Market irrationality became evident from "summary" of The Great Crash 1929 by John Kenneth Galbraith
One of the most striking features of the stock market in the months leading up to the crash of 1929 was the clear and undeniable presence of irrationality. Investors seemed to be gripped by a collective hysteria, driving prices to ever higher levels based on nothing more than speculation and unfounded optimism. This irrationality was evident in many ways, but perhaps most notably in the disconnect between stock prices and the underlying value of the companies they represented. As prices soared to dizzying heights, it became increasingly clear that they bore little resemblance to the actual earnings and assets of the companies in question. Furthermore, the behavior of investors themselves was often irrational and erratic. Instead of basing their decisions on careful analysis and sound judgment, they were swayed by emotions and impulses, buying and selling stocks in a frenzied and unpredictable manner. The media played a significant role in fueling this irrationality, with newspapers and magazines touting the seemingly endless opportunities for wealth in the stock market. Stories of ordinary people striking it rich overnight only served to further inflame the public's appetite for speculation. In this climate of irrational exuberance, warning signs were ignored or dismissed. Analysts who dared to question the sustainability of the market's meteoric rise were often ridiculed or marginalized. It seemed as though no amount of evidence could shake the prevailing belief that stock prices would continue to climb indefinitely.- The crash of 1929 served as a sobering reminder of the dangers of unchecked irrationality in the financial markets. The swift and brutal collapse of stock prices exposed the folly of believing in perpetual growth and prosperity without a solid foundation of economic fundamentals. The aftermath of the crash was a harsh lesson in the perils of blind speculation and the importance of maintaining a rational and disciplined approach to investing.
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