Running with the Bulls

  When you speak to 99% of average, everyday people like myself, we seem pretty intelligent, Right? We are Informed, rational, intelligent people endowed with common sense. 

  Then why do we often hear about humans acting in a "Herd Mentality"?   





  We know the market moves with a herd mentality.  It was a herd of greed that threw us into the current financial crisis we have yet to recover from.  The talking heads on T.V. would have us believe the Machines are controlling our Financial Destiny and played a huge part in the current mess.  Though there is some truth behind this, it is not the only reason.  Electronic market trading has exaggerated this to extremes that occur more frequently but it is not a new phenomenon.   For proof of this, one only has to look back at the great financial periods in history (Black Friday).   Even before the days of computer trading we would experience corrections, correlation of various financial products and market crashes.  During trading hours the Bulls or the Bears are in charge of the direction the market is taking. Buying & selling based purely on momentum, which in turn drives the market further in the same direction until something triggers an event that turns the direction.   It was a herd of greed that threw us into our current financial crisis that we have yet to recover from.


  When you look beyond this humans form social herds in various forms. Some have clearly defined leaders that naturally draw others to follow them.   Others herds have no leader because they are created out of a mass emotion enveloping all in its area. In times of revolt we watch Riots form and move like a herd of stampeding bulls.  Panic & fear is able to grip towns, cities and nations causing citizens to react like a stampeding herd of wild beasts.  We can look at elections for other forms of the herd complex.  We had a democratic herd running during 2008, overwhelmingly sweeping  then Senator Obama into the Presidential Office.  The enthusiasm for Democrats and fear of Republicans has run its course and the herd is settled.  Now we have a polar opposite in a Republic herd forming which will sweep Tea Party and various GOP candidates into office.  

  If this is how Financial decisions are made, how Leaders are elected and the course of Nations are determined, then how do we thrive & prosper in this environment?  How do we build a stronger future for ourselves and our children?  This is where common sense and our own judgments are important.  Do we follow the herd even if its running off a cliff or do we follow our own path and hope not to be destroyed in the wake of the wild beasts?