Not that knowledgeable abour finance, sociology or economics, but, since I did stay at a Holyday-Inn last night, I'll chime in.
People invest in the stock market in hopes of obtaining a financial gain. If you expect certain company's shares to go up (because it just came out with a revolutionary product, earnings are expected to surpass market expectations...), it will make sense for you to buy them. If many people follow this trend (based on your same reasoning, or as an example of mob behavior), the sudden demand should allow the share price to appreciate in the short term (the interaction of supply and demand for a certain good being a key determinant of its price).
However, in the long term, the company's fundamentals--leverage, competitive position in the market, quality of management...--as well as the industry's and overall economy's performance, should be the key determinants of a stock's market valuation--rather than people's short term expectations.
Behavior-wise, I think you could analogize this to a movie opening. If early buzz is favorable, people will flock the theaters during opening weekend (short term). Afterwards, when information spreads more amply and educated decisions are more easily forthcoming, if everyone realizes that the underlaying product--be it a movie or a company--is not as good as initially expected, box office recipes--or stock prices--will be driven down, i.e., short term, a certain behavior can be possitively reinforced by social dynamics and risk-reward perceptions mostly due to the abscence of quality information (leading to a self-fulfilling prophecy) but, in the long term, people will be armed with better information, allowing for individual decisions--rather than "mob-induced"-- to predominate over collective-based ones.
Hope that made any sense...