The narrative of prosperity blinds investors to the risks of speculative excess from "summary" of A Short History of Financial Euphoria by John Kenneth Galbraith
The narrative of prosperity is a powerful force that has the ability to blind investors to the risks of speculative excess. When times are good and the economy is booming, it is easy to become caught up in the excitement of potential profits and overlook the potential dangers that lie ahead. Investors are often driven by a sense of euphoria and optimism that can cloud their judgment and lead them to take on more risk than they can handle. In periods of economic growth, there is a prevailing belief that the good times will continue indefinitely. This belief creates a false sense of security and encourages investors to ignore warning signs that could indicate an impending crash. The narrative of prosperity feeds into this belief, painting a rosy picture of endless opportunity and prosperity. As investors become more and more convinced of their own invincibility, they are willing to take on increasingly risk...Similar Posts
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