Want to play stock not just smart! Isaac Newton is the proof of that.
We all acknowledge that the great physicist Isaac Newton is one of the smartest people in human history. However, despite being the father of numerous well-known laws that hurt brain lovers of physics until this point, Newton had to suffer when he realized that smart people don't mean knowing their heads. smart.
Newton - the familiar face of the scientific world.
In the commentary and supplement to Benjamin Graham's classic book: "The Intelligent Investor," editor Jason Zweig from Wall Street magazine talked about an anecdote of Newton when he invested in South Company. Sea.
"In the spring of 1720, Sir Isaac Newton invested in the South Sea, which was now a stock company with the highest value in the UK. But after everything went out of control, the great physicist was must mutter that he "can calculate the movement of the body, but does not count the madness of man".
People are really unpredictable.
"Newton sold the stock of South Sea, with a 100% return, worth a total of 7000 euros. But after that, following the wave of the market, he returned with a much greater investment, and then must swallow bitterly when losses of 20,000 euros (worth more than $ 3 million as of 2002-2003) ".
For the rest of his life, he even forbade anyone to mention the word " South Sea" in front of him.
The chart of the development of the South Sea at that time.
The collapse of the South Sea has even been saved in history books, with the name "South Sea bubble " (bubble: the term economic, only the phenomenon of property in the market is "blown" up to To a point when no one can buy anymore, bubbles burst and all collapsed.
You see, Newton was not at all a less intelligent person. He invented the differential and introduced the concept of 3 laws of motion. But through this, we can see that he is not an intelligent investor, having let his emotions interfere with his ultimate wisdom, and of course is crushed by the chaos of the market.
Newton can calculate the movement of the body, but does not calculate the madness of humans.
Or maybe summarized as Graham: "In the end, the biggest problem and also the biggest enemy of an investor is himself."