# 7 19th September 2000 The madness of crowds

CONTRARY VIEW

Published by Kauders Portfolio Management, Authorised and regulated by the Financial Services Authority

No. 7 19th September 2000 The madness of crowds

More motor fuel madness in today's mania. What's different to the madness that makes people believe that share prices always go up?

We live in unstable times. Hype and emotion have more appeal than rational assessment of facts. Charles Mackay wrote, in the preface to the 1852 edition of "Extraordinary Popular Delusions and the Madness of Crowds":-

Men ... think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one"

Now, which financial institution was recommending a high return bond two years ago, that actually produced only £7 per £10,000? How many people believed that house prices always went up? Hands up those who put their money into technology at the start of this year?

Don't be part of the mass delusion of markets. Think for yourself.

PS You can obtain a version of Charles Mackay'swork "Memoirs of Extraordinary Popular Delusions" free from Project Gutenberg, http://promo.net/pg/ and while you are there, also look at "The Crowd" by Gustav Le Bon.

You are welcome to quote or re-use this material, provided you acknowledge the source "www.contraryview.co.uk, published by Kauders Portfolio Management".

Return to home page of contrary view or return to complete index

For information about our advice and services visit our main site or click for contact details

WARNING: The firm can only be responsible for action taken on our advice given personally and specifically to be suitable for each individual. Statements on this site do not, on their own, constitute advice. Please note that UK regulatory requirements prevent us commenting on your existing investments or giving specific advice, unless you first sign one of our portfolio service agreements.

This advertisement has been approved by Kauders Portfolio Management, who are authorised and regulated by the Financial Services Authority in the conduct of investment business in the UK. Opinions and statistics are valid at time of publication but may differ later. We leave them on the site so that you can see how useful our point of view has been.