Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (1852)(www.gutenberg.org)
98 pointsby lstodd3 hours ago10 comments
  • wduquette2 hours ago
    Excellent book. The high point for me was the enterprising fellow who set up a stall in London during the South Sea Bubble (the original bubble!), allowing people to invest in "An undertaking of great advantage, but nobody to know what it is." People lined up for a couple of days to give the fellow their money...after which the fellow disappeared, never to be seen again. No lies detected!
    • jgilias35 minutes ago
      Wasn’t tbe Tulip Bubble the original bubble?
    • Joel_Mckay41 minutes ago
      Well they did disrupt the market, albeit at the cost of looking over their shoulder for the rest of their life. lol =3
  • scyclowan hour ago
    This is a fun book, but it famously embellishes, exaggerates, and sensationalizes the tulip bubble [1]. The efficient markets people obviously don't like the story, but there doesn't seem to be much evidence that it happened on the same scale that Mackay portrays it.

    [1] https://en.wikipedia.org/wiki/Tulip_mania#Modern_views

    • zeafoamrunan hour ago
      Yes a lot of it was based on anti tulip propaganda pamphlets that circulated at the time, and survived more because they were more interesting due to the exaggerated stories.
  • dpflanan hour ago
    Along similar lines, the economist John Kenneth Galbraith has a book on financial bubbles and irrational crowd mentalities in financial market over the centuries: A Short History of Financial Euphoria [1]. Short, approachable, and interesting.

    [1] https://www.goodreads.com/en/book/show/270746.A_Short_Histor...

    • cs702an hour ago
      ... and funny too. A great book!
  • rauljara2 hours ago
    My intro to psychology classes was one of the most valuable classes I ever took, just with the way it systematically shattered my own notion of how much I could trust my own notions of perception and thought to be a rational and accurate reflection of reality. I definitely had a notion of how irrational “people” could be before that, but of course I somehow thought I was above all that.
    • steezeburgeran hour ago
      This is why my favorite book is Thinking, Fast & Slow. It blew my mind and totally made me think about almost everything differently.

      https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow

    • paytonjjones20 minutes ago
      This is a common takeaway from Intro to Psychology but unfortunately it's just...not very true to life (or to psychological science).

      It's a fault of us psychologists. The most interesting studies are those that are surprising, so that's what psychology classes are packed with. But we should know better, because that's just selection bias in action. Historically, this has led to intro courses consisting of 50%+ irreproducible studies.

      But even after the reproducibility crisis cleanup, the selection bias still remains in place. There aren't a ton of fun studies about the typical accuracy of perception or how humans are often quite thinking and rational.

      • jona-f11 minutes ago
        Thank you, we need more of you. Though, I don't think we will ever be "after the reproducibility crisis cleanup".
  • rawgabbit3 hours ago
    Supposedly investors are leveraging/borrowing money to buy into AI stocks right now...
    • smallmancontrov2 hours ago
      Oh, yeah, that's cooking lol: https://fred.stlouisfed.org/series/BOGZ1FL663067003Q

      Speaking of which, I noticed that the big market reversal during the beginning of the Iran war happened right around when ESLR requirements were due to relax. Is this a transmission mechanism for that? Did some of the big brokerages run a big promotion (0% APR on margin debt!) or something?

      • IAmGraydon40 minutes ago
        That chart (and many from FRED) is unfortunately not useful without viewing it on a logarithmic scale. Things can look quite parabolic in a linear space, but exponential growth is quite normal in many financial contexts.

        Click "edit graph" and change units to "natural log". Now look again. You'll see that the growth in margin loans is absolutely normal, and actually has only recently recovered from the dip caused by the 2008 financial crisis.

      • glitchcan hour ago
        $600+ billion doesn't seem like much. I was expecting more tbh.
    • mempkoan hour ago
      Margin debt (debt used to leverage stock buying) Is near record highs, and most of it is flowing into AI stocks ...
    • daveguy2 hours ago
      Ruh roh. https://www.bbc.com/news/articles/cgrkd41n2v9o
      • IshKebaban hour ago
        That's not about LLMs.
        • daveguyan hour ago
          No, but it is about the, very expected, shitshow caused by the AI hype. When companies think cramming AI in any random place is a magic bullet for replacing workers, shit breaks. Because AI is dumb af. LLMs are just the shittiest of the ways to do it.

          Do you honestly think this particular "cram AI in everything" isn't related to the current AI hype? Or that AI applications and companies providing things like this won't crash right along with the general llm AI hype and leveraged investments?

          • IshKebab4 minutes ago
            Nah, the kind of AI they were using has been around for a long time (AlexNet is 13 years old), and before that they would have used classical computer vision.

            The only thing that happened here is that they didn't check it worked before firing everyone. That can happen with any automated system, AI or not.

  • 2 hours ago
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  • mlhpdx2 hours ago
    People have been people since there have been people.
  • throwaway873527an hour ago
    Interestingly, Charles Mackay, the author of Extraordinary Popular Delusions and the Madness of Crowds, was himself one of the most ardent cheerleaders for the Railway Mania [0] "urging people to put their money into the railways and pooh-poohing those who were concerned." and "He had become famous by mocking the bubbles of the past - but had rather less to say about the far more serious bubble that he himself had helped to inflate."[1]

    [0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927396

    [1] https://www.bbc.com/news/business-51311368

  • eykanal31 minutes ago
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