Canadian REITS, Trusts & Dividend Stocks Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Seeker of Truth who wrote (7699)	9/29/2004 11:07:46 PM
From: bill	Read Replies (1) of 11633

If you haven't already, read "The Madness of Crowds". It's a classic on group psychology. I first heard the warning about stock market frenzy applied to elevator operators but, of course, they are nearly extinct. The point simply is that when there is a general enthusiasm for investing in an area by people that normally do not invest and are uneducated and uninformed in that area, then have a group madness underway. The buying and selling is no longer based on either knowledge or fundamentals. The greater fool theory is at work. Nortel would be a good recent example. Even the so called experts (brokers) get caught up in the madness because they operate in a closed circle, feeding off each other. The latest diet craze is a good example as well. There is no basis in fact for the supposed benefits but businesses are being driven to bankruptcy by the psychology of the crowd. How to know when the psychological drive has peaked? probably impossible. Only safe bet is to take profits along the way and not try to get out at the top.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next