One of the most common clichés in the world of investing:

“Buy when everyone is selling, sell when everyone is buying.”

No one really knows who said it first. But like most catchy phrases, it’s often passed from one trader to another without anyone truly understanding what it means.
It sounds like some great secret of the market — but is it actually true?

What Is Herd Mentality in the Stock Market?

Herd mentality refers to how most investors behave irrationally — driven by fear during market downturns and greed during uptrends.
People tend to panic-sell during bear markets and panic-buy in euphoric markets, afraid of missing out.
Even when a stock is clearly overpriced, they hesitate to sell — until the music stops and there are no chairs left to sit on.

But here’s the real question:

Is going against the herd always the right move?

How Herd Mentality Works

It’s simple:
Instead of thinking independently, people make decisions based on what the majority is doing.

• When the market drops 10–20%, people panic and sell.
• When the market rallies 10–20%, people rush in out of FOMO (Fear of Missing Out).

This cycle has repeated throughout market history.
Ironically, markets move sideways about 80% of the time — but herd behavior kicks in hardest during extremes.

So… Should You Really Buy When Everyone’s Selling?

The truth is:

Sometimes the herd is wrong.
(Like during market bubbles — selling while everyone else is buying can save you… if it really is a bubble.)

But also:

Sometimes the herd is right.
(In a real bear market, if everyone’s selling, maybe there’s a good reason.)

If you sell just because everyone else is buying, you could miss out on much bigger gains.
If you buy just because everyone is selling, you could catch a falling knife.

What matters isn’t why the market is moving — it’s whether or not you’re aligned with the trend.
Blindly going against the crowd can hurt you just as much as blindly following it.

Don’t Follow the Crowd Blindly — But Don’t Oppose It Blindly Either

The stock market isn’t black or white. It’s shades of grey.
Sometimes the crowd is right. Sometimes they’re wrong.

The key is to make independent decisions.
Use herd behavior as one of many signals — not your entire strategy.

“Buy when everyone’s selling and sell when everyone’s buying”
is not a complete system — it’s just a saying.

Final Word:

Do your own analysis.
Control your emotions.
Decide whether to follow the crowd based on logic, not impulse.

Sometimes joining the herd makes sense.
Other times, standing alone is smarter.
The skill lies in knowing when to do which.