Very cool post. I've studied this subject a bit too, mostly because of my involvement in the precious metals sector. Trying to figure out why people do things regardless of what the fundamentals tell us is aggravating, until you learn that it's not about the fundamentals. It's about the mob.

Mob mentality is a powerful thing. We don't realize it with day to day things unless we have a tendency toward non-conformity and/or being a contrarian. Few are those who really possess the fortitude though.

When the mob is doing something more momentous, the pull to conform can be almost palpable. People report doing things they claim to be totally contrary to their character due to being caught up in the mob. This can include anything from acts of immorality to drug use to sex to rioting to whatever.

It's also what causes market bubbles. The tops are completely irrational, based on momentum indicative of a mob. The same goes for crashes. A good market contrarian can get very wealthy being able to measure the mob. This is what Elliott Wave Theory proposes to accomplish, perceiving waves of the mob as it builds momentum, before the crowd realizes they're going over the cliff.