When the whole country becomes pervaded with an epidemic of bullishness the action of speculators is always directed by sentiment rather than judgment; and a market that is swept along by excited emotions is always dangerous,--dangerous to go short of and dangerous to be long of. Hysterical “bulls” care nothing whatever about the earnings or dividend returns on a stock; the only note to which they attune their actions is the optimistic slogan, “It’s going up!” and the higher it goes the more they buy, and the more their ranks are swelled by new recruits. A herd of stampeded cattle (cows no less than bulls) will rush blindly into a river, or butt their brains out against stone walls, trees or other obstructions; they also stampede every critter that happens along their path; and anyone who has ever witnessed a panic in a theater or auditorium, or in the stock market, need not be told that under such circumstances men are but little saner than cattle.
And speaking of sentiment, it is remarkable to what extent the combined business and financial structures of the country are swayed to and fro by this giant motive power. Like the biblical wind that bloweth where it listeth, and man heareth the sound thereof but knoweth not whence it cometh or whither it goeth, sentiment springs up from comparatively trifling or unknown sources and after playing its havoc, vanishes as suddenly and mysteriously as it came. In a bear market a train wreck, or the death of some financier, or an earthquake in Europe, will put the market off to the aggregate extent of hundreds of millions; whereas one of the greatest bull markets in history found its chief impetus in the most universally devastating war the world has ever known.