Product Description

"Its easy to understand the excesses of the 90s by reading Bob Menschels captivating, well-written history of the ways investors have been victimized by greed, folly, and chicanery. This is a fascinating chronicle of improbable manias that set off frenzied and thoughtless buying." —Arthur Levitt, former chairman, Securities and Exchange Commission

"This books light-hearted, level-headed insights may be directed at the business world, but they ring equally true for government and public officials. Robert Menschel gives a valuable perspective on the power of the crowd." —Senator Charles E. Schumer

"This wonderfully witty and wise book by one of the most successful investors Ive ever known is a must-read. He reminds us that trees do not grow in the sky and that if it looks too good to be true, it is." —John C. Whitehead, former chairman, Goldman Sachs & Co. and Chairman, Lower Manhattan Development Corp.

"This timeless anthology on the madness of crowds is chock-full of worldly wisdom, relevant anecdotes, and wonderful quotations, interlaced with the light touch of our finest cartoonists. Coming as it does in the aftermath of the great stock market bubble, Bob Menschels fine book is also a useful reminder of what we all knew, deep down, but were afraid to admit: When the perception of stock prices loses its linkage to the reality of corporate values, a day of reckoning always follows." —John C. Bogle, founder and former CEO, The Vanguard Group

"This highly entertaining book is must reading for everyone without exception, regardless of age, wealth, or political persuasion. Menschels delectable presentations expose the very roots of human behavior in a variety of fascinating situations, familiar and unfamiliar. Dont skim; read every word." —Peter Bernstein, author of The Power of Gold: The History of an Obsession and Against the Gods: The Remarkable Story of Risk

Product Details

• Amazon Sales Rank: #606598 in Books
• Published on: 2002-08-30
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 224 pages

From Publishers Weekly
Fear epidemics have plagued people for centuries, and in the past year Americans have weathered anthrax scares, fears of the end of good economic times and fears of terrorism. In his new book, Markets, Mobs & Mayhem: A Modern Look at the Madness of Crowds, Robert Menschel, senior director of the Goldman Sachs Group, shows that, logically, it's "easy to counter" these fear epidemics, yet these epidemics and crowd behavior are often extremely powerful forces that can cause rational people to think and act irrationally. The author sets out to show readers "how to escape the crowd" and "what happens when you can't." He adroitly and sometimes comically charts Holland's mid-1600s' "tulipmania," Chicken Licken's fright about a falling sky, a 1938 panic outbreak spurred on by a radio dramatization of H.G. Wells's War of the Worlds, the Ku Klux Klan's violent acts and more, offering concrete suggestions for keeping one's head when the masses seem to be losing theirs. His book, which includes a foreword by William Safire, is a timely, intelligent and amusing study of peer pressure's extreme capabilities.
Copyright 2002 Reed Business Information, Inc.

Review
"...a collection of vignetttes, stories, proverbs and quotations laced with sound advice for avoiding the stampedes that can be triggered in a volatile marketplace..." -- Financial Times, 4 July 2002

"...a collection of vignetttes, stories, proverbs and quotations laced with sound advice for avoiding the stampedes that can be triggered in a volatile marketplace..." (Financial Times, 4 July 2002)

From the Inside Flap
"After heavy doses of ‘irrational exuberance’ and ‘infectious greed,’ I was happy to read such a witty and, at the same time, sensible and wise book written by someone with the unusual combination of a stylish pen and a great investment track record."
–Peter G. Peterson
Chairman, The Blackstone Group
former Secretary of Commerce
Chairman, Federal Reserve Bank of New York

A few years ago the Nasdaq was flying high and dot.com millionaires were a dime a dozen. The American economy appeared to be riding an endless wave of soaring stock prices and huge IPOs. Television’s talking heads said that nothing like the tech boom had ever happened before and that there was no reason to think it would ever end.

In fact, it was only the latest version of an important story: group hysteria. Ever since 1630s Holland became the center of a massive explosion in tulip speculation, bubbles and busts have shaped history– economically, socially, and politically. Today, with the scope of the media and the ease of obtaining information, we are more at risk than ever. Elections are won or lost on hype alone; scandal can go global in a matter of seconds on the Internet. Keeping your head has never been harder.

In Markets, Mobs, and Mayhem, Robert Menschel chronicles some of the most memorable instances of mob thinking in history. He touches on the lynch mob and the Nazis, but his main focus is those well-meaning, intelligent folks who were simply swept up in a wave–fearful that their mail would be tainted by anthrax, or sure that the Nasdaq would never deflate. Bouyed by the crowd or the spreading rumor, we are later hard pressed to remember or rationalize our actions.

From Ponzi’s scheme to the bursting of the Internet bubble, Menschel presents enlightening and often entertaining evidence of the danger inherent in surrendering one’s position to the crowd. Most important, Markets, Mobs, and Mayhem offers expert advice on staying cool in the midst of panic–advice that works just as well in a Wall Street meltdown as it does in a theater on fire.

Whether you’re a savvy investor looking to dodge the next crash, or just want to stoke your independent spirit, Markets, Mobs, and Mayhem is an insightful historical survey of the dark side of human nature.

Customer Reviews

Not for the masses, but that's the point.
This is not a book for the masses. It won't make you rush out and buy anything. It probably won't even change your life in any substantial way. But it will make you think. And it might just prevent you from being victimized by the latest fad or swept away by the next hysteria. Most readers, I suspect, have heard of the tulipmania or the South Sea company madness, but this book gives a brief survey of the lesser known, or lesser recognized, panics or manias, including those that have nothing to do with financial markets. I found it stimulating reading, laced with a little humor.

The book's message, if internalized, operates like a Segway scooter applied to the business world. It should keep you on an even keel. And in the often topsy-turvy world of Wall Street finance (or just life in the 21st Century), it really helps to have an internal gyroscope or automatic stabilizer that keeps you from falling over every time you hit a bump in the road.

It's not a book for the masses. But that's probably just the point. Next time you want to rush out and join the herd, it might help to read, or reread, this book.

Very disappointing
After reading "Devil Take the Hindmost," which deals very intelligently and thoroughly with investment bubbles of all kinds going back to the South Sea Bubble, I was very much looking forward to reading this book, particularly as it has been written by a very successful stock market investor. I was, however, sadly disappointed.

The author expends virtually all of his efforts discussing mob behavior, but rarely in the context of investments and market madness, i.e., most of the examples he uses relate to Ku Klux Klan activities, the French citizens' attack on the Bastille, the Watts riots and other such emotional mob activities. While these are often interesting and sometimes horrifying, they have only tangential bearing on market manias and investment fads. Furthermore, most of the text has been copied and pasted from reports on these activities that were written by others.

As an investment professional (and having invested in the market myself for over 35 years), I have long believed that, at least in the short term, market prices are dictated as much by psychology as by fundamentals such as profit growth, investment return expectations, balance sheets, business strategies, profit margins, competiting products and services, interest rates and such. And I thought the book would provide at least a few insights into investor psychology and how it moves markets; certainly a thorough discussion of the Dotcom and tech manias of recent years would have been a very apt topic for discussion.

Alas! There was no discussion at all about these issues of investment psychology; rather, the author was content to provide example after example of how, many times in the past, mobs are capable of taking on a life of their own and engaging in group-think, abandoning analysis and rational decision-making. Well, I guess we already know that. We are left on our own to try to figure out how "collective mob behavior" infects investors' psyches and affects the movement of stock prices.

Readers who would like a lot more insight into that process should buy "Devil Take the Hindmost," and not waste their time or money on this book.

Ralph

A must-read book with wide appeal!
This book is filled with fascinating true stories of instances where the madness of a crowd made people lose independent rational thought. It's interesting from so many perspectives -- historical, social, psychological, cultural, political in addition to sharing endless amounts of wisdom about the stock market. What wonderful lessons on group psychology!