""We are the apes who tell stories," writes William Bernstein. "And no matter how misleading the narrative, if it is compelling enough it will nearly always trump the facts." As Bernstein shows in his eloquent and persuasive new book, The Delusions of Crowds, throughout human history, compelling stories have catalyzed the spread of contagious narratives through susceptible groups-with enormous, often disastrous consequences. Inspired by Charles Mackay's...

Collectively, people think and act in ways very different from how they think and act as individuals. Author Bonner has long been a maverick observer of the financial and political world, sharpening his sardonic wit, in particular, on the vagaries of the investing public. Market booms and busts, tulip manias and dotcom bubbles, venture capitalists and vulture funds, he lets you know, are best explained not by dry statistics and obscure theories but...