Markets, Mobs and Mayhem: A Modern Look at the Madness of Crowds

Markets, Mobs and Mayhem: A Modern Look at the Madness of Crowds

Markets, Mobs and Mayhem: A Modern Look at the Madness of Crowds

Markets, Mobs and Mayhem: A Modern Look at the Madness of Crowds

Synopsis

In this fascinating tour through cultural, global, economic, and business history, icon of the financial world Robert Menschel explores the phenomenon of crowd psychology and its effects on business and culture. Explaining how crowd psychology creates market bubbles and irrational exuberance, Menschel mines world history-from the rise of the Nazis in Germany, to the fanatical love of brands, to the Dutch tulip craze of the seventeenth century, to America's 1990s Internet bubble-to reveal how the behavior of crowds negatively affects the business world. Championing the causes of individuality and common sense, Markets, Mobs & Mayhem offers real wisdom for investors who want to keep their wits when everyone else is losing theirs.

Excerpt

“To Contrarians and Libertarians everywhere,” wrote the Vermont ruminator H.B. Neill in the dedication to his 1954 Art of Contrary Thinking, “May their numbers grow!”

That is the earliest use of the word contrarian that Oxford English Dictionary lexicographers have been able to find. The relatively new locution is rooted in the Latin contra, “opposite,” and nicely defines the little band of prickly iconoclasts who swim against the tide, cut against the grain, and—in the view of the lemminglike crowd of conventional thinkers—make general nuisances of themselves, especially when they turn out to be right or get rich or find happiness.

No, our numbers have not grown in the past half century, nor in the centuries since the Dutch began to tiptoe and then to stampede through their tulip craze. That is as it should be: Different drummers cannot by definition beat their tom-toms in unison, and a “herd of individualists” is a contradiction in terms. Contrarians are a permanent minority, comfortable only in articulate opposition to the placidly received wisdom or panicked self-delusion of the majority.

Orneriness is not godliness. We are aware that the soul who sails through life serene in his solitude may be out of step not just with humanity but with reality. A desire to stand out at any cost—or . . .

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