In finance and trading, it is crucial to understand the dynamics of demand and supply. When many investors chase after the same asset, it tends to drive its price up, often leading to an inflated valuation. This phenomenon is common across various markets, whether it involves stocks, bonds, or opportunities in employment.
Michael Lewis, in his book "Liar's Poker," highlights this fundamental concept, emphasizing that the rush towards a single commodity creates inefficiencies and overvaluation. Recognizing this behavior can be essential for traders to avoid the pitfalls of market hype and make more informed decisions.