How and why markets aren't rational. Navigational tips for successfully charting the Bermuda Triangle of human economic behavior. ™

 
Then, one day during my lunch hour I happened to wander into a bookstore. On the shelf I saw, staring at me, a book so extravagantly and flamboyantly titled that I bought it on the spot, even though I did not yet know what it was about. That book was "Extraordinary Popular Delusions and the Madness of Crowds," by Charles MacKay, LL.D.

In some cases, you can judge a book by its cover. This book is great! Originally published in 1841, it concerns the various financial bubbles, crazes, and scandals that have taken hold throughout history, wherein otherwise sensible people fall prey to a financial logic that can best be described as delusional. In this state, they invest their resources in speculative ventures that are highly dubious, even as it becomes apparent that the 'vision' is actually a mirage. Ultimately, the castle in the sky collapses of its own weight.....only to resurface in another form in another place and time. Sound familiar?
permalink: posted by saraw1 at 12/28/2002 10:05:00 AM