“You see, the reason stock prices move up and down so much is that we all like to join crowds, social groups of like-minded people. When such crowds form around investing themes in the stock market, they push stock prices too high or too low relative to fair value. Why? Crowds suppress the dissenting views of nonmembers and amplify the consensus views of their members. Crowd members act together, not independently, and when this happens the market price strays substantially from fair value.”
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