The chapter discusses the influence of social dynamics on stock prices and investment behavior. It argues that investing is a social activity, where investors spend a significant portion of their leisure time discussing investments, reading about them, or gossiping about others' successes or failures. Social movements and fashions, which are prevalent in various aspects of life, can also influence investment attitudes and behaviors. The chapter critiques the efficient markets hypothesis, which posits that stock prices are determined by rational expectations and are highly predictable, suggesting that this hypothesis overlooks the role of social psychology. It proposes an alternative model that incorporates the influence of social factors, such as the behavior of "smart-money investors" and "ordinary investors," and explores the implications of these factors on stock prices. The chapter also examines historical data to support its arguments and discusses the limitations of the efficient markets hypothesis in explaining the volatility of stock prices.The chapter discusses the influence of social dynamics on stock prices and investment behavior. It argues that investing is a social activity, where investors spend a significant portion of their leisure time discussing investments, reading about them, or gossiping about others' successes or failures. Social movements and fashions, which are prevalent in various aspects of life, can also influence investment attitudes and behaviors. The chapter critiques the efficient markets hypothesis, which posits that stock prices are determined by rational expectations and are highly predictable, suggesting that this hypothesis overlooks the role of social psychology. It proposes an alternative model that incorporates the influence of social factors, such as the behavior of "smart-money investors" and "ordinary investors," and explores the implications of these factors on stock prices. The chapter also examines historical data to support its arguments and discusses the limitations of the efficient markets hypothesis in explaining the volatility of stock prices.