Coffee Can Investing: the low risk road to stupendous wealth

by Saurabh Mukherjea

The Intelligent Investor, Jason Zweig included an anecdote about Newton’s adventurous investing in the South Sea Company: Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people’. Newton dumped his South Sea shares, pocketing a 100 per cent profit totalling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price—and lost £20,000 (or more than $3 million in [2002–03’s] money). For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.