History repeats itself remarkably. In the United States, the 2008 financial crisis caused many to lose more than half their stock investments. Panic-stricken, people fled the stock market, and many missed out on the 2009 surge. Greed and fear are highly contagious, and herd mentality is the root cause. Here are a few lessons:

Firstly, you can’t predict the future. Because you can’t predict, you can’t speculate. Since you can’t speculate, you can only focus on fundamentals. Statistics show that economists’ predictions are only correct about 48% of the time. If you flip a coin, your chance of guessing right is 50%. If these brilliant minds predict this, then you can imagine what the average person like you and me will do. So, don’t blindly follow these predictions. Focus on fundamentals, and take what you get. So what are fundamentals? For example, the 2008 financial crisis caused the US stock market to lose approximately 50%. A big stock market decline is always followed by a big rise—this is fundamental wisdom. This means you have to stay in the market to enjoy the subsequent surge. However, many people didn’t. They exited the market at its lowest point, missing out on the 2009 surge. When the S&P reached its pre-Lehman Brothers level, those who missed out were deeply regretful.

Secondly, you must have independent thinking . The key reason so many people have suffered losses in the US stock market is due to the influence of the public and the media—herd mentality. The power of the crowd is infinite because it can be simply added together : one person can’t push a boulder to the top of a pyramid, but a group can. The same isn’t true of the wisdom of the crowd, because wisdom can’t be simply added together . If the mathematical abilities of every elementary school student were combined, the Goldbach conjecture would have been solved long ago; the wisdom of every young piano player in the hallway would have revived Mozart. The wisdom of the crowd is not only extremely limited but often distorted by the herd mentality, making it extremely dangerous. Sometimes, democracy is the worst kind of system, meaning that decisions are made based on the wisdom of the crowd. Everyone knows that economic trends can’t be predicted by a show of hands, but in real life, the loudest opinion often prevails. How is that any different from a show of hands? As an individual, you must be discerning. This ability to think independently is crucial, which is why it plays such a crucial role in the American education system. This is what a leader is, and why every nation needs a leader.

Thirdly, you must have the ability to act independently. What you do or don’t do shouldn’t depend on what others do or don’t do . This is actually an extension of independent thinking. Without action, thinking alone solves no problem. In life, too many people rely on what others do or don’t do, from childhood, “Other kids are playing, why can’t I?” to school, “Other people are skipping classes, why can’t I?” to adulthood, “Other people aren’t supporting the elderly or helping relatives and friends, so why should I?” If someone asks you why you should eat if others don’t, you’d definitely call them crazy. You’re hungry, so of course you have to eat. That’s right. Whether you eat or not doesn’t depend on whether others eat or not. You have your own standards: whether you’re hungry or not. Your reference point is yourself, that is, you eat because you believe eating is the right thing to do. So why not extend this simple principle? Outstanding people are outstanding because they use themselves as their reference point, using doing the right thing as their reference point. Why can’t we use the masses as a reference point? Because the masses are the masses because they represent the average. Using them as a reference point, you can only reach average at best.

Throughout history, many large-scale tragedies have been caused by herd behavior. From the stock market crash during the Great Depression to Hitler’s genocide to the national madness of the Cultural Revolution, all were caused by the masses’ lack of independent thinking. If you want to be a leader, you must cultivate the ability to think and act independently. Following the crowd, whether in your career or personal life, won’t get you far.