Was Q1 only the start of herd mentality in the market?
By Julian Koski, CIO at New Age Alpha
In his 2004 bestseller The Wisdom of Crowds, James Surowiecki famously provides evidence that when acting independently and in their own self-interest, the actions of individual members of a crowd result in an efficient outcome. Following this logic, if investors act independently in their pursuit of excess returns, the market will be efficient. Of course, the title of Surowiecki’s book is a nod to the classic tome by Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (emphasis mine). What happens when the individuals in a crowd behave systematically similarly, not independently?
April 19, 2021
THE WASHINGTON POST – By eerie coincidence, I began reading William J Bernstein’s
The Delusions of Crowds: Why People Go Mad in Groups in early January and was deep into it on January 6. I kept reading in the days that followed the unprecedented insurrection at the Capitol, putting the book aside occasionally to look at the scores of videos taken by participants before and during the rioting. ProPublica, the investigative news site, acquired more than 500 of these videos and assembled them into a compelling new kind
of documentary.
The people in these clips fit with what Bernstein describes as victims of delusions. In this instance they were victims of our deluder in chief, who concocted false tales of election fraud that he repeated again and again to convince his followers that Joe Biden had stolen the 2020 election. At a rally on January 6, President Donald Trump urged the crowd to march on the Capitol, “show strength” and “stop the steal”. At his b
Of crowds and irrational behaviour
April 18, 2021
Title: The Delusions of Crowds: Why people go mad in groups Author: William J Bernstein Publisher: Black Cat Price: ₹2,526
Title: The Delusions of Crowds: Why people go mad in groups Author: William J Bernstein Publisher: Black Cat Price: ₹2,526×
The book unravels how people rationalise facts to fit them into their perceptions
Neuroscientists have uncovered the physiological basis for two of the most fundamental responses driving human behaviour, especially when it comes to behavioural economics: greed and fear. These are the two impulses which drive money and the markets, and even religion.
According to science, the limbic system which divides the brain into the right and left hemispheres gets fired by outside stimuli that get transferred through the temples on the forehead and behind the eyes.
For most of the ninety years since James Truslow Adams coined the term American Dream, most Americans still believed the fairy tale of the American Dream, that no matter how humble your beginnings, everyone had a fair chance to become a success in America, based upon your individual talent, intelligence, work ethic and a society that rewarded those who exceled. Sadly, that dream is no longer achievable for most Americans. Our society has devolved into an oligarchy since The Epic of America was published in 1931, where a powerful few rule over a willfully ignorant many through propaganda, mistruth, fear, and an iron fist.
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