Human nature tends to swing between extremes of optimism and pessimism. Periodically, this reflects in the markets, and massive booms are followed by equally massive busts. Human nature does not change, and so we can be certain that they will continue to occur in the future. But are these phenomena random and unpredictable, or do they exhibit certain characteristics? If they do, can we study these characteristics and learn to identify them as they are unfolding? This will enable us not only to avoid disaster, but even to profit from them. We are told to ?know thine enemy?, and this knowledge will overcome fear and turn it into opportunity.