Extraordianry Pop Delusion and M

Be carefull with what edition you get of this great book. Because this book you just have to have. Notice that the Harriman House edition is missing ALOT of pages.

This is it. If you want to know how many times the world has been gripped by madness then look no farther than the reprinted edition of MacKay's classic. Written in that wonderful Olde English style of the early 19th century, MacKay takes us on a tour of the world's most horrifying manias - up to about 1840 anyway. I particularly liked the chapter on witchcraft and witch hunts since it told me everything I'll ever need to know on why seemingly intelligent groups of people band together to banish or murder innocent members of society - just because they are different. Another engaging chapter deals with millennialism - the fear and dread that grips society at the end of each millennium. If you thought the end of the last one brought turbulence, you should read what happened a thousand years ago. This book is often quoted by stock market pundits and talking heads as if it were a treatise on irrational behaviour in the financial markets. It isn't. It deals with irrational behaviour and mass stupidity in all walks of life. Five Stars.

The stories in this book will have appeal as long as human beings exhibit great greed and fear in their investing. Those traits will encourage people to manipulate those emotions to their advantage, and these tales will recur with new investments every few years or so. Some few winners will garner long-term wealth while most will lose their seats in this game of financial musical chairs . . . known as speculating in endless opportunity. Fast success draws attention, which draws new investors, which creates more fast success. The price takes off like a rocket ship to eventually crash to earth when it runs out of the fuel of optimism and greed. No one can hope to be a successful investor without absorbing the stories of these timeless follies. You will find in this book three sections from Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay in 1841, and Confusion de Confusion by Joseph de la Vega from 1680. The Mackay material describes the almost simultaneous Mississippi Scheme in France and the South Sea Bubble in England, as well as the earlier speculation in tulips in the Netherlands. Confusion de Confusion is a translation from the Spanish about speculation in Amersterdam in the securities of the Dutch East and West India Companies. The Mississippi scheme involved the use of private bank notes to improve the French debt and currency that were eventually tied into investments in a colony in Mississippi. John Law, a Scotsman, was the originator of the scheme, which grew out of control when the French printed too much money and the Mississippi colony foundered. You can read more about this in the recent book, The Millionaire. The basic facts are more easily absorbed, however, in this volume. Following along shortly thereafter, the English began to speculate in stock in a monopoly to develop trade with the Spanish, also tied to reducing public debt. That became the South Sea bubble and the speculation was encouraged by the early success of stock investors in the Mississippi scheme in France. Tulipomania is considered the best of the financial parts of this book, and recounts the amazing heights that a single tulip bulb could bring (with a famous table of the buying power of a florin at thta time) and the problems encountered, such as when a sailor mistook a rare bulb for an onion and had it for his lunch! These three essays are about psychology, and do not go into the market details too much. The descriptions about how the government dealt with these disasters provide relevant information for regulators.In Confusion de Confusion, there are four dialogues about how bull and bear markets can be manipulated and the consequences, in the context of speculation in hopes of gain for the new colonies and trade. These dialogues are superb examinations of how markets actually work, and will be an illumination to the new investor of who she or he may be up against. The lesson: Be sure you know the rules and think abo

The author tracks historical mass-mistakes with such clarity that it is easy to see the parallels with the world of today.As has been noted in other reviews, the current stock market overinflation and collectibles craze are clearly paralleled by previous events. A parallel which I haven't seen in other reviews here is the current 'alien invasion/x-files' obsession with the long running belief in alchemy. The same figures play roles.. the naive believer and the swindling fraud, most prominently.Our current astrology revival is only the latest wave of belief in this ancient 'art' and homeopathy has much in common with 'animal magnetism.'I think that every young person, every person should read it to gain an appreciation of the tools we have to sort out the sense from the nonsense as well as a historical perspective on how much human nature has not changed in its eagerness to believe in the face of reason.