Camomille: most money made on the recovery

'Madness of crowds' psychology governs investment policy

Crowd-blurred motion

When attempting to explain and understand why markets sell off, it becomes apparent that, although easily observed and explained after the event, market sell-offs are almost impossible to predict.

Didier Sornette (Why Stock Markets Crash) echoes this when he writes that bubbles do not burst because of the significance of a single event, but rather because market participants have become “irrationally exuberant” and, as such, market conditions have developed unsustainably. When the bubble finally