“Investors Have Been Making the Same Mistake for 300 Years” (The Atlantic) is an interesting article by Thomas Levenson, teacher of science writing at MIT.
Already [in 1720] a wealthy man, Newton was usually a cautious investor. As the year began, much of his money was tucked away in various kinds of government bonds—reliable, uneventful investments that delivered a regular stream of income. He did own shares in a few of the larger companies on the exchange, including South Sea, but he had never been a rapid or eager market trader.
That had changed in the past few months, though, as he bought and sold into the rising market seemingly in the hopes of turning a comfortable fortune into an enormous one. By August, he’d unloaded most of his bonds, converting them and other assets into South Sea shares. Now he contemplated selling the rest of his bonds to buy still more shares.
He did sell nearly all of them. It was a disastrous choice. Within three weeks, the market turned. By Christmas, it had utterly collapsed. Newton’s losses reached millions of dollars in 21st-century money.
Even someone smart enough to steal credit for being the first to invent calculus was not smart enough to resist the Vegas-style appeal of the stock market.
I recommend this article, a rare break in the continuous stream of Trump-hatred from the Atlantic (owned by someone smart enough to have sex with a rich guy, thus illustrating a much more reliable path to wealth than trying to beat the S&P 500).