“Price is the noise of the crowd, value is the whisper of truth. One can fool you today, the other feeds you tomorrow.” YNOT
Folks are funny creatures. Put a shiny object in front of us—be it a cottage by the sea, a stock with a catchy ticker, or a coin with a dog’s face—and suddenly the whole crowd wants it, all at once, as if it were the last loaf of bread in town. Prices climb higher than a cat in a thunderstorm, and still we chase them, convinced that if everybody else wants it, it must be worth the asking. But wanting and affording are two different beasts, and sooner or later the crowd finds that out the hard way.
The Law of Wanting Too Much
At its heart, every market—whether houses, stocks, or gold—obeys the same law: supply and demand.
- Real estate: Limited homes plus eager buyers equals higher prices. But when the sticker rises too far, buyers vanish, and sellers are left cooling their heels.
- Stocks: A crowd chasing the same ticker can send shares flying sky-high. Yet if earnings can’t justify the leap, gravity eventually pulls them back down.
- Gold: A safe-haven metal that rises when faith in paper weakens. But even gold has its manias, when the fear of missing out becomes more powerful than the fear of inflation.
- Bitcoin and meme coins: Here we see pure psychology at work. Scarcity meets speculation, and the rush of easy riches lures in the masses. But digital or not, bubbles pop the same way as they did with tulips centuries ago.
- Art and cars: Whether it’s a Picasso or a limited-edition Ferrari, value is often decided less by usefulness than by prestige. A bidding war doesn’t always reflect lasting worth—it reflects bragging rights.
- Tulips: The poster child of mania. In 17th-century Holland, bulbs were traded for the price of a house, until one morning no one was willing to pay, and fortunes evaporated overnight.
The Cycle
Every craze follows the same rhythm:
- The crowd notices something new, scarce, or fashionable.
- Demand surges, pushing prices up.
- Higher prices attract more buyers, feeding the frenzy.
- At some breaking point, the price is too high, demand weakens, and the bubble deflates.
It’s a cycle as old as trade itself. Booms turn to busts, and busts plant the seeds of the next boom.
FOMO — the Fear of Missing Out
If bubbles have fuel, it’s FOMO. When people see neighbors getting rich on real estate, friends bragging about Bitcoin, or headlines praising the latest hot stock, they feel a pull stronger than reason. Fear of being left behind can turn cautious savers into reckless buyers, chasing prices long after the smart money has stepped aside. But markets don’t reward the last buyer in line—they punish them. FOMO is the whisper in your ear that says, “Everyone else is in, why aren’t you?”—and it’s the same whisper that has emptied more pockets than it has ever filled.
Price vs. Value
The hardest lesson is this: price is not the same as value.
- Price is what the mob is willing to pay today.
- Value is what the thing is truly worth over time.
A house has shelter. Gold has durability. Stocks represent businesses that (ideally) make profits. But meme coins, tulips, or hype-driven art often lack lasting value once the excitement fades. The wise investor looks past the shouting crowd and asks: “What will this be worth when the music stops?
So it goes with houses, stocks, gold, Bitcoin, cars, or tulips: desire drives the price, and the price drives desire straight into a wall. The trick isn’t to follow the mob when it’s hungry, but to keep your wits when the feast looks too rich. For in every market—whether it’s a front porch, a digital coin, or a canvas on a gallery wall—the day always comes when the crowd grows quiet, the bidding slows, and the fellow who prized value over fashion finds himself sitting pretty.
“Well, don’t just stand there—hurry up, you’re already late to get in line for that shiny new iPhone, or may be you sit this one out.”
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