Isaac Newton's Nightmare

Exhibit 4 also tells you a little bit about Isaac Newton, which may be true and, in any case, is a great story. Newton had the great good luck to get into the South Sea Bubble early. He made a really decent investment and a very quick killing, which mattered to him. It was enough to count. He then got out, and suffered the most painful experience that can happen in investing: he watched all of his friends getting disgustingly rich. He lost his cool and got back in, but to make up for lost time, he got back in with a whole lot more (some of it borrowed), nicely caught the decline, and was totally wiped out. And he is reported to have said something like, "I can calculate the movement of heavenly bodies but not the madness of men."

David Fuller's view The importance of this story is that there are very few investors who have not lived through their own version of the South Sea Bubble, probably more than once, although they may not have summarised the experience as elegantly or dramatically as Newton.

It is every investor's story of spectacular profit and loss. And from the early days when I barely knew Isaac Newton from Fig Newton, it has been a personalised centrepiece theme for the discussion of trading follies and required money control disciplines at The Chart Seminar, now conducted by Eoin Treacy who was speaking in Singapore earlier today.