Wednesday, June 19, 2013

On Manias

"A very human aspect of manias is that no prudent professional is perceived to add value... Indeed, the professional with a knowledge of history and value is eventually judged an impediment to success. The reason is that the investments that are the focus of the mania are widely accepted as the benchmark of normalcy. Therefore, only a professional who 'beats' that benchmark is considered successful. As the focus of the mania narrows, that task becomes impossible. This is another difference between a bull market and a mania. In a bull market, professionals can add value relative to the benchmark, which is usually conservative. In a mania no one can add value."


Anonymous said...

Interesting quote. Would you share the source?

CP said...