It makes it hard to make successful, opinion based trades.
You enter a trade on the basis that everyone is wrong, accepting scope for the crowd to get it even more wrong before waking up to reality. When the crowd does eventually realise the error of it’s ways, the price turns in your favour. However, it is extremely difficult to hold on to the trade and enjoy ‘being right’, because the crowd is always wrong, and if it is now moving in your favour, then you are also wrong, an equal fool.
This unhealthy skepticism leads to early culling of winners and ensures that one’s portfolio spend most of it’s time holding on to losing positions.