The Herd

Herd mentality rules during a financial crisis because people are wired to follow the crowd when times are uncertain, experts say.

Brain and behavior studies clearly show that when information is scarce and threats seem imminent, people stop listening to their own logic and look to see what others are doing.

In this case, running with the herd may not make good sense, said Paul Zak of the Center for Neuroeconomics Studies at Claremont Graduate University in California. "The group changes how you see the world in some way," he said. "Our brains are wired to accept the group opinion of the world."

Excerpts from article

Cow remembers the market "crash" of 1987 and how pessimistic people were then. And how the market rebounded to historic highs.

Moo!