MoneyWeek book review: Mobs, Messiahs, and Markets

Why do ostensibly intelligent people pay six times their salary for a home they can ill afford? Why did equally smart people rush to buy shares in technology companies that didn’t make any money and never would? This new book explains it all.

Why do ostensibly intelligent people pay six times their salary for a home they can ill afford? Why did equally smart people rush to buy shares in technology companies that didn't make any money and never would? The answer is mainly because other people were doing the same. Sadly, following others blindly is a certain route to financial ruin as Mobs, Messiahs, and Markets, the new book from MoneyWeek's publisher Bill Bonner and co-author Lila Rajiva, amply demonstrates.

In a sharp-witted jaunt through the mass hysteria that's defined markets and people through the ages, Bonner and Rajiva observe that when large groups of people "are thrown into the company of legions of their fellow men, some chemistry turns humans who are individually of irreproachable integrity and unimpeachable prudence into stark, raving blockheads". That's when they start burning witches', swapping tulip bulbs for houses, or, as we saw not so long ago, putting money into stocks ending in .com'. The message is simple. Man is a herd animal, say the authors. And just like the swallow or the wildebeest, he will move with his pack.

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MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.