The Psychology of the Herd

Birds of a feather flock together; fish swim in schools; and antelopes run in herds.  "In unity there is strength."  "Everybody thinks this is the right thing to do."  Ah yes, how easy it is to run with the herd!  And how comforting, and warming, something like "bundling" in the old days, when bodies together kept all bodies warm.  Economists do it, too; when coming up with economic predictions they talk among each other, compare notes, they all try to stay within some kind of a general consensus, and more likely than not they wind up way off the mark.  Investors like to "bundle," too; and even worse, so do their advisers and brokers.  There’s comfort in the herd.  And yet, if so many are of the same opinion about the stock market, which is a reflection of mass psychology not a physical system, then that opinion is probably wrong.  It’s hard to be a contrarian – to stick to your guns when everyone around you is ridiculing you.  It’s especially hard to be a contrarian at the top of a strong market surge; but Candle Wave knows that times like that are prone to spark major reversals of trend which "surprise" everyone else.  CandleWave’s free investment newsletter focuses on tops and bottoms in stock market Index price trends, knowing that situations such as that tend to produce the most powerful and profitable reversals, and reports them to its Subscribers three times a week.