I subscribe to one daily blog, and it is the one written by Seth Godin. Seth is a wonderful thought leader on all things business.
He posted a second blog on August 23 following an earthquake in Virginia that measured 5.9 on the Richter Scale.
Please replace the word “earthquake” with the words “stock market correction” and it makes just as much sense. Seth’s blog follows:
Two earthquake-related thoughts about human nature
1. The first thing that happens after we encounter an earthquake is to wonder if anyone else felt it. The need for group validation is widespread and happens for events that don’t involve earthquakes as well.
If those in the tribe feel something, we’re likely to as well. That’s why people look around before they stand up to offer an ovation at the end of a concert. Why should it matter if any of these strangers felt the way you did about the event? Because it does. A lot. Social proof matters.
2. Organizations are busy evacuating buildings, even national monuments. Even though experience indicates that the most dangerous thing you can do is have tens of thousands of people run down the stairs, cram into the elevators and stand in the streets, we do it anyway. Why? Because people like to do something. Action, even ineffective action, is something societies seek out during times of uncertainty.
Seth does a great job summing it up doesn’t he?
Now, I’m one of those people that stand up to offer an ovation right away if I’m so inclined. I’m not at all interested if no one else in the audience does so.
That also may partially explain my tendency to recommend that investors add to equities when the majority are selling.
I don’t give standing ovations for just any performance, and I don’t recommend just any equity investment when bear markets strike. But for the deserving, I am happy to be one of the first to recognize the value that I see, stand up, and be counted.
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