In markets, contagious exuberance can take hold from time to time, leading to investment frenzies followed by market crashes.

Most people who are interested in markets and investing find this type of collective delusion fascinating.

It doesn't just show up in markets, however.

Collective delusions are everywhere around us. According to Pew

research, over time more and more Americans believe that crime is a growing problem. They

believe that this is more the case nationally than locally, but statistics show that crime

in the United States and especially violent crime has plummeted since the 1990s.

There are all sorts of statistics that show that quality of life has improved massively over time.

But for some reason, people don't want to believe that.

Twenty years ago, I came across a book by Stephen Moore and Julian Simon called

It's Getting Better All the Time, which examined the 100 Greatest Trends of the Last

Hundred Years, which showed that people were taller, healthier, poverty rates were lower,

household incomes had not only risen, but household sizes had fallen, meaning that

there was more money per family member than there had ever been before. There were many

eye-opening charts in the book, which showed that despite all the negative news that we read,

that the overall quality of life was trending upwards globally.

The authors showed that a greater percentage of the global population had access to education,

nutrition and clean water than ever before.

Statistics like global child mortality, a statistic that pulls together many of the improvements that

we've experienced in terms of medicine, hygiene, access to food and shelter, safety

from wars and much more, had improved massively over time.

In 1800, 44% of people died before their fifth birthday, and today that number has fallen

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