Topic: How To Invest

What is Pat’s commentary for the week of November 14, 2017

Article Excerpt

Dear Inner Circle member, Sir Isaac Newton, formulator of the laws of motion and gravity, and one of the fathers of modern science, was a first-class chump as an investor, according to long-time investor lore. The story goes that Newton invested all his money in the South Sea bubble and went broke as a result. The truth is more complicated, however. A recently published academic paper by Andrew Odlyzko, professor of Mathematics at the University of Minnesota and a student of stock-market manias, shows that Newton was a successful investor, focusing on stocks and government bonds for much of his career. Toward the end of his life, however, he turned from a conservative investor into a plunger who put virtually all his capital in a single speculative stock, along with options to buy additional shares. The stock was the fabled South Sea Co. It was formed in 1711 to restructure Britain’s national debt, and was granted a monopoly on British trade with South…

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