Charles Mackay on the South Sea bubble

Nobody seemed to imagine that the nation itself was as culpable as the South Sea Company.  Nobody blamed the credulity and avarice of the people — the degrading lust of gain... or the infatuation which had made the multitude run their heads with such frantic eagerness into the net held out for them by scheming projectors.  These things were never mentioned. 

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Charles Mackay on speculative folly

Every age has its peculiar folly; some scheme, project, or fantasy into which it plunges, spurred on by the love of gain, the necessity of excitement, or the mere force of imitation.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1841)

(Cited by Randall Forsyth, "WallStreetBets Might Be New, but Bubbles And Busts Are Not," Barron's, January 30, 2021.)

Kevin Duffy on GameStop madness

While I'm not shedding any tears for the big hedge funds getting crushed by swarms of Robinhood day traders, this is a warning - exactly the kind of insane behavior you would see at a generational top. I follow the stocks of retailers pretty closely.  On a good day, GameStop (GME) might be worth $2 billion.  It hit a market cap of $30 billion yesterday and is set to open up 70% (after getting being down 44% yesterday). 

We've lost sight of the fact that the financial markets exist to efficiently allocate capital.  Mock and destroy that function and you've done the same to a functioning economy.

As Charles Mackay warned in Extraordinary Popular Delusions and the Madness of Crowds (1841): 

Money, again, has often been a cause of the delusion of the multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper.

~ Kevin Duffy, Facebook post, January 29, 2021

Charles Mackay on the three causes of discontent of mankind

Three causes especially have excited the discontent of mankind; and, by impelling us to seek remedies for the irremediable, have bewildered us in a maze of madness and error. These are death, toil, and the ignorance of the future.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds, "Understanding the Forces Behind Group Mentality, Thoughts and Actions,” p. 104

Charles Mackay on learning from the mistakes of the past

Let us not, in the pride of our superior knowledge, turn with contempt from the follies of our predecessors. The study of the errors into which great minds have fallen in the pursuit of truth can never be uninstructive.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Charles Mackay on speculation

Money, again, has often been a cause of the delusion of the multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1841)

Charles Mackay on crowd behavior

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1841)