◈ GLOSSARY · MONEY MINDSET
Herd Mentality.
A definition, in plain English — with the books that teach it.
ClearValue Books · reviewed against sources ·
◈ DEFINITION
What it means
Definition
The pull to do what everyone else is doing — buy what's hot, sell what's falling — because being wrong with the crowd feels safer than being wrong alone. It's how bubbles inflate and how capitulation bottoms form. The honest caveat: the herd is right most of the time in the middle of a trend and catastrophically wrong at the turns, which is exactly when following it costs the most.
◈ IN PRACTICE
Example
In late 2021 retail investors poured record amounts into meme stocks and speculative tech. Most of those names were down 70-90% within 18 months. The crowd wasn't 'wrong' to be excited — it was wrong about price.
◈ RECOMMENDED READING
