Crowds

Edson Gould, one of history’s greatest market forecasters:

Crowds do not think. They do not reason. They simply react, animalistically and emotionally.

As a near-perfect example of what I mean, and something to which almost anyone can relate, the following example is cited: You’re alone in an empty movie theater and hear the cry of “fire.” You look around, see no flames, smell no smoke. You calmly walk to the nearest exit.

Repeat the same cry of “fire” (again without flames visible or the smell of smoke) in a crowded theater and once the crowd starts running for an exit, you’ll find yourself running too.

That’s crowd psychology.

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Source:

My Greatest Discovery by Edson Gould