Markets, Mobs and Mayhem:How to Profit From the Madness of Crowds

A few years ago, the NASDAQ was flying high and dot-com millionaires were a dime a dozen. The American economy seemed to be riding an endless wave of soaring stock prices. The experts on the cable news TV shows gushed that nothing like the tech boom had ever happened before and there was no reason to think it would ever end. In fact, the tech boom and bust was only the latest version of an important phenomenon that affects every executive and investor: group hysteria. From the tulip mania in 17th century Holland to the anthrax scare in the 21st century United States, group thinking has overwhelmed common sense time after time. Now, in Markets, Mobs and Mayhem, Robert Menschel explains why it is dangerous to follow the crowd. Menschel is Senior Director of the Goldman Sachs Group and founder of its institutional investment department. By resisting popular enthusiasms, his value-oriented investment approach has resulted in a 20 percent-plus annual average return over more than four decades. In this summary, you‘ll learn how you can stay calm in the midst of panic, so you can avoid getting swept up in group hysteria and make independent decisions that lead to consistent profits.