"Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits - a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities."
Might as well be a thousand words. But...
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Updating: This is Keynes' "animal spirits" explanation of economic activity. Y's post suggests this is a much better way to explain fluctuations in financial activity than the "efficient markets" story. Neither buying strategy should be dominant if financial markets are "efficient." That betting with the crowd is so dominant is....interesting.