Extraordinary Popular Delusions and the Madness of Crowds

You can judge this book by its title. It is a classic effort detailing the follies of mass psychology. The author is successful in showing how a crowd of rational thinking people act completely irrationally as trends become popular and people are psyched to believe that they are the gospels of truth. The real life events in this book are the basis for the study of group dynamics and psychology. It is written in great detail, so for those who love studying and learning from history, this is great reference material. It helps understand the prevailing mind set during a mania. When we think of recent historical events in financial markets (Japanese stock market bubble, NASDAQ bubble, Housing mortgage bubble etc.) and investigate the prevailing mind set during these times, it rings a bell. It reminds me of the quote, ”Borrowed enthusiasm makes you a speculator not an investor.”The believers of the “efficient market hypothesis” condemn Mackay’s material as being exaggerated and mistimed to draw such conclusions. However, I would agree with what the author has tried to prove in this book as historical evidence has more relevance than economic theories.The readers can also keenly observe how government actions can and have played an instrumental role in fuelling and diffusing the manias and panics. This book will remain as evergreen as it is today even decades later. It enforces the belief that the world can be a very irrational place.The main areas of focus for me were:1. The Mississippi Scheme2. The South Sea Bubble3. The TulipomaniaFamous quotes from the book:• "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."• "Of all the offspring of Time, Error is the most ancient, and is so old and familiar an acquaintance, that Truth, when discovered, comes upon most of us like an intruder, and meets the intruder's welcome."

I wish the online previewer had this edition instead of the sample they show. This one has only the first three chapters of McKay's work dealing with the financial bubbles: Mississippi Scheme, South Sea Bubble, and Tulipmania. It is a large, thin paperback that can be leisurely read in a few hours.With the everything-bubble bursting, every investor should at least read the first three bubble stories. When I was young, my professor said not to invest a single dime until you've read McKay's Extraordinary Popular Delusions and the Madness of Crowds. I remember thinking how large it is, but do not be daunted. The first three chapters will give you enough basis to resist jumping into bubbles and learning to spot them. For example, I refused to buy NFTs of pixel art pictures that are supposedly "rare." I mean, at least back in the day, a tulip bulb was truly rare, but pixel art pictures can be generated by computer with endless animal faces with an unlimited supply of minting avatars.Anyway, buy this thin volume as a gift to millenial investors who have not been through the bubbles and crashes us older folks have seen. The illustrations are delightful and provide a nice visual break to the long paragraphs and colorful descriptions and anecdotes of each period of manic behavior, including the guy who thought a tulip bulb was an onion and ate it.

This book is a classic if you want to see a sweep of history and how easily we drop into madness.

This was a fun read on the tulip craze. We didn't read the other parts. We had picked up a children's book (The Great Tulip Trade) at the library and then had to get more facts. The children's book was so touching we bought a copy too.

Terrible edition, it references 27 footnotes, but there are no actual footnotes to be found. A cheap and nasty extract of the original book. I will write this off to poor selection and buy the full version of what I imagine to be an interesting book.