Not so well, to view the case of Sir Isaac Newton. The great scientist and verifiable genius (his intelligence is said to have been one of the highest in history) was also supposedly something of a financial whiz, serving as England's Master of the Mint during his lifetime. In the spring of 1720, while speculative frenzy raged over the prospects of the South Sea Company, Newton decided to sell shares he had purchased and thereby gained a 100 percent profit. He had seemingly realized that things had gotten out of hand. At the time, he stated, “I can calculate the motions of the heavenly bodies, but not the madness of people.” And so, on April 20, 1720, he got out of his position in South Sea at a handsome profit of £17,000.
But then something happened. Weeks later, as the frenzy continued and shares kept being bid up during the spring and summer, Newton went back into the market and bought further shares-this time for a larger amount than he had spent before. But this time his foray came at what proved to be the top of the market. When the bubble burst on the stock of the South Sea Company, Newton found himself losing £120,000.
It is said that the experience so unnerved him that for the rest of his life Newton could not bear to hear the words South Sea.
