The primary cost of group membership manifests itself only near the end of a crowd’s life cycle

"For investment crowds, the primary cost of group membership manifests itself only near the end of a crowd’s life cycle. Once the crowd’s investment theme has driven market prices too high or too low, the inevitable return of the asset price to fair value causes the crowd’s late joiners to incur substantial investment losses. And it has been my observation that the majority of members of any investment crowd join only after the asset is priced above fair value (for a bullish investment theme) or below fair value (for a bearish one). It is important to remember that this sort of cost is unique to investment crowds and is not generally associated with membership in any other type of social group. For this reason it is not likely to be anticipated by people who have little experience as members of investment crowds."

The primary cost of group membership manifests itself only near the end of a crowd’s life cycle