Psychology of the Stock Market

In 1912, G.C. Selden made a radical claim: the stock market isn't driven by fundamentals or rational calculation, but by the unchanged human psyche. Every boom and every crash, he argued, follows the same psychological pattern: greed feeding optimism, then optimism curdling into reckless speculation, then fear overwhelming reason in the sell-off. He wrote this seventeen years before the 1929 crash, and his analysis describes the very psychology that made it inevitable. Selden examines how investors collectively chase performance, how prices detach from underlying value, and how the market becomes a mirror of human emotion rather than rational assessment. What makes this book remarkable is its durability: the psychology he identified hasn't changed, making his observations as relevant to today's electronic markets as they were to the ticker-tape era. For anyone seeking to understand why markets move the way they do, and why we keep repeating the same financial follies, this century-old work remains startlingly vital.