The Economist looks at herd investing in the latest issue. Bottom line: it’s still happening and the herd still ain’t doing so well. Buried at the end of the piece is a joke from investor Warren Buffett about herd behavior.
Warren Buffett retells the story of the dead oil prospector who gets stopped at the pearly gates and is told by St Peter that Heaven’s allocation of miners is full up. The speculator leans through the gates and yells “Hey, boys! Oil discovered in Hell.” A stampede of men with picks and shovels duly streams out of Heaven and an impressed St Peter waves the speculator through. “No thanks,” says the sage. “I’m going to check out that Hell rumour. Maybe there is some truth in it after all.”