Extraordinary Popular Delusions And The Madness Of Crowds available online!!
Charles MacKay classic 1841 book, a most exciting read and just to show that we are not oblivious to valuations -ng-
litrix.com
John
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PS some very cool 1929 quotes thrown in for good measure -g-
Financial World (April 10, 1929)
"It may be well again to stress the all-important point that
the Federal Reserve has it in its power to change interest
rates downward any time it sees fit to do so and thus to
stimulate business."
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Financial World (June 26, 1929)
"DEFLATION is a disquieting word and has been bandied
about rather recklessly of late until in the process of
constant reiteration it has assumed the form of a
threatening bogey."
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Outlook & Independent (August 7, 1929)
"IN MANY WAYS this has been the most remarkably
cheerful summer in recent financial history. The stock
market speaks for itself. After the serious decline in May,
prices of the leading securities have been marching
steadily upward... This prosperity might be disquieting if
it were accompanied by any of the symptoms of inflation."
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The New York Times (August 24, 1929)
A Sidelight on Selective Buying
"While a group of stocks has enjoyed a very rapid run-up
since last Spring, more than twice the number have
dropped to new low points and appear to be neglected by
all casual traders in stocks. It has been remarked that it
is harder to get a low-priced stock up a point than it is to
push a market favorite up 30 points."
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The New York Times (Sept. 20, 1929 ? Four weeks before the crash)
Hung on a Hair Trigger
"Possibly one of the most interesting market
developments of the last few months is the moment-to-moment
interest which customers of brokerage houses
are taking in their securities. Time was when the customer
who was carrying a few hundred shares of stock in his
brokerage house was satisfied to glance at his evening
or morning paper to see how his holdings stood. Now, in
the words of one customer's man, the brokers are 'run
ragged' for quotations and reports on last sales of every
stock on the list."
?
'New Names' Most Popular
"Investors and speculators alike appear keen for 'new
names,' and the market appreciation of some of the
favorably situated issues which have been introduced to
traders in the last few days has been tremendous."
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Business Week (October 19, 1929 ? One week before the crash)
Business Outlook
"Now, of course, the crucial weaknesses of such periods-
price inflation, heavy inventories, over-extension of
commercial credit-are totally absent. The security
market seems to be suffering only an attack of stock
indigestion... There is additional reassurance in the fact
that, should business show any further signs of fatigue,
the banking system is in a good position now to administer
any needed credit tonic from its excellent Reserve supply."
--------------------------------------------------------------
The New York Times (Sept. 1, 1929 ? Two days before the final top)
The New Psychology
"One of the most striking features of the present chapter in stock
market history is the failure of the trading community to take
serious alarm at portents which once threw Wall Street into a state
of alarm... Traders who would formerly have taken the precaution of
reducing their commitments just in case a reaction should set in,
now
feel confident that they can ride out any storm which may develop.
But more particularly, the repeated demonstrations which the market
has given of its ability to 'come back' with renewed strength after
a
sharp reaction has engendered a spirit of indifference to all the
old-time warnings. As to whether this attitude may not sometime
itself become a danger-signal, Wall Street is not agreed."
--------------------------------------------------------------
Business Week (Sept. 7, 1929 ? Four days after the final top)
Wall Street's Week
"As the Fall begins there is a tenseness in Wall Street. Its
presence is undeniable. There is a general feeling that
something is going to happen during the present season.
Just what it will be, when it will happen or what will cause
is anybody's guess."
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