Latest Prechter on Financial Herding

Prechter points out that even corporate insiders herd, because "their misperceptions are the same as everyone else's. When the market goes up for a long time, corporate health factors strengthen, and when it goes down, they weaken. Insiders misinterpret these indications of their own company's present health as being the same as its prospects. Whenever their stock gets expensive, they think it's cheap, because they feel optimistic about the company's future."