By John Werner
Publication Date: 2025-11-17 16:17:00
classic architectural details of a bank building
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Don’t look now, but the financial industry just found another reason to be wary of AI.
Remember the old wisdom that experienced traders would impart in aphorisms like “Go up and down the stairs” and “Buy low, sell high”? Basically, the idea is that a smart individual can make huge potential profits by betting against the herd. This is often true – the market value depends on the general mood of investors, so you can get rich by differentiating yourself from the norm. But on a broader level, different markets work better. If there is 100% consensus on one side of a bet, then there is no bet.
So when experts talk about “market crowding,” smart people pay attention.
What is Market Crowding? It’s very simple: Crowd in the market This happens when all or almost all market participants take the same position. And why should they do that? This might be hard to imagine before AI. Investors would crowd into…
