- Author: Charles MacKay
- Publisher: FB&C, 418 pages
In the early 2000s, one of my wife's cousins pressed Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay on me. His timing was a bit off. Had I read it a few years earlier, I might have made a bundle as a short-seller of internet stocks. The book's tale, you see, is about the history of collective manias, and financial ones in particular.
You may or may not have heard of the South Sea Bubble or the time that the generally sober Dutch lost their minds (and guilders) speculating on flower bulbs, but you'll come to recognize the similar elements of these episodes. Take a novel commodity, preferably one that's hard to value, such as land overseas, or the tulip, which was then somewhat new to Europe. Find some interesting charlatans to promote them. Corrupt whatever institutions regulate the sale of shares in these enterprises. Watch the price go nuts as a wide spectrum of society buys in to the latest "can't-lose" proposition. Wait for the inevitable reversal and collapse.
MackKay weaves wonderful anecdotes, with lots of lively detail (such as one precious tulip bulb that got eaten by mistake) around these sadly repetitive story lines. It's rather amazing to think that this book is more than 170 years old -- and is still in print. You'll see it cited by authors such as Andrew Tobias (he wrote the foreword to my edition) and Michael Lewis.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Visit the Kiplinger Bookshelf
-
AI Goes To SchoolThe Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
Fed Leaves Rates Unchanged: What the Experts Are SayingFederal Reserve As widely expected, the Federal Open Market Committee took a 'wait-and-see' approach toward borrowing costs.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are Saying
Federal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
-
Fed Cuts Rates Again: What the Experts Are Saying
Federal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
-
Stock Market Today: Stocks Retreat Ahead of Nvidia EarningsMarkets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
-
Stock Market Today: Stocks Edge Higher With Nvidia Earnings in FocusNvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
-
Stock Market Today: Dow Hits New Record Closing HighThe Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
-
Stock Market Today: Stocks Pop After Powell's Jackson Hole SpeechFed Chair Powell's Jackson Hole speech struck a dovish tone which sent stocks soaring Friday.
