Que Sera, Sera
In his remarkable book “Extraordinary Popular Delusions and the Madness of Crowds,” Charles Mackay explored the phenomenon of crowd psychology by examining a number of examples of mass hysteria, including the South Sea Bubble, the Mississippi Scheme, and Tulip Mania speculations. Published in 1841, the book remains a must-read for investors because while the mechanisms and liquidity of investing may have undergone spectacular changes, the people doing the investing haven’t really changed at all. What was once called a delusion is now referred to as a bias, or by less fancy street terms, like FOMO. Mackay knew then what we’d be wise to know now: following the crowd can lead to ruin.
