Groupthink mentality leads to risky behavior from "summary" of The Money Culture by Michael Lewis
The collective mindset of a group can often lead to reckless decision-making. When individuals are surrounded by like-minded people who all share the same opinions and beliefs, they may feel pressured to conform and suppress any dissenting views. This phenomenon, known as groupthink, can result in a false sense of security and an overestimation of the group's abilities. In the financial world, where high-stakes risks are taken daily, groupthink can be particularly dangerous. Traders and investors who are part of a tight-knit group may become overly confident in their decisions, leading them to take on increasingly risky bets without fully considering the potential consequences. This herd mentality can result in significant losses when the market turns against them. Author Michae...
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