm, led by feared financier Paul Singer, highlighted risks associated with the hype around artificial intelligence (AI) as well as the US budget deficit, persistent inflation and private credit.‘At present, virtually every alarm bell warning of a substantial bear market ahead is ringing,’ the letter said.A bear market is when the stock market drops by 20 per cent or more – slashing the value of pensions, ISAs and other investments for millions of savers. A trader on the floor of the New York Stock ExchangeThe tech-heavy Nasdaq in New York – whose constituents include US giants Nvidia, Apple, Google owner Alphabet and Facebook parent Meta – is down 10 per cent since reaching an all-time high in early October.While not yet in a bear market, the 10 per cent fall puts it in ‘correction’ territory and has wiped nearly £3trillion off its value.Other benchmarks have fared better – with the FTSE 100 just 2 per cent below its peak.But Elliott warned the mood could quickly sour following the AI exuberance that drove stock markets to record highs - in part on a wave of so-called FOMO as investors desperate not to miss out piled in.‘So many factors have lined up to cause this great boom that it might take disruption in only one or two of them to shift this momentum into reverse, leading to a cascading, self-reinforcing unwind of this bull market and an abrupt change from FOMO to FOGO – fear of getting obliterated,’ the letter from Elliott said, according to the Wall Street Journal.Elliott said it stands ready to strike if market turmoil presents opportunities.‘Over Elliott’s five-decade existence, fallow periods have existed, but these have historically been accompanied by market turbulence and followed by periods of rare opportunities,’ it said.‘Our goal is to be well positioned – protected on the downside, and with capital to deploy into the bargains – when the tide turns again.’ Hedge fund tycoon Paul Singer, the founder of Elliott Investment ManagementA multitrillion-dollar spending splurge on AI propelled stock markets to record highs this year and raised expectations of robust economic growth.But investors are getting nervous. US President Donald Trump's erratic trade policies and the Iran war's energy price shock have revived inflation worldwide, putting pressure on central banks to raise interest rates.That, along with concerns about the AI spending splurge and soaring levels of government debt, is driving up borrowing costs to multidecade highs.With US midterm elections, volatile geopolitics and rising interest rates promising further uncertainty in the final stretch of the year, some investors and economists say risks to the global economy are mounting.‘Rising rates always seem to sniff out and expose the most vulnerable time after time,’ said Jim O'Neill, former Goldman Sachs chief economist and former UK Treasury minister. ‘Countries and businesses too exposed suffer the most.’He said if inflation did not ease, the risks stemming from the vast amount of debt-financed investment flowing into the AI sector would grow.‘In some ways, it's surprising to me there haven't been more bumps in the AI trade already,’ O'Neill said.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you