Today is Labor Day and the markets are closed, which presents us with an opportunity to reflect on the seemingly unstoppable momentum of the stock market.

Broadly defined, a bull market is one that rises over time without falling more than 20% from its peak during the period. Last week, we officially entered the longest bull market in history.

That’s why you should be nervous. When easy money is around, greed drives investors to take greater risks than they otherwise would. How to spot and avoid the perils of the herd mentality is the theme of today’s holiday column.

I know it has become a cliché to quote Warren Buffett, but hey, the guy is worth $85.8 billion dollars, so he must know a thing or two. Buffett once said:

“You need to divorce your mind from the crowd. The herd mentality causes all these IQ’s to become paralyzed. I don’t think investors are now acting more intelligently, despite the intelligence. Smart doesn’t always equal rational. To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible.”

Buffett’s sentiment reminds me of an interview I conducted a few years ago with Guy Kawasaki, famed alumnus of Apple (NSDQ: AAPL).

At the time, I was the editor of a technology magazine. I sat down with Kawasaki at the New Media Expo in Los Angeles, a trade show devoted to bloggers, podcasters and web designers. If you’ve never been to one of these expos, they’re a cross between a Star Trek convention and a punk rock concert.

Kawasaki is a Silicon Valley celebrity. More like a god, actually. He’s a marketing specialist, author and venture capitalist. While working at Apple in the 1980s, Kawasaki spearheaded the marketing of the Macintosh computer line. Among the technology cognoscenti, Kawasaki is a big deal. Since my interview with him, we’ve stayed in touch.

Kawasaki told me: “Defy the crowd. The crowd isn’t always wise. It can also lead you down a path of silliness, sub-optimal choices, and downright destruction.”

Indeed, contrarianism is a guiding principle of Mind Over Markets. Despite the increasing prevalence of algorithmic trading, markets are still governed by human beings, who in turn are driven by fear, greed and other emotions that cloud judgment. If there’s a common thread to my column, it’s to buck the conventional wisdom.

Nowhere is the conventional wisdom more prevalent than on the financial TV shows.

Medium cool…

As a famous Canadian thinker once said: “The medium is the message.” No, not William Shatner — I’m referring to Marshall McLuhan.

The late McLuhan was a professor, philosopher, and public intellectual. He remains a giant in the field of media theory. (Perhaps you remember his hilarious cameo appearance in Woody Allen’s 1977 movie Annie Hall.)

McLuhan argued that image-based media, e.g. television, is passive and emotional in nature — hence, he referred to TV as a “cool medium.” It bypasses linear, analytical logic and goes right to your subjective emotions. That’s why presidential elections are so heavily influenced by 30-second attack ads on TV. It’s not so much the content as the nature of the medium itself that matters.

You must recognize the simplistic prism through which television news looks at stories. Political coverage emphasizes personalities and the horse race, at the expense of in-depth public policy analysis.

Business coverage emphasizes easily understood consumer stories and lionizing portraits of CEOs. Coverage is designed to appeal to the lowest common denominator, to boost ratings.

How bad is the advice on the cable business gabfests?

Consider the Great Financial Crisis of 2008. As investment bank Bear Stearns was melting down in March of that year, I distinctly remember financial TV celebrities insisting (shouting, actually) that the investment bank was “fine” and investors would be fools to take out their money.

We all know how that turned out. JPMorgan Chase (NYSE: JPM) eventually bought the failing Bear Stearns for $10 per share, far below its pre-crisis 52-week high of $133.20 per share. Bear Stearns’ collapse was a prelude to the global financial catastrophe and concomitant recession.

Learn to spot the herd mentality. Be suspicious of conventional wisdom; it’s almost always wrong.

Generally speaking, if you consistently buy during times of unreasoning fear, and sell during times of euphoric greed, you’ll do well.

Be wary of this bull market. But don’t fight it. The current bull market climbed a 10-year wall of worry and it made chumps out of the perpetual bears (see chart, compiled with data from FactSet):

But instead of following the dubious forecasts of pundits, you should instead keep a careful eye on the hard economic data.

In the holiday shortened week ahead, these scheduled reports could wield market-moving influence:

Tuesday: Markit manufacturing PMI, ISM manufacturing index, construction spending, motor vehicle sales. Wednesday: trade deficit. Thursday: ADP employment, weekly jobless claims, productivity, unit labor costs, Markit services PMI final, ISM non-manufacturing index, factory orders. Friday: non-farm payrolls, unemployment rate, average hourly earnings.

On this Labor Day, enjoy time off with your family and friends. Devoting attention to your loved ones is an investment that pays the best dividends of all.

And instead of watching the bloviators on CNBC, you’re better off watching baseball on ESPN. At least baseball relaxes your mind.

Send questions or feedback to: mailbag@investingdaily.com

John Persinos is the managing editor of Investing Daily. Full disclosure: Persinos is a life-long fan of the Boston Red Sox and consistently reflects a bias toward the team.