It sounds obscure at best. In fact it is an attempt to explain why people act the way they do when it comes to big time gambling on the stock market. It may well apply to horse racing too.
Behavioural Finance ex Wiki
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Three themes predominate in behavioral finance and economics:[11]
Heuristics: People often make decisions based on approximate rules of thumb, not strict logic. See also cognitive biases and bounded rationality.
Framing: The collection of anecdotes and stereotypes that make up the mental emotional filters individuals rely on to understand and respond to events.
Market inefficiencies: These include mis-pricings, non-rational decision making, and return anomalies. Richard Thaler, in particular, has described specific market anomalies from a behavioral perspective.
Barberis, Shleifer, and Vishny[12] and Daniel, Hirshleifer, and Subrahmanyam (1998)[13] built models based on extrapolation (seeing patterns in random sequences) and overconfidence to explain security market under- and overreactions, though their source continues to be debated. These models assume that errors or biases are positively correlated across agents so that they do not cancel out in aggregate. This would be the case if a large fraction of agents look at the same signal (such as the advice of an analyst) or have a common bias.
More generally, cognitive biases may also have strong anomalous effects in the aggregate if there is social contagion of ideas and emotions (causing collective euphoria or fear) leading to phenomena such as herding and groupthink. Behavioral finance and economics rests as much on social psychology within large groups as on individual psychology. In some behavioral models, a small deviant group can have substantial market-wide effects (e.g. Fehr and Schmidt, 1999).
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The bit about group think is right. Millions of punters in Christendom have gambled on house prices going up for the foreseeable future. Millions have come unstuck. In fact major borrowers got stupid, giving huge sums to people who were never going to be able to pay it back. Auf wiedersehen Lehman et al - Financial Crisis 2008 for more and better details.