An investor believes that his
acquaintances, relatives, friends, colleagues, neighbours etc may have better information than him, and that leads him to follow them.
Such choices may be justified by short-term performance, but often lead to bubbles and crashes in the long run.
Small investors keep watching other participants for confirmation, and then end up entering when the markets are over heated and poised for correction.
Kaustubh Deole
Artharthi 