Full-service investment firms and financial advisors gain when investors believe that their advice allows investors to outperform the market. Mutual funds benefit when investors believe that they will outperform the market. The investment industry has an interest in promoting certain strategies, even when evidence indicates that these strategies have no basis in reality. The end result is market volatility and inefficiency. In Frank's model, the market will never be stable or logical, but will continually move in a series of thematic lurches.
Investors coalesce into herds that believe a specific market strategy.
The strategy meme, although it is only an idea present in the brains of a number of investors, can be considered as a single anthropomorphic entity. The simplest examples are bulls and bears but more sophisticated specimens abound. There should be profit to be gained by understanding what may be the dominant meme in the market for the next cycle. This virus is purported to erase the recipient's hard drive. 2 Dawkins, Richard, The Selfish Gene , Oxford University Press, Inc., 1976.