How Vulnerable Are You To Mass Hysteria?

How Vulnerable Are You to Mass Hysteria?

We often think of ourselves as being too logical of level-headed to be turned around by some
bizarre social reality. We never bought a hoola hoop. We know Elvis is truly dead.

We all are vulnerable to some extent and we all have our Achilles’ heels. If you understand how
these phenomena of heard psychology work, you’ll be better prepared to deal with them.

And, as an options trader, you must be able to see reality for what it is in order to profitably trade
reality. Let’s start with a few examples to illustrate the point.

In London in 1524, the city awaited its doom. Numerous astrologers and fortune tellers had
foretold a massive flood. The great Thames, one of the world’s best behaved rivers, was to jump its bank
and engulf the entire city on February 1. Doom and gloom was predicted by just about anybody anyone
would listen to. Over 20,000 citizens, nearly the entire population, moved to higher ground.

On February 1st nothing happened. But the charlatans had an answer. A minor miscalculation
had occurred. The flood was coming in 1624. Londoners were safe at least for awhile. sound like any
economic forecasters you know?

If you think these things only happened in the middle ages and that only the “poor dumb masses”
are caught up, think again. The “red bating” frenzy of McCarthyism even caught up the ACLU. That is a
group who considers themselves above emotionalism. The fact is they too were swept ...

How Vulnerable Are You To Mass Hysteria?

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