Greed and fear drive the cycles of financial euphoria and panic from "summary" of A Short History of Financial Euphoria by John Kenneth Galbraith
In financial markets, the forces of greed and fear play a crucial role in driving the cycles of euphoria and panic. Greed propels investors to take excessive risks in the pursuit of higher returns, often leading to unsustainable asset bubbles. When prices are soaring, greed takes hold as investors become irrationally exuberant and lose sight of the underlying risks. During periods of financial euphoria, investors exhibit a herd mentality, fueling a self-reinforcing cycle of rising prices and increased speculation. The fear of missing out drives individuals to jump on the bandwagon, further inflating asset prices. As euphoria reaches its peak, investors become blinded by the promise of quick ...
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