Crazy Gold

Some well known European fund manager and financial advisor suggested that gold would jump from $550 an ounce to $3,000 in a few years and indeed it broke through the $550 celling today and moved about 2% higher on the news.  Wow!, maybe.

But it makes me think of the true "herd mentality", to which I have become dependent - in some fashion or another.  Every day I see some IR crew crow their "next great pick" and its usually followed by a spike in price and volume.  I often wonder how they achieved the first pick, because the second, third and the last are all driven by the herd - and not the knowledge or foresight of the picker.  The very fact that they have a following is what makes them successful "pickers".  It is the following that causes the success.  To a certain point, they could say that peanut butter would be in short supply tomorrow and indeed it would as their following would buy cases of it to insure they could sell it to those in need when the price was right.  Cart/Horse theory.

Given that, I wonder how often any of these soothsayers are wrong.  And why?  Is there a point when the herd says, "Hey Buddy!  You're going the wrong way."?