November 13, 2017

The speculative public is incorrigible

Ben Graham wrote in The Intelligent Investor:

The speculative public is incorrigible.

In financial terms, it cannot count beyond three. It will buy anything, at any price, if there seems to be some ‘action’ in progress.

It will fall for any company identified with franchising, computers, electronics, science, technology, or what have you, when the particular fashion is raging.

Cut back to today:

..people don’t care. And millions of those who have lost money in real estate and gold or do not find fixed income securities as attractive anymore are moving into equities in droves.

And they are making money. And feeling good. Like those addicts. Such conditions — an equity bull market-induced wealth effects releasing oodles of dopamine in the collective brains of investment community — are sufficient to make people gullible, suggestible and vulnerable to exploitation by crooks camouflaging themselves as saints.

A respected short seller and student of financial market cycles agree. He says: What we find is that the greatest clustering of fraud in the financial markets occurs during ...

Read more at https://economictimes.indiatimes.com/markets/stocks/news/camouflage-and-dope-in-a-bull-market/articleshow/61625978.cms

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