Trading Tulips: The Fallacy of the Herd Mentality
“Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd.”
In the late 16th century, the Dutch tulip market was blooming—in fact it was booming. Although tulips were a novelty for most of the world, they were one of Holland’s major exports and status symbols for wealthy families across Europe.
During the height of their popularity, tulips became so popular that people were making and losing fortunes literally overnight. In fact, at one time tulips were selling for as much as ten times the price commanded by Europe’s …read more