Sir Isaac Newton was a giant of science and, for many years, Master of the Royal Mint. But neither mathematical brilliance nor financial experience saved him from investment disaster.
A wealthy man by contemporary standards, Newton had by 1720 accumulated £19,000 worth of UK government bonds, and 10,000 shares in an enterprise called the South Sea Company, which had been granted a monopoly on British trade with South America, including in slaves.
War with Spain had long stymied the company’s fortunes, but that did not prevent its stock from soaring. Acting perhaps with the wisdom of his years, a 67-year-old Newton in the spring of 1720 sold his South Sea stock for a tidy profit of £20,000.
But then the madness gripped him. As South Sea shares just kept on rising, Newton reversed course and ploughed his proceeds back in. He doubled down, converting his government bonds into even more South Sea Company stock.