Price increases fueled more buying from "summary" of The Great Crash 1929 by John Kenneth Galbraith
Price increases had a peculiar effect on the minds of the public. As stock prices went up, there was a general feeling that they would continue to go up. This feeling was not confined to the professional speculator. It spread to people who had never invested in the stock market before. The rise in prices was itself an indication of the desirability of owning stocks. People were drawn to the market by the prospect of easy and quick profits. The more prices rose, the more people were inclined to buy. It became a self-reinforcing cycle. The buying itself pushed prices higher, which then encouraged more buying. People were caught up in the excitement and optimism of the market. They believed they were participating in a sure thing. The fear of missing out on potential gains drove even more people to buy stocks. The idea that the market was a one-way street to riches became deeply ingrained in the minds of the public. There was a sense of urgency to get in on the action before it was too late. People were willing to overlook the risks and potential downsides of investing in stocks. They were blinded by the promise of ever-increasing wealth. The euphoria surrounding the market created a bubble that kept expanding as more and more people jumped in.- The frenzy of buying fueled by rising prices was unsustainable. It was a classic case of a speculative bubble that was bound to burst. The very factors that had driven prices up – excessive optimism and irrational exuberance – would eventually lead to a sharp reversal. When the inevitable crash came, many would be left with substantial losses. But in the midst of the mania, few were willing to consider the possibility of a downturn. They were too caught up in the excitement of the moment to see the dangers lurking ahead.
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