Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

Blaming the Investor—She's a Pig

Challenged to explain the losses taken by small investors in the aftermath of the bubble, investment professionals point to the investors themselves.

Writing at the height of the market, and with commendable recognition that the market was overvalued and in danger of decline, Robert Shiller commented, “The market is high because of the combined effect of indifferent thinking by millions of people, very few of whom feel the need to perform careful research… and who are motivated substantially by their own emotions, random attentions and perceptions of conventional wisdom.”^[77]

Writing after the market had collapsed, a major business magazine reported, “Experienced money managers say the lesson to draw from the ...