Economics for growth – A crowd psychology expert’s job!‏

One thought on “Economics for growth – A crowd psychology expert’s job!‏”

  1. Interesting article, Vaibhav!
    What you write is true to a great extent. Sentiment is indeed a great force in driving the markets.
    The question is: Should the market or economy be driven by sentiment?
    Fear and greed are two emotions that all market participants are very well aware of. But it is a fact that the greatest fear coincides with the market bottom when one should actually be greedy and vice versa. As a result the masses more often than not end up losing money.
    So it’s just not sentiment but the right sentiment at the right time which is needed to guide the economy to a path of sustained growth.
    Sentiments themselves should be illumined by the light of reason and not remain blind.
    That’s the job of a true leader.
    He or she should not only be an expert in crowd psychology but also proficient in economics in order to channelise the sentiments of the masses towards desirable ends. Adolf Hitler was also a mass leader, but what fate did Germany meet under him?
    Persons blinded by emotion do create an impact, but it’s short-lived.
    Fundamentals determined by reason eventually take over.

    There is an old adage on Wall Street:
    “The market is a voting machine in the short term; but a weighing machine in the long run!”

    Like

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