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

Customer Reviews

The author expends virtually all of his efforts discussing mob behavior, but rarely in the context of investments and market madness, i.e., most of the examples he uses relate to Ku Klux Klan activities, the French citizens' attack on the Bastille, the Watts riots and other such emotional mob activities. While these are often interesting and sometimes horrifying, they have only tangential bearing on market manias and investment fads. Furthermore, most of the text has been copied and pasted from reports on these activities that were written by others.

As an investment professional (and having invested in the market myself for over 35 years), I have long believed that, at least in the short term, market prices are dictated as much by psychology as by fundamentals such as profit growth, investment return expectations, balance sheets, business strategies, profit margins, competiting products and services, interest rates and such. And I thought the book would provide at least a few insights into investor psychology and how it moves markets; certainly a thorough discussion of the Dotcom and tech manias of recent years would have been a very apt topic for discussion.

Alas! There was no discussion at all about these issues of investment psychology; rather, the author was content to provide example after example of how, many times in the past, mobs are capable of taking on a life of their own and engaging in group-think, abandoning analysis and rational decision-making. Well, I guess we already know that. We are left on our own to try to figure out how "collective mob behavior" infects investors' psyches and affects the movement of stock prices.

Readers who would like a lot more insight into that process should buy "Devil Take the Hindmost," and not waste their time or money on this book.

Ralph

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