Deep Insights And Psychology of the Crowds

Deep Insights And Psychology of the Crowds

Deep Insights Into The Inner Mechanisms of the Mind 101

Updated March 2024

To apprehend the ways of the masses, one must primarily apprehend one’s ways. Mayhap by this juncture, thou hast garnered some comprehension of what impels thee, how thou dost react amidst a crowd, and how thou dost react when the markets experience a strenuous downturn. If thou hast not recorded thy trades in a journal, find a peaceful place, recollect how thou hast responded every time the markets endured a robust downturn, and pen these thoughts on parchment. Likewise, one must carry out the same undertaking to examine how one hast reacted whilst the crowd was in bliss.

Though one may find oneself taken aback by the compendium of volumes presented herein or the sequence in which they are given, one should be cognizant that we have dedicated almost a quarter of a century to this field of inquiry. There are hidden meanings within all the tomes mentioned. Read them leisurely and endeavour to seize the crux of the matter. The purpose is not to hasten through the book but to apprehend the information and then endeavour to apply it in actuality.


Aesops Fables

Aesop’s Fables or Aesopica refers to a collection of fables credited to Aesop (620-560 BC), a slave and storyteller who lived in Ancient Greece. Aesop’s Fables have become a blanket term for collections of brief fables, usually involving anthropomorphic animals.

Many stories included in Aesop’s Fables, such as The Fox and the Grapes (from which the idiom “sour grapes” was derived), The Tortoise and the Hare, The North Wind and the Sun and The Boy Who Cried Wolf, are well-known throughout the world. Goodreads

Lucy Cheke, a PhD student at the University of Cambridge’s Department of Experimental Psychology, expanded Aesop’s fable into three tasks of varying complexity and compared the performance of Eurasian Jays with local school children.

Children Grasp New Concepts Rapidly

The task that set the children apart from the Jays involved a counterintuitive mechanism hidden under an opaque surface. Neither the birds nor the children could learn how the mechanism worked, but the children could learn how to get the reward, whereas the birds could not.

The study results illustrate that children learn about cause and effect in the physical world differently from birds. While the Jays appear to consider the mechanism involved in the task, the children are more driven by superficial cause-effect relationships.

Lucy Cheke said, ”This makes sense because it is children’s job to learn about new cause-and-effect relationships without being limited by ideas of what is or is not possible. The children were able to learn what to do to get the reward, even if the chain of events was impossible. Essentially, they could ignore the fact that it shouldn’t be happening and concentrate on the fact that it was happening.  The birds, however, found it much harder to learn what was happening because they were put off by the fact that it shouldn’t be happening.”

The tasks were a variation of Aesop’s fable that used a water tube containing an out-of-reach prize. The subjects were required to manipulate objects to displace the water to reach the award. Continue reading

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Aesops Fables

Lord of the Flies

Considered one of the most influential works in social psychology, The Crowd is an in-depth analysis of mass behaviour. This book was instrumental in creating the field of social psychology, influencing scholars like Freud, Hitler, and Mussolini, who may have used its observations as a guide to stirring up popular passions. The author suggests that the masses have never sought truth but instead seek illusions, which can easily make them subservient to their masters, and anyone who tries to destroy these illusions will become their victim.

While focusing on crowd psychology, the book also instructs on the effects of generally accepted beliefs of a nation’s citizenry on the processes of history. The volume covers the crowd’s general characteristics and mental unity, their sentiments and morality, ideas, reasoning power, imagination, opinions, and beliefs. It also discusses the means used by leaders to persuade the crowd and classification of crowds, including criminal and electrical assemblages, criminal juries, and parliamentary assemblies. goodreads

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The Crowd: A Study of the Popular Mind by Gustave Le Bon

One of the most influential works of social psychology in history, The Crowd, was instrumental in creating this field of study by analyzing mass behaviour in detail. The book had a profound impact not only on Freud but also on such twentieth-century masters of crowd control as Hitler and Mussolini—both of whom may have used its observations as a guide to stirring up popular passions. The author says, “The masses have never thirsted after the truth.

Whoever can supply them with illusions is easily their master; whoever attempts to destroy their illusions is always their victim.”
Although the volume focuses on crowd psychology, it is also brilliantly instructive on the effects of a nation’s citizenry’s generally accepted beliefs on historical processes.

Among the topics covered here are general characteristics and mental unity of the crowd; the crowd’s sentiments and morality; its ideas, reasoning power, and imagination; opinions and beliefs of crowds and the means used by leaders to persuade; classification of crowds, including criminal and electrical assemblages, as well as the functioning of criminal juries and parliamentary assemblies.

A must-read volume for history, sociology, law, and psychology students, The Crowd will also be invaluable to politicians, statesmen, investors, and marketing managers. “Any study of crowd behaviour, popular psychology, fascism, etc. would do well, to begin with Le Bon’s work.” — Anson Rabinbach, Professor of History, Princeton University. goodreads

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Instincts of the Herd in Peace and War by W. Trotter

This culturally important work has been carefully reproduced from the original artefact, striving to maintain its authenticity as much as possible. The work contains original copyright references, library stamps, and other notations. As a historical artefact, it may have missing or blurred pages, poor pictures, or errant marks.

This work is in the public domain in the United States of America and possibly other countries, allowing free copying and distribution without restriction. Scholars believe it is significant enough to be preserved, reproduced, and made available to the public despite its imperfections.

We are dedicated to preserving this knowledge and are grateful for your support in this ongoing effort. Thank you for being a crucial part of this process and helping to keep this valuable information alive and relevant. Good reads

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Essays of Michel de Montaigne

Michel de Montaigne wrote a collection of essays in Middle French, initially published in France between 1570 and 1592. The essays aim to record Montaigne’s character and humour and cover a wide range of topics. His writing style varies from a stream-of-thought approach to a more structured, didactic approach. Montaigne often supports his arguments with quotations from ancient Greek, Latin, and Italian texts, including works by Lucretius and Plutarch.

His essays were a notable contribution to writing form and scepticism. Montaigne’s exploratory journeys sought to bring a sceptical approach to the subjects he discussed. The word “essais” in the title means “attempts” or “tests,” reflecting the exploratory nature of his work.  Goodreads

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Manufacturing Consent

In this pathbreaking work, Edward S. Herman and Noam Chomsky show that contrary to the usual image of the news media as cantankerous, obstinate, and ubiquitous in their search for truth and defence of justice, in their actual practice, they defend the economic, social, and political agendas of the privileged groups that dominate domestic society, the state, and the global order.

Based on a series of case studies—including the media’s dichotomous treatment of “worthy” versus “unworthy” victims, “legitimizing” and “meaningless” Third World elections, and devastating critiques of media coverage of the U.S. wars against Indochina—Herman and Chomsky draw on decades of criticism and research to propose a Propaganda Model to explain the media’s behaviour and performance. Their new introduction updates the Propaganda Model and the earlier case studies and discusses several other applications.

These include how the media covered the passage of the North American Free Trade Agreement and subsequent Mexican financial meltdown of 1994-1995, the media’s handling of the protests against the World Trade Organization, World Bank, and International Monetary Fund in 1999 and 2000, and the media’s treatment of the chemical industry and its regulation. What emerges from this work is a robust assessment of how propagandistic the U.S. mass media are, how they systematically fail to live up to their self-image as providers of the kind of information that people need to make sense of the world, and how we can understand their function in a radically new way. Goodreads

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Extra notes on the above topic by Noam Chomsky and Edward S Herman

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Popular Delusions and the Madness of Crowds by Mackay

First published in 1841, Extraordinary Popular Delusions and the Madness of Crowds is often cited as the best book ever about market psychology. This Harriman House edition includes Charles Mackay’s account of the three infamous financial manias – John Law’s Mississipi Scheme, the South Sea Bubble, and Tulipomania.

Between the three of them, these historic episodes confirm that greed and fear have always been the driving forces of financial markets. Being sensible and clever is no defence against the mesmeric allure of a popular craze with the wind behind it.

In writing the history of the tremendous financial manias, Charles Mackay proved himself a master chronicler of social as well as economic history.

Blessed with a cast of characters that covered all the vices, gifted a passage of events which was inevitably heading for disaster, and with the benefit of hindsight, he produced a record that is at once a riveting thriller and absorbing historical document. A century and a half later, it is as vibrant and lurid as the day it was written.

For modern-day investors, still reeling from the dotcom crash, the moral of the popular manias scarcely needs spelling out. When the next stock market bubble comes along, as it will, you are advised to recall the plight of some of the unfortunate on these pages and avoid getting dragged under the wheels of the careering bandwagon yourself. Goodreads

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Reminiscences of a Stock Operator

First published in 1923, “Reminiscences of a Stock Operator” is widely regarded as the most influential and timeless investment book ever written. The book is a fictionalized account of the life of Jesse Livermore, one of the greatest stock traders of all time, and is narrated in the first person by the character Larry Livingston.

The book offers invaluable insights into trading and investing psychology, emphasizing the importance of understanding market behaviour and human emotions. Livermore’s experiences, as recounted in the book, highlight the timeless nature of market cycles and the need for discipline, patience, and risk management in trading.

Legendary investor Paul Tudor Jones, who wrote the foreword for the annotated edition published in 2009, describes the book as “a textbook for trading stocks” and “a manual for trading life.” Jones credits the book with shaping his trading philosophy and considers it essential reading for anyone serious about markets.

Another renowned investor, William O’Neil, founder of Investor’s Business Daily, calls “Reminiscences” a “must-read classic for all investors, whether brand-new or experienced.” O’Neil highlights the book’s enduring relevance, noting that generations of readers have found it has more to teach them about markets and people than years of experience.

The book is divided into three parts, chronicling Livermore’s early successes in bucket shops, his experiences as a professional trader on Wall Street, and his reflections on the art of speculation. Throughout the book, Livermore shares his hard-won lessons on the importance of cutting losses quickly, riding winners, and avoiding the pitfalls of overconfidence and greed.

Some of the most famous quotes from the book include:

– “There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”
– “The game of speculation is the most uniformly fascinating in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.”
– “The fact that I remember that way is my way of capitalizing on experience.”

In conclusion, “Reminiscences of a Stock Operator” remains the most widely read and recommended investment book. It offers timeless wisdom on the art and psychology of trading. Its insights resonate with and inspire generations of investors, from novices to market legends like Paul Tudor Jones and William O’Neil.

“Although Reminiscences…was first published some seventy years ago, its take on crowd psychology and market timing is as timely as last summer’s frenzy on the foreign exchange markets.”
Worth magazine

“The most entertaining book written on investing is Reminiscences of a Stock Operator, by Edwin Lefèvre, first published in 1923.”
The Seattle Times

“After twenty years and many re-reads, Reminiscences is still one of my all-time favourites.”
Kenneth L. FisherForbes

“A must-read classic for all investors, whether brand-new or experienced.”
William O’Neil, founder and Chairman, of Investor’s Business Dail

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Suggested Videos

In addition to reading the recommended books, watching these videos can further enhance your understanding of how the world is not always what it seems:

1. **Plato’s Allegory of the Cave**: This famous allegory, described in Plato’s Republic, illustrates how our perception of reality can be limited and distorted, much like prisoners in a cave who mistake shadows on a wall for reality. The allegory is a powerful metaphor for the importance of education and critical thinking in breaking free from the “cave” of ignorance and illusion. [[3]]

2. **The Truman Show (1998)**: This thought-provoking film, which draws inspiration from Plato’s Allegory of the Cave, follows the life of Truman Burbank, a man who unknowingly lives in a constructed reality television show. As Truman begins questioning his world, he embarks on a journey of self-discovery and ultimately breaks free from the illusion. The film is a modern-day allegory for the power of media manipulation and the importance of questioning the status quo.

3. **Manufacturing Consent: Noam Chomsky and the Media (1992)**: In this documentary, renowned linguist and philosopher Noam Chomsky argues that the mainstream media is a propaganda tool for the elite, shaping public opinion and limiting the range of acceptable debate. Chomsky’s analysis highlights how the media can distort reality and manipulate the masses, much like the puppet masters in Plato’s cave.

4. **The Century of the Self (2002)**: This BBC documentary series, directed by Adam Curtis, explores how Freudian corporations and governments have used theories of the unconscious to manipulate the masses throughout the 20th century. The series reveals how advertising and public relations’s “hidden persuaders” have shaped our desires and identities, often without our conscious awareness.

Media theorist Marshall McLuhan famously said, “The medium is the message.” These videos and the insights of thinkers like Plato and Chomsky remind us to critically examine the media we consume and the “reality” it presents to us. By stepping out of our own “caves” and questioning the shadows on the wall, we can see the world more clearly and make more informed decisions about our lives and our society.

Plato’s allegory of the cave


Manufacturing consent: Noam Chomsky

The original video has been pulled and made private.  Click on the second link for a similar version.

Lord of the flies


The nature of the crowd Gustave le Bon

A century of enslavement


Shaping public opinion

Mass Hysteria throughout history



The Federal Reserve System – Slavery at its best (1/4)


Essential Hayek: Economic Booms and Busts


The Psychology of Self Deception


This is How Easy It Is to Lie With Statistics

How social media destroys your life