How Hive Mind Mentality Can Lead to Stock Market Losses

The Connection Between Hive Mind & Stock Market Losses

Updated Feb 2023

One needs to go against their natural instincts to succeed in the market. In other words, it’s essential to stop following the crowd and start thinking outside the box. Mass psychology is a valuable tool for gaining an edge over other market participants, and it’s easy to understand if you’re open to new ideas.

However, many experts (Hive Mind Geniuses), economists, and the general public mistakenly believe investing requires hard work. Patience and discipline are the most critical traits to master in the markets, while hard work ranks at the bottom. To become a successful investor, you must avoid following the herd (stop thinking like a lemming) and take a position against the crowd.

Remember, patience pays off handsomely in investing, while hard work is more suited to manual labour. So, your first move should be to focus on developing your patience and discipline and resist the urge to follow the herd.

Hive Mind: Puts Wealth Before Health

While accumulating wealth is essential, good health is priceless. After all, what good is all the wealth in the world if you don’t have the health to enjoy it? At our firm, we believe that investing should be enjoyable, and that’s where mastering the principles of patience and self-discipline come in.

A patient investor can wait for the right opportunity rather than chase the latest trend like a member of the hive mind. By waiting for a suitable investment, one can avoid buying at the top of the market and instead purchase when prices are lower.

Furthermore, taking a patient approach to investing leaves plenty of time to pursue other interests and enjoy life. But remember, it’s important not to adopt the mindset of the lemmings who believe there is safety in numbers. In the markets, safety lies in taking a contrarian stance and avoiding the hive-mind mentality. Doing so can help ensure that you’ll come out ahead in the long run.

Mass Psychology and Lemmings

In today’s digital age, the average investor has access to vast data that was once exclusive to multimillion-dollar firms. However, with this information readily available to everyone, it no longer provides a competitive advantage. Rather, the truly valuable data is the kind that is difficult to obtain or comprehend and often overlooked.

This is where the fascinating world of mass psychology comes into play, which has proven effective for centuries. The principle of mass psychology suggests that one should sell only when the masses are overly optimistic and buy when they are panicking or uncertain. By understanding the crowd’s behaviour, investors can gain an edge in the market.

Michael Montaigne on the Hive Mind

Let’s examine several excerpts from this great man’s book. He was several 100 years ahead of his time.

In the study of history we must thumb without distinction every sort of author, old or new, French or foreign, in order to get at their great variety of matter, But Caesar, in my opinion, deserves particular study, not only for his knowledge and manner but for himself. Aside from the false colours with which he seeks to paint over his bad cause and the filth of his pestilent ambition, the only fault I can find with him is that he spoke too little of Caesar.

The Second excerpt

In reading history, I am accustomed to considering who and what the author may be. If he is a professional writer, I expect to learn from him mostly style and language. If he is a lawyer we should note what he offers on civil government, legal controversies and the life; if an ambassador, what he says on the sources of information and the conduct of negotiations. We should always bring the cobbler to his last.

I like historians who are either very simply or very capable. The simple ones make it their business to merely collect what comes to their hand and record it faithfully, without discrimination or contributing anything of their own mind; they leave us to our own judgement in getting at the truth. Such for example is honest Froissart, who is frank enough, when he is caught in error, to correct it on the spot and who gives us the varied accounts made to him of the same event and even the rumour current in his time. His is the naked raw material of history, which everyone may profit by as far as he can.

Excerpt Number three

The really capable and excellent historians possess the judgement to sift the reports that come to them and choose those most likely to be true. From the mind and character of a prince, they deduce this intention and put the proper words in his mouth. But certainly this privilege belongs to a very few

As for the others, who fall between the two (and they are the majority), they spoil everything. They want to chew our meat for us. They assume the right to judge history and accordingly distort it to their own bias. They undertake to select what is worthy to be known and often hide from us the very word and gesture which would teach us the most. They omit as incredible as anything they can’t understand and many things, perhaps because they don’t know how to express them in good Latin or French.

For the most part, but especially today, your historian or biographer is elected for work because he knows how to handle language as if we were to learn grammar from them. They are hired to weave the reports they pick up on the streets into a pleasant jingle of words and sell us so much babble. But good histories are those written by men who either commanded or participated in the events they describe or at least have had similar experiences. Even so, the research for truth is delicate. Asinius Pollio found mistakes in the histories of Caesar himself, either because he could not have his eyes everywhere or credited the false account of his lieutenants.

The Fourth Excerpt

As a matter of fact, the knowledge we have of our own affairs is obscure enough. To aid my weak memory, I have adopted a custom of late to note at the end of very book I read (and do not intend to read again) the date when I finished it and what in general I thought of it. And yet it had befallen my time and again to open a book as new and untasted which I had carefully read a few years before and scribbled up with my notes.

The name of this author and a great book are as follows:

Michel de Montaigne and the title of his book is “The Complete Essays of Montaigne”, and the best part is that you can read it for free.

The leaders represent less than 2% of the population yet take in more than 90% of the profits. Getting to this stage is not easy as it involves changing one’s ingrained modes of behaviour. Sol Palha

Article Overview

Indeed, in this day and age, the typical investor may access data that erstwhile was privy to the pockets of those with great wealth. Albeit, as this information has become commonplace, it does not give the investor an advantage. Nay, the info that doth hold value is the kind that is hard to obtain or is overlooked by the masses.
Hark! Welcome to the wondrous realm of mass psychology. It doth perform as it did in yesteryear, forsooth! To wit, it doth posit that one should sell only when the crowd is in a state of euphoria and buy when the masses are in a state of confusion or alarm.
Behold, patience and discipline are the two most vital traits that one ought to master in the markets. As it stands, hard work doth rank lowly in the realm of investing, and patience doth pay rich dividends. In truth, the course of action that one must undertake is to refrain from being a lemming, and instead take up a stance that is opposed to the masses. Forsooth, there is no safety in numbers in the markets, and one ought to shun such thinking.

FAQ

Q: What does it take to succeed in the markets?

A: To succeed in the markets, one needs to go against their natural instincts. It’s essential to stop following the crowd and start thinking outside the box. Mass psychology is a valuable tool for gaining an edge over other market participants, and it’s easy to understand if you’re open to new ideas. Furthermore, patience and discipline are the most critical traits to master in the markets, while hard work ranks at the bottom.

Q: Why is patience necessary in investing?

A: Patience pays off handsomely in investing, while hard work is more suited to manual labour. A patient investor can wait for the right opportunity rather than chasing after the latest trend like a member of the hive mind. By waiting for the right investment, one can avoid buying at the top of the market and instead purchase when prices are lower.

Q: What is the hive mind mentality in investing?

A: The hive mind mentality refers to the tendency of people to follow the crowd and think like lemmings. In the markets, safety lies in taking a contrarian stance and avoiding the hive-mind mentality. Doing so can help ensure that you’ll come out ahead in the long run.

Q: What is mass psychology?

A: Mass psychology is the study of the behaviour of groups of people, especially in the context of financial markets. The principle of mass psychology suggests that one should sell only when the masses are overly optimistic and buy when they are panicking or uncertain. By understanding the crowd’s behaviour, investors can gain an edge in the market.

Q: What does Michael Montaigne say about history and historians?

A: Michael Montaigne says that historians should be very simple or capable. The simple ones make it their business to merely collect what comes to their hand and record it faithfully, without discrimination or contributing anything of their own mind; they leave us to our own judgement in getting at the truth. The capable and excellent historians possess the judgement to sift the reports that come to them and choose those most likely to be true.