The Illusion of the Crowd: Exposing the Reasons Why People Get Deeper and Deeper in Their Speculative Dreams

Why do we always blindly follow the spotlight and dream of getting rich overnight?

The dot-com bubble, the Enron scandal, the subprime mortgage bubble...

Why do we always see problems with these investment booms that everyone is following after the bubble bursts?

Analyze the roots of collective fanaticism that will never be eradicated in human history!

If you have read Charles. McKay's masterpiece "Abnormal Popular Illusions and Mass Madness",

Then you can’t miss William. Bernstein's latest masterpiece─"The Illusion of the Crowd".

◎What is the illusion of the masses?

In 1842, Scottish writer Charles. McKay wrote a stunning masterpiece, "Abnormal Popular Illusions and Crowd Madness",

The book extensively explores themes such as financial bubbles, religious fanaticism, collective madness, and delusions about the future.

It can be called a classic work describing the crazy phenomenon of human social groups.

However, this famous book is only a collection of many collective fanatical fantasies throughout history.

In order to warn the world, it failed to explain the root cause of this phenomenon.

On this basis, Bernstein, the author of "The Law of Investment", combined his professional knowledge of neuromedicine and financial history,

The similarities are further analyzed for readers.

Bernstein noted that two phenomena, financial bubbles and religious fanaticism,

At first glance, they may seem unrelated, but in fact they have the same pursuit behind them:

"Improving welfare in this life or the next life" (Getting rich overnight and religious eschatology in the financial world).

Therefore, in this book, he attempts to explore these two phenomena (getting rich overnight and eschatology) and find answers to the following questions:

Why do people collectively fall into hallucinations and believe in something fanatically, even if numerous evidence tells them "it's not true"?

◎Why is the illusion of getting rich overnight so fatally attractive?

You might say, isn’t this nonsense? Everyone wants to get rich!

Yes, we all hope to get rich overnight, so we buy lottery tickets and imagine that we will be the next jackpot winner.

However, the lottery ticket is only a small amount of money. At most, it will cost you food money. If you are lucky, you can win a small prize.

Compared with lottery tickets, more people are trapped in various investment dreams.

For example, when the stock market is at a high point, many people believe that it will continue to rise and are reluctant to let go.

Everyone must be familiar with the story of losing money when the stock price bubble dissipated.

There are many such cases in history.

And from the perspective of hindsight, many people are chasing investment targets that can be seen before the bubble burst.

However, even if warnings were given beforehand, investors would simply ignore them, or even ridicule and scold them.

◎No matter how smart a person is, he will be addicted to false dreams and be unable to extricate himself...

We all think of ourselves as smart and judgmental;

However, even the smartest people may fall into the above-mentioned investment dream trap.

As a professional investor and neurologist, Bernstein discovered that this condition has nothing to do with a person's intelligence.

Even Newton, who had a high status in the scientific community, once suffered heavy losses due to this phenomenon. He even lamented:

"I can calculate the movement of celestial bodies, but I cannot calculate the madness of people."

In addition to the investment dream trap, there is another trap that is difficult for outsiders to understand.

But it is difficult for people who are in it to wake up to the excessive fanaticism about religion.

The scary thing is that many evil religions use the name of faith to defraud various resources.

But he can always deceive many believers into willingly devoting their personal belongings and even their lives.

◎Actually, it’s all the fault of human weakness...

Bernstein discovered that whether it is an investment dream or a fanatical belief,

The reason why these two can attract so many people lies in the weakness of human nature.

In fact, humans are instinctively inclined to pursue rewards that are of high value but are scarce.

What drives us behind is our instincts of greed and fear.

We pursue happiness and a better life, and are afraid of all the pain and unhappiness in life.

In order to obtain happiness and escape pain, we will unconsciously look for the simplest and easiest way.

And this is the vulnerability most easily targeted by those who intentionally deceive us.