However, ordinary investors don’t face such pressures, so why are we so easily swayed by the madness of crowds? Firstly, it feels good to conform. The same point is made by GMO strategist and author James Montier in The Little Book of Behavioral Investing. Conformity feels good; going your own way breeds anxiety and discomfort, as Shiller will testify. And if Shiller – a celebrated Nobel economist lauded for his insights into financial bubbles and mob behaviour – feels uncomfortable fighting the investment crowd, you and I are unlikely to be any different.

Source: The Irish Times March 27, 2018 06:00 UTC