Sheep are herd animals and herd animals follow the leader. Lemmings will follow the leader right off a cliff! Many auction players behave like sheep and lemmings.
Sheep like to play it safe. They don't come up with ideas of their own. They just follow someone else's lead, whether it be the lead of a rich player on the server, some blog author's lead or even just following to the letter some guide full of old, outdated ideas and information. Sheep come in two types, the ones that follow the lead of other players (rich ones mostly) on the server and the ones that dive right into whatever the latest post on their favorite blog says will make them "lots of gold" without knowing a thing about their server's specifics in that market. They can't understand why it never seems as profitable as promised for them. Tip: it doesn't work as well because a) your server isn't the blogger's server, conditions may be very different and b) whenever a popular blog posts about something a whole lot of new people dive into it headfirst.
It might take a while but sheep will usually notice (eventually!) if they're losing gold and will leave unprofitable or low profit markets. Lemmings on the other hand don't even seem to realize when they're losing a lot of gold. They'll just keep on going right over the cliff. You can take advantage of lemmings simply by posting under your cost.They'll keep undercutting and you can buy them out.
Moral of the story
Sheep will continue bleating the "buy low, sell high" mantra, droning on about how "1c undercuts keep prices high" while ridiculing more advanced strategies and talking about hitting the gold cap (years behind) as if that proves their methods are superior. They don't even realize market leaders who don't follow the herd have capped entire accounts in less time than they needed to cap just once.
If after playing the auction for a while you still can't spot the sheep and lemmings then you probably are one. Stop following the herd, lead instead of following and make more gold!