OMG, I must be one sick puppy. I've reflected on this very thing while driving up and down 270 (near D.C.) every day for the last 8 years.
I made some observations of traffic patterns that I also believe are analogous to the markets.
1) People seem to blindly cut across the road for the so-called "fast lane" regardless of volume. By strategically staying in the right lane in the right areas, I end up way ahead of the fast-laners.
2) There's a stretch of 270 where the road narrows from 3 lanes to 2 (the right lane disappears). The herd is either already in the "fast lane" or moving left to bail from the disappearing lane 1 mile in advance. I stubbornly stay in the right lane all the way to where it ends with few if any cars in front of me. I end up in front of 90% of the herd this way and lop 5 minutes off my commute. (Yes, people think I'm a dick doing this. I call it "traffic arbitrage".)
3) Every year when the new school year starts, 270 and its feeders become literally gridlocked for about a month. During this period I have several back ways I take to work and completely avoid the gridlock. When this period is over, I return to 270 and the traffic is gone. I have no explanation for what causes this, but nonetheless I observed it and anticipate it every year to my advantage.
Conclusion:
The herd mentality on the highway can be observed every day. It's unwavering and unthinking. There are strategies that can be employed to exploit the herd mentality to my advantage.
All I need to do is apply observation skills to the market and find similar herd movements to exploit to make money.
