Self-Fulfilling Prophesy

I am currently reading many essays about different financial crises and bank risks.

Whilst I’m learning a lot about technical, political and regulatory issues, it is interesting to note the impact that sentiment, belief and groupthink had in these historic events.

Many financial disasters started out as small isolated events confined to one institution or one country.  Contagion and fear quickly grew these events to be global catastrophes.

As I read, I’m reminded that if enough investors think the stock market will go down, the stock market goes down, more succinctly referred to as a “self-fulfilling prophesy”.

Of course, self-fulling prophesies don’t just exist in the markets, the lesson for ourselves is neatly summed up by Henry Ford, “Whether you think you can, or you think you can’t–you’re right.”

Featured Image Credit: Nick Chong via unsplash.com