Memoirs of Extraordinary Popular Delusions and the Madness of Crowds
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.

- 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
In his former role as Senior Online Editor, David edited and wrote a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, David worked on numerous Kiplinger publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He co-hosted Your Money's Worth, Kiplinger's podcast and helped develop the Economic Forecasts feature.
-
-
Is Chevron Stock Set for a Rebound?
Chevron stock received its second analyst upgrade in as many days, boosting hopes for a recovery in the lagging energy major.
By Dan Burrows • Published
-
Where Americans Most Use Deals and Coupons
While you may not be an extreme couponer, you’ve probably had deals on your radar. Here's where shoppers practice the most savings strategies.
By Erin Bendig • Published
-
Stock Market Today: Stocks Close Lower Ahead of Key Debt Ceiling Vote
The major benchmarks spent most of Wednesday in the red as the House prepares to vote on the debt ceiling deal this evening.
By Karee Venema • Published
-
Stock Market Today: Stocks Give Back Big Debt Ceiling Deal Gains
The major benchmarks opened solidly higher Tuesday after lawmakers announced a debt ceiling deal, but optimism faded into the close.
By Karee Venema • Published
-
Stock Market Today: Stocks Jump on Debt Ceiling Progress
The major benchmarks rallied into the long weekend after lawmakers said they're making strides in debt ceiling negotiations.
By Karee Venema • Published
-
Stock Market Today: Stocks Rise After AI Outlook Sparks Explosive Nvidia Rally
The Nasdaq and S&P 500 made impressive advances today after chipmaker Nvidia forecast record quarterly revenue on AI growth.
By Karee Venema • Published
-
Stock Market Today: Stocks Sink on Debt Ceiling Impasse
While the major benchmarks finished in the red, retail stocks Abercrombie & Fitch and Kohl's popped after earnings.
By Karee Venema • Published
-
Debt Ceiling Crisis: What Did Stocks Do the Last Time the U.S. Nearly Defaulted?
Playing chicken with the debt ceiling has been bad for stocks in the past.
By Dan Burrows • Last updated
-
Stock Market Today: Debt Ceiling Anxiety Weighs on Stocks
While a Monday night meeting between Biden and McCarthy was "productive," there are no signs the two sides are nearing a deal.
By Karee Venema • Published
-
Stock Market Today: Stocks Waver Ahead of Biden, McCarthy Debt Ceiling Talks
The major indexes made modest moves today as investors kept a cautious eye on debt ceiling discussions.
By Karee Venema • Published