Deep Insights And Psychology of the Crowds

Deep Insights And Psychology of the Crowds

Deep Insights Into The Inner Mechanisms of the Mind 101

In order to understand how the masses operates one needs to first and foremost understand how one (you) operate. Hopefully, by this stage, you have some understanding of what drives you, how you react in a crowded place and how you react when the markets experience a strong pullback.  If you have not kept a trading journal, go to a quiet place and try to recall how you reacted each time the markets experienced a strong pullback and put these notes on paper. One should also perform the same exercise to see how one reacted when the crowd was in a state of ecstasy.

While one might be surprised at the list of books provided here, or the order in which they are listed, one should understand that we have spent close to 25 years on this topic and there are hidden messages in all the books listed. Read them slowly and try to grasp the main point. The objective is not to finish the book as fast as you can but to get the gist of the data and then try to apply this information in real-time.

 

Aesops Fables21348

Aesop’s Fables or Aesopica refers to a collection of fables credited to Aesop (620-560 BC), a slave and story-teller 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.

The task that set the children apart from the Jays involved a mechanism which was counter-intuitive as it was hidden under an opaque surface. Neither the birds nor the children were able to learn how the mechanism worked, but the children were able to learn how to get the reward, whereas the birds were not.

The results of the study illustrate that children learn about cause and effect in the physical world in a different way to birds. While the Jays appear to take account of the mechanism involved in the task, the children are more driven by simple 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 apparently impossible. Essentially, they were able to ignore the fact that it shouldn’t be happening to 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 consisted of using a tube of water containing an out-of-reach prize. The subjects were required to use objects to displace the water so that the prize could be reached. Continue reading

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Aesops Fables

Lord of the fliesDeep Insights And Psychology

At the dawn of the next world war, a plane crashes on an uncharted island, stranding a group of schoolboys. At first, with no adult supervision, their freedom is something to celebrate; this far from civilization the boys can do anything they want. Anything. They attempt to forge their own society, failing, however, in the face of terror, sin and evil.

And as order collapses, as strange howls echo in the night, as terror begins its reign, the hope of adventure seems as far from reality as the hope of being rescued. Labelled a parable, an allegory, a myth, a morality tale, a parody, a political treatise, even a vision of the apocalypse, Lord of the Flies is perhaps our most memorable novel about “the end of innocence, the darkness of man’s heart.” goodreads

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The Crowd: A Study of the Popular Mind by Gustave Le BonDeep Insights into the crowd

One of the most influential works of social psychology in history, The Crowd was highly instrumental in creating this field of study by analyzing, in detail, mass behavior. 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. In the author’s words, “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 the generally accepted beliefs of a nation’s citizenry on the processes of history.

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 students of history, sociology, law, and psychology, The Crowd will also be invaluable to politicians, statesmen, investors, and marketing managers. “Any study of crowd behavior, popular psychology, fascism, etc. would do well to begin with Le Bon’s work.” — Anson Rabinbach, Professor of History, Princeton University.
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Instincts of the Herd in Peace and War by W. Trotter19434589

This work has been selected by scholars as being culturally important and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact and remains as true to the original work as possible. Therefore, you will see the original copyright references, library stamps (as most of these works have been housed in our most important libraries around the world), and other notations in the work.

This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work.

As a reproduction of a historical artifact, this work may contain missing or blurred pages, poor pictures, errant marks, etc. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process and thank you for being an important part of keeping this knowledge alive and relevant. Good reads

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Essays of Michel de Montaigne 44280083. sx318

The Essays of Michel de Montaigne are contained in three books and 107 chapters of varying length. They were originally written in Middle French and were originally published in the Kingdom of France. Montaigne’s stated design in writing, publishing and revising the Essays over the period from approximately 1570 to 1592 was to record “some traits of my character and of my humours.” The Essays were first published in 1580 and cover a wide range of topics.


Montaigne wrote in a rather crafted rhetoric designed to intrigue and involve the reader, sometimes appearing to move in a stream-of-thought from topic to topic and at other times employing a structured style that gives more emphasis to the didactic nature of his work.

His arguments are often supported with quotations from Ancient Greek, Latin, and Italian texts such as De rerum natura by Lucretius and the works of Plutarch. Furthermore, his Essays were seen as an important contribution to both writing form and skepticism. The name itself comes from the French word essais, meaning “attempts” or “tests”, which shows how this new form of writing did not aim to educate or prove. Rather, his essays were exploratory journeys in which he works through logical steps to bring skepticism to what is being discussed. Goodreads

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Manufacturing Consent  12617. sy475

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 defense 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 behavior and performance. Their new introduction updates the Propaganda Model and the earlier case studies, and it discusses several other applications.

These include the manner in which 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 powerful 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

Secondary link With Additional notes

Popular Delusions and the Madness of Crowds by Mackay

13498140

First published in 1841, Extraordinary Popular Delusions and the Madness of Crowds is often cited as the best book ever written 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, and, furthermore, that 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 great financial manias, Charles Mackay proved himself a master chronicler of social as well as financial 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 surely will, you are advised to recall the plight of some of the unfortunates 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 100779

First published in 1923, “Reminiscences of a Stock Operator” is the most widely read, highly recommended investment book ever. Generations of readers have found that it has more to teach them about markets and people than years of experience. This is a timeless tale that will enrich your life–and your portfolio.

“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 favorites.”
Kenneth L. FisherForbes

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

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Suggested Videos

One can watch these videos in addition to reading the above books. In general, one will gain more if one does both.

Plato’s allegory of the cave

 

Manufacturing consent: Noam Chomsky

 

Lord of the flies

 

The nature of the crowd Gustave le Bon

 

Century of enslavement

Shaping public opinion

Mass Hysteria throughout history

 

 

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

 

 

How the News lies

 

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