Definition
The phenomenon where the collective feelings, sentiments, and psychological biases of a large group of market participants significantly influence asset prices.
Why it matters (in Poovi’s context)
Understanding crowd emotion is vital for recognising market bubbles, crashes, and opportunities driven by sentiment rather than fundamental value.
Key properties or components
- Fear
- Greed
- FOMO (Fear Of Missing Out)
- Herd mentality
- Hype
Contradictions or debates
Some believe efficient market hypotheses suggest that crowd emotion is quickly priced in and difficult to exploit consistently.