In 1720, Newton owned shares worth £7000 in South Sea Company, the most sought-after stock in England.
He sold these shares for £14,000 and made a profit of 100%.
But the shares of the company kept rising, luring Newton to enter the market again.
So, a few months later Newton bought a good number of shares again, however, at a much higher price.
And then the price of the shares tanked, causing Newton a loss of £20,000The figure has been contested with some saying it was £10,000..
He is claimed to have said ‘[he could] calculate the motions of the heavenly bodies, but not the madness of people’.
For the rest of his life (died in 1727), he forbade anyone to speak the words “South Sea” in his presence.
“[…]high IQ and higher education are not enough to make an investor intelligent. [To be an intelligent investor] means being patient, disciplined, and eager to learn. [It] is a trait more of the character than of the brain.” – Benjamin Graham (The Intelligent Investor).
Beautiful story
Thank you, really glad you liked it 🙂